Review and Preview

 The “Sagittarius Factor” of last Monday through Wednesday corresponded with huge price swings in many financial and commodity markets, most notably Treasuries, currencies, and precious metals. Gold, for instance, was trading at 882 on Wednesday, its lowest level since January. By early Friday, it was up to 967.80, an appreciation of 10% in less than 48 hours. Silver’s move was even more spectacular, as it fell to 1189 the same day, also its lowest level since January. At the close of trading on Friday, it was up to 1384, a gain of 16.4%. But if you are a currency trader, you had to be stunned by the surge in the Euro currency and Swiss Franc against the U.S. Dollar. Since its low of 1.2455 on March 4, the Euro currency soared to 1.3737 on March 19 (last Thursday). The Swiss Franc surged from a low of .8356 against the U.S. Dollar on March 12 to a high of .8980 just one week later. These are huge movements for currencies. Similar moves were noted in the longer-term Treasuries and Notes. Grains and Crude Oil also enjoyed healthy price increases last week, with Crude trading above 52.00 for the first time since November. This fits with last week’s report, which stated, “For this coming week, the most notable celestial event we take interest in is the “Sagittarius Factor” of Monday-Wednesday. It oftentimes coincides with very sharp price movements – and reversals – in many financial markets, but especially in precious metals, currencies, and Treasuries.” Yet the amplitude of these moves was even more impressive than expected, for reasons discussed below.

 Equity markets were not quite as exciting. The rallies which started from the lows of March 6-10 (as Venus turned retrograde) continued into last week. After rising 10-20% in that brief amount of time, many of these indices started pulling back as the week wore on. In the case of the Dow Jones Industrial Average, for example, the low of March 6 at 6470 stalled out last Wednesday, March 18, at 7571. That represents an impressive gain of 1100 points and 17% in just 8 trading days. But by Friday, it had given back 300 of those points. We now wait for next week to see if this will be just a “normal” corrective decline in a new bull market, or the resumption of the bear market.

Short-Term Geocosmics

We are out of the dream-like, surreal, period of Pisces. It’s officially springtime now. As discussed a few weeks ago, this new season may come in with a bang. After all, the first non-lunar aspect made as we begin spring will be the Sun square Pluto on Monday, March 23. This will also end the “translation” of the Sun to the Saturn-Uranus-Pluto developing T-square, which was in force March 8-23. Once again, this translation wasn’t as bad for stocks as was the case in 2008. In fact, equities have been mostly higher during this period. The question is: will they continue to rally? Or will they reverse sharply down now that the “translation” is ending?

The answer may be influenced by Venus retrograde, which is also in effect now. In fact, it lasts much longer, since it started March 6 and doesn’t end until April 17. It is not unusual to see a market making a multi-month high or low nearby to Venus turning retrograde, and then reverse in the opposite direction until the time its motion returns direct. If the Venus retrograde is more powerful than the Sun’s translation to the Saturn-Uranus-Pluto T-square, then the market should continue its rally for a few more weeks before taking out the low of March 6-10. If not, we may see the bear market resuming. With Pluto in the picture as the spring equinox begins, the focus is once again on debt, for Pluto rules debt, death, and taxes. The aspects that are present at the time of seasonal change tend to describe themes that are most highlighted for the whole of that season. This week is not only the start of the new season, but also a new moon, which will form the same square to Pluto. Spring is supposed to be the season of romance and love, and bright new hopes for the future. But with Pluto so prominent, it may be more like “tough love.” Such a geocosmic set up can be prone to serious power plays in which there is little mercy for the weak. This is not a time when the “weak shall inherit the earth.” What they inherit may be more debt, and more demands to pay up (like the AIG executives who received those bonuses). They are more prone to be forced into foreclosure or bankruptcy, and sudden changes of life style they didn’t plan for.

Longer-Term Thoughts

 The Venus retrograde effect was in full force last week. Not only did the stock market continue its rise from March 6, but the Central Banks did indeed announce new policies that had a direct impact on all interest-rate related markets (i.e. Treasuries and currencies). This is what generally happens during Venus retrograde - central banks make new policies or change old ones, and markets react with great volatility and large price swings. One week ago, the Swiss Central Bank lowered its key interest rate, and the Swiss Franc feel to a new three-month low against the U.S. Dollar (the Euro currency did not, for a case of intermarket bullish divergence). Then this past Wednesday, March 18, the U.S. Federal Reserve announced a plan to purchase $300 Billion in Treasuries, which forced the long-term bond rate to levels not seen in decades. The 10-year Treasury Notes dropped form 3+% to 2.53% and 30-year mortgage rates fell to 4.75%. At the same time, the value of the U.S. Dollar plummeted, as other currencies surged up against it. The Fed is printing money with a zeal seldom – if ever – seen before. In all, the Fed will stimulate the economy to the tune over $1 trillion more, on top of the White House’s massive multi-trillion spending programs already launched in the past few weeks.

Yes, they are serious about getting this economy back on strong footing. But they also risk the dark side of the forthcoming Jupiter-Neptune conjunction, which is inflation. You may remember last summer the Federal deficit was projected to be $500 billion this year. Then it was raised to $800 billion towards the end of last year, and then $1.2 trillion early this year. This week, it is now estimated to rise to $1.8 trillion. This phenomenon where the budget deficit “…will rise much greater than anyone expects” was discussed in detail in the year’s Forecast 2009 Book, along with the likely ramifications.

Jupiter and Neptune are in Aquarius, and Uranus is in Pisces, creating a very rare astrological phenomenon known as a mutual reception. It has only happened twice in the past 3000 years, the last time being 1843. With Jupiter and Neptune together (May-July 2009 is the strongest part of this aspect), the dynamics tend to be inflationary. But with Uranus involved, the risk is not a “gradual” return to inflation, but a Uranian “sudden and unexpected dramatic” return.

Is there really a risk here? Chairman Bernanke recently said there is no risk of inflation in the foreseeable future. But remember: he has the Sun-Jupiter opposition natally at 21 Sagittarius-Gemini. Transiting Uranus is hovering around 21 degrees of Pisces, in T-square to his Sun-Jupiter opposition, and all in mutable signs. This is not a signature usually related to accurate forecasting skills, or good judgment. The risk is over-estimating (or grossly under-estimating) the effect of one’s actions. That is why transiting Uranus in hard aspect to natal Jupiter is one of the classical bankruptcy aspects in astrology. It is not that one cannot make money during these times, for often one makes a lot of money. But when and how these individuals choose to spend or invest (or speculate) their money oftentimes involves a risk that is far more serious than they thought, and it results in larger losses than expected. In this case, the decision could quite easily result in a sudden increase in inflation that was not foreseen, with the next result requiring a sudden jump in interest rates that thwarts the economic recovery.

In terms of time, this all looks good right now, and maybe it will last through the summer. But sometime after August, as we come into orb of the Saturn-Pluto waning square, there may be a consequence to pay for all this money being printed, and all this debt being accrued, not to mention the shift of policy by the Fed to risk losing its independence by purchasing such a huge sum of U.S. Treasuries (i.e. U.S. debt). It is now in league with the government itself. Everybody worries about the U.S. government nationalizing the banks and private companies. Maybe the Fed is on the verge of privatizing the U.S. government.