Merriman Market Analyst

Review and Preview

 Last week was another classic example of how Financial Astrology works so well in tandem with classic technical studies and basic chart formations. On March 15, Venus made its opposition to Saturn, the first leg of its “translation phase” to the Saturn-Uranus opposition, March 15-28. As stated in last week’s column, “On the positive side, Financial Astrologers can point to the idea that Venus is at least now in Pisces, a sign in which it is exalted. They can also point to the fact that the first passage will be the opposition of Venus to Saturn, which takes place this weekend, March 15. Oftentimes when a market is falling into this aspect, it will bottom, and then stage a sudden recovery just as soon as it is over.”

The collapse of stock markets around the world the prior week spilled over into Monday, March 17. The “mini-panic” plunge represented new yearly lows in many of these stock indices, while others held smartly above their lows of January 22. This is a chart pattern known as Intermarket Bullish Divergence,” and when it happens as close to an important geocosmic signature as Venus in opposition to Saturn, it can be followed by a healthy rally.

We saw this phenomenon in effect in the Far East. The Japanese Nikkei, for example, had a free-fall all the way down to 11,691 last Monday, its lowest price since July 2005. In the next three trading days, it rallied over 800 points and closed near its weekly high. The Australian All Ordinaries also fell to a new yearly low, down to 5130 on March 17. But new yearly lows were not made in Hong Kong’s Hang Seng index, or in India’s Nifty Index. Both took out the lows of January 2008, but not the lows of last summer.

In Europe, the Intermarket Bullish Divergence signature was in even more evidence last Monday. Germany’s DAX and Switzerland’s SMI indices fell to 6167 and 6769 respectively, their lowest levels since October 2006 and October 2005 respectively. But both the Netherlands AEX and London FTSE held well above their January 22 lows. Furthermore, each of these indices appears technically poised to rally more this coming week.

The same divergence was present in the United States. Last Monday’s low in the Dow Jones Industrial Average was 11,756. This was even higher than the 11,731 low of the prior week, March 10, and well above the 11,634 low of January 22. But the NASDAQ Composite fell to 2155 last Monday, below its 2202 low of January 23, and in fact to its lowest level since September 2006.

Although the action in the stock indices of the world continued to be erratic and surprising, they were rather tame compared to that in the commodities. Gold, for instance, made a new all-time at 1017.50 on Monday, March 17. But by Thursday, just three days later, the yellow metal was already back down to 914.50. And Silver was hit even harder. After posting a new 28-year high of 2094 just the previous Friday, March 14, it collapsed over 400 points by Thursday of this past week. This was right in line with what our weekly subscription reports had forecasted – a decline of at least 300-500 points after the CCI (Commodity Channel Index) reached one of its rare overbought levels discussed therein. A similar fate awaited the Crude Oil market. After posting another new all-time of 111.80 on this critical March 17th date, black gold fell all the way down to 98.95 intraday on Thursday, just three days later. The pattern it formed on this decline contains the possibility of more to come, suggesting that perhaps the all-time high is in. This would be consistent also with our call for a 50-90% drop to begin in crude oil from an all-time high achieved by the first half of 2008, per our Forecast for 2008 publication. And finally we are seeing similar breakdowns in the grain prices, especially Soybeans, which staged three limit down days during last week’s shortened 4-day trading week. This too is consistent with our analysis given in the Forecasts form 2008 book, in which we postulated that this would be an almost ideal growing season due to the Jupiter-Saturn trine, combined with overplanting of Soybeans by farmers, thus likely to yield a huge crop this year.

Short-Term Geocosmics

 The translation of transiting Venus to the forthcoming Saturn-Uranus opposition will end on this Friday, March 28. When the Sun made this translation February 27-March 10, we speculated that stock prices around the world might fall hard, much like what happened in January. And it did. But we suspected the pattern might reverse in this current translation period, because Venus was in Pisces, where it is exalted and thus much stronger. And typical of Uranus time bands, the market has a way of doing just the opposite as what one might expect. As we ended last week, everyone on the planet seemed to think that the financial fabric of the world was about to totally unravel. I don’t ever remember the “D” word (Depression) being bandied about so much as I saw in the European financial press last week. To say that the financial community was in a panic last Monday would be an understatement. The mood was utter despair and hopelessness, sort of like one might expect with planets in Pisces, with Venus in opposition to Saturn.

 But Financial Astrology teaches us that when the investment community’s mood is bleak, and markets are declining into these types of planetary periods, it is time to buy. Once aspects to Saturn leave in a declining market, prices tend to rise immediately afterwards.

 Still, we cannot say the market has confirmed that the worst is over. More bad news probably lies ahead in the next two weeks, as Pluto will turn retrograde on April 2, and the full moon of March 21 formed a T-square with Mars and Pluto. Whether stock markets fall again to new yearly lows remains to be seen. But with Pluto being highlighted so remarkably in the next two weeks, the problems with debts, defaults, and more financial write downs by major world financial institutions, is probably not over.

Longer-Term Thoughts

 The big news in Europe last week was the hysteria about a coming financial collapse. It seems that the financial media is not just focused on a recession anymore, but a full blown depression. The European market analysts seem convinced that nothing can save the USA banking system now. No matter how much money the FRB pours into the system or how low they lower the interest rates, the future of the USA – and hence world - economy is doomed. We are in for a serious washout unlike anything we have seen since the 1930’s. Upon returning back to the states on Wednesday night, it appears that pessimism in the USA is almost as serious. But not quite.

 If we look at long-term planetary signatures and their correlation to economic history, we can make a case for both a positive and negative viewpoint. First of all, I would suggest that Jupiter in Capricorn exaggerates (Jupiter) the fear of an economic downturn (Capricorn). The Federal Reserve Board is a Capricorn entity, and transiting Jupiter in its natal Sun and Jupiter sign (of Capricorn) leads me to believe they can still pull a "rabbit out of the hat" and prevent an immediate collapse. I believe they are acting quickly and boldly in exactly the way they have to act. Sure, it may seem like it is too late, and the hysteria can create a feeding frenzy leading to a collective self-fulfilling prophecy. If enough people lose confidence, then of course the markets and economies of the world will crumble, regardless of the planetary signatures. And we saw some of that last week. But with interest rates coming down quickly and with the U.S. Government about to send out $150+ billion dollars in tax rebates, and with a lot of money now in the hands of mutual funds as a result of retirement savings accounts contributions that are now due, it won’t take much to suddenly uplift this economy and the stock market. Once the market starts to rise, these money managers will yank all that cash and buy stocks in huge quantities. And once that happens, the headlines of the major financial publications around the world will be dumbfounded, and will probably proclaim something of a miracle just happened. Why not? Uranus is in Pisces all year (symbol of miracles), and about to be sextiled by Jupiter in its first of three passages this year, on March 28. The danger may not be that market is about to collapse, but rather that it is about to launch to a new round of some serious buying by the funds who are sitting on large cash positions.

 If this happens, the financial pundits will declare the problems are behind us. But they are not. Well, they may be temporarily behind us for a few months, for these geocosmic signatures may have an effect lasting a few months, and these stimulus packages perhaps about the same, like just enough to get us close to the election. Once they wear off, the possibility is strong that these same problems will resurrect once more when Saturn begins its square with Pluto (2009-2010). How appropriate to see all this unfolding on Easter weekend, a symbolic time of death and resurrection. Enjoy the respite while it lasts (if it lasts), and try to construct your future financial strategies while you have this opportunity.