Merriman Market Analyst

Review and Preview

 There was a very important lesson to be learnt last week for Financial Astrologers. 

Saturn turned stationary direct on Friday and equity markets did not fall into that period as would be expected via the study of astrology alone. After all, the basic principles of Saturn are to depress, contain, or limit. For sure, there were sell-offs in equities on both Thursday and Friday. In fact, the low of the week in stock indices like the Dow Jones Industrial Average and Japan’s Nikkei index happened on Thursday, just one day before the Saturn turned direct. But on both days, these indices soared to new cycle highs, closing at their highest levels since the first week in January. A look at a price chart will reveal that these lows were not very noteworthy. They didn’t even touch the 25-day moving average. What is noteworthy when you look at a chart is the fact that these markets are making highs – not lows – as Saturn turns directions. Why is that?

 This is where the study of cycles is so valuable. We know that the first phase of every cycle is usually very bullish, and the last phase is usually bearish. From the integration of cycle studies with financial astrology, we also know that when a market is just beginning its new cycle, geocosmic signatures for reversals may not seem to work well for declines. If the early stage of cycle is very bullish, and if the principle of Saturn is to depress, then what happens under Saturn signatures when a market is in the early phase of new cycle? It may not result in a substantial decline as it would in the middle or later phases of that cycle. In fact, it may only pause the advance, which is exactly what happened last week as we approached Saturn turning stationary. This type of behavior supports our view that stocks around the world – and especially in the United States - completed their long-term 4-year cycle bottom on January 22 (DJIA) and March 17 (S&P and NASDAQ Composite). This is the early stage of a new 4-year cycle. Thus the momentum is to go upwards in price, based on cycles’ theory as outlined in our books, despite the depressive qualities of geocosmic signatures that may be in effect during this stage.

 Now let’s look at others market in comparison. Let’s look at the Euro currency and Crude Oil. Both made all-time highs on April 22, which was exactly on the critical reversal date (midpoint) of the April 20-24 cluster of geocosmic signatures as outlined in this column, and discussed at length in our subscription reports. Markets rallying into that date were expected to top out, and many did. They were then expected to decline into the Saturn station of May 2, and many did. The reason the decline has been so sharp in the case of the Euro currency and Crude Oil is because both are in the later stages of their longer-term cycles. In the case of the Euro, a 26-month cycle trough is due, ideally by the end of May. It is very late in that cycle. In the case of Crude Oil, an 18-month cycle low is due May-September 2008. It is thus late in that cycle too. The Euro topped out just above 1.6000 exactly on April 22. On Friday, May 2, it was at its lowest level in two months, testing 1.5400. Crude Oil also topped out on April 22 at 119.90. By Thursday, May 1, it was down to 110.30, right before the Saturn signature. Gold and Silver also came tumbling down sharply into last Thursday, May 1.

 But, as stated in last week’s report, “The only thing traders need to know about this coming week is that Saturn turns stationary direct on Friday, May 2… The most important thing to recognize about major Saturn signatures is this: any financial market that is declining into a period of one day before through one day afterwards, has a high potential of completing that decline and starting a rally.” That is indeed what happened in many financial markets, such as Crude Oil and the Euro currency against the Dollar. Now let’s see if they can rally again.

Short-Term Geocosmics

Saturn was at the forefront at the end of last week. And this week we start a geocosmic transition towards Jupiter’s influence. Whereas Saturn tends to depress and contract, Jupiter tends to expand and show gains, even excesses. Over the next 2-3 weeks, we have four major Jupiter signatures coming up: Jupiter turns stationary retrograde on Friday, May 9, followed by the trine between the Sun and Jupiter on May 12. On May 18 Venus will form a harmonious trine to Jupiter, followed by the long-term sextile between Jupiter and Uranus. As suggested before, the combination of 1) the Federal Reserve Board easing (they reduced FED funds rate again this past week), 2) the $168B stimulus package of tax rebates to American tax payers (the money is being sent out now), and 3) so much money being poured into mutual funds for retirement accounts that was just waiting for a sign to go into stocks, would generate a rally stronger than anyone expected. It’s started. Look for new all-time highs before the end of this summer, maybe even a DJIA above 15,000. It’s Jupiter’s time coming up, and Jupiter is the cosmic Santa Claus.

Longer-Term Thoughts

 Recessions, unemployment, and foreclosures. They are all the economic headline stories this year.  Let’s look at each one of these in terms of astrological studies.

 First, the possibility of a recession. In previous reports I stated that I didn’t think we would enter into a deep recession this year. Even as late as mid-March, as many economic analysts around the world were claiming the recession (if not the start of a depression) was already here, this column pointed out that the aspects between Jupiter and planets outside of its orbit were turning positive as of late January. The first signature was the trine between Jupiter and Saturn on January 21. The very next day the DJIA and many other world indices completed their 4-year cycle trough. These markets made a double bottom on March 17, while other indices fell slightly lower. Now these indices have risen at a double digit pace since then. Not only that, but the barometer of measuring recessions - the quarterly GDP (Gross Domestic Production) – had not fallen into negative territory. That number came out this week, and in spite of the many forecasts that this time it would be a negative number, it wasn’t. It was still up .6%, same as last quarter.

 Yet if you are in the building or construction field, you are in a recession. Unemployment in these sectors continues to climb. Friday’s employment report showed that another 20,000 jobs were lost last month, on top of 81,000 in March and 83,000 in February. Where have all the jobs gone? And why are they disappearing, from the point of view of astrology? This may be explained by the presence of Saturn (constriction, depression) in Virgo (work). This placement is in effect September 2007 through October 2009. It doesn’t mean unemployment climbs all during that time, but it does suggest that the height of unemployment, or the bottom of lost jobs, is realized during this time, usually around the middle. The last time this 29-year cycle unfolded, there was also a recession and unemployment rose sharply.

 But there is another factor in today’s economy that is unsettling. And that is the decline in home sales, as well as the decline in home prices. With some so many people invested primarily in their homes, and with so many homes losing equity, there are record numbers of foreclosures taking place. Even though Saturn in Virgo suggests that the unemployment numbers may peak in the next 1-2 years, there is another financial astrology signal indicating another decline in the economy could be looming ahead, correlating with another downturn in homes sales and housing values. This is the 18.73-year transit of the Moon’s North Node through Aquarius and Capricorn, which is in force December 2007 through early 2011. According to Louise McWhirter’s classic book on “Astrology and Stock Market Forecasting” this transit of the Moon’s North Node correlates to the bottom of economic and real estate cycles.

 What are these geocosmic signatures telling us? They are suggesting one more rally in stock markets around the world, as well as an uptick in economic data may be coming. But these conditions could top out in 3-9 months unless governments and individuals learn to better manage their debt. If not, this $168B stimulus package that Americans will be receiving in the next couple of weeks will be only a quick fix. In fact, this could end up worse than a quick fix, because without fiscal discipline, people will spend that and more, and the level of debt could easily increase beyond what it is today. The North Node of the Moon is moving through this critical sector of the zodiac, and the “Cardinal Climax,” involving the cardinal T-Square between Saturn, Uranus, and Pluto is fast approaching (November 2008 through 2010, with parts of it remaining in effect through 2015). There is now another chance to get one’s house in order again. Don’t let the real equity in your house (your life) be at risk, once this secondary rally in the economy ends.