Review and Preview

 Happy New Year to everyone, and best wishes for a prosperous and healthy 2009.

Stock markets around the world were quiet, but mostly positive, in light holiday trading as we ended 2008 and began the New Year. In retrospect, 2008 will go down as the worst year in U.S. stock performance since the Great Depression. However the rally in many of the world’s indices that began on the day of the fifth and final waxing trine between Jupiter and Saturn on the recent low date of November 21, has been most impressive.

In Europe, three of the four indices we track closed the week at its highest levels since November 21. The Netherlands AEX, German DAX, and London FTSE were up as much as 17.3, 23.3% and 22.2% respectively in the past 6 weeks. Only the Swiss SMI failed to make a new monthly high on Friday. If the markets turn down from here, this would create a case of intermarket bearish divergence. But because all the markets closed the week strong, it cannot be said that such a divergence is yet present. It is only confirmed when they close in the lower third of the week’s – or a particular day’s – range.

In the Americas, the NASDAQ Composite and Dow Jones Industrial Average also closed at their highest levels since November 21. The NASDAQ reached 1636 on Friday, which is up over 26%. The DJIA recorded 9065 on Friday, up over 1600 points, and 21.6%, from the Jupiter-Saturn low 7449 low of November 21. In South America, both Brazil’s Bovespa and Argentina’s Merval Indexes rallied Friday, and are now testing their highs of December 18. If they fail to make it, and the market closes in the lower third of the week’s range, it will be a case of intermarket bearish divergence her too. But right now, there is still time to negate that developing set up.

In Asia and the Pacific Rim, some markets were noticeably very weak in comparison to other indices of the world. In Hong Kong, for instance, the Hang Seng rallied only to 15,042 on Friday, well below the 15,781 high of December 11. In India, the Nifty Index got back to 3079 on Friday, still below its 3116 high of December 12. But in both Japan and Australia, the Nikkei and All Ordinaries Indexes did indeed rally to their highest levels since the lows of late November.

Other markets also put in noteworthy performances in last week's shortened holiday period. The big story was probably in the interest rate-related sectors, particularly Treasuries. As discussed in several recent columns, Jupiter would be passing over the natal Jupiter of the Federal Reserve Board chart at 23 Capricorn on December 18, which is the period we suggested the Treasuries could top out and begin a substantial decline. From here on out, the FRB chart can look forward to series of very hard Saturn and Pluto transits over the next two years. Jupiter is accommodating (lower rates, easier monetary policy); Saturn is tightening (higher rates). It might represent the last time we see yields at this level in our lifetime. On December 17, T-Notes (and T-Bonds) put in their all-time high. The Ten Year Note soared to a record high of 130/25. On Friday, just two weeks later, T-Notes closed the week at 124/08. That is a substantial decline for this market in a brief period of time. As T-Notes declined (and interest rates began to rise), the Dollar predictably became stronger against other currencies. The Euro currency, for instance, has fallen from a high of 1.4719 exactly on December 18, to 1.3837 as of Friday. Strangely enough though (not really), Gold prices did not come down as the Dollar strengthened. Gold has made a new monthly high of 892 on December 29, up over $200 since its 680 low of late October. On Friday, Gold was still testing the 890 level, near its highest point of December 29. Silver is still up strongly from its 840 low of late October, having touched 1161 on December 17 and 1155 on Friday, January 2. That is an appreciation of 37.5% in those two months. Even Crude Oil is in on the run, as expected with Mars in Sagittarius and Capricorn. From a low of 32.40 on December 19, Crude reached as high as 46.74 on Friday, for a gain of nearly 45% in just two weeks!

Even though stock indices were relatively quiet but positive, there was plenty of tension last week as Mars entered Capricorn and formed a conjunction to Pluto. As stated in the previous column, “Mars conjunct Pluto is a potentially dangerous aspect to human lives. Mars pertains to aggression and combat, while Pluto relates to threats of safety.” This was certainly in evidence in the Middle East as Israel began an offensive against Hamas in the Gaza strip, in retaliation for their rocket attacks into Israel. Unrest in the Middle East involving Israel is a cyclical occurrence related to Mars transiting Sagittarius and Capricorn, as reported in an article I wrote several years ago for “The Mountain Astrologer” magazine (November 1995 issue, Grass Valley, CA). In that study, I pointed out how volatility in crude oil prices historically increases during this transit, and is furthermore associated with renewed military aggression involving Israel and her neighbors. It is happening again, and this time it is even more serious than usual because Pluto is involved.

Short-Term Geocosmics

 There are no major planetary aspects unfolding the first week of January. However, there are three planetary ingresses occurring, which can represent a change in investor psychology. The first ingress is Mercury moving into Aquarius on January 1, where it remains until it retrogrades back into Capricorn January 21. On Saturday, January 3, Venus ingresses into Pisces. It will be posited there until it advances into Aries on February 3. Together these may be quite important. As reported in “The Ultimate Book on Stock Market Timing Volume 4: Solar-Lunar Correlations to Short-Term Trading Reversals, both of these ingresses have a much higher than usual correlation to 4% or greater reversals in the Dow Jones Industrial Average. Thus we can expect to see some pretty impressive price swings in stock indices for the first three weeks of the New Year. Venus entering Pisces may be additionally important because Venus is exalted in Pisces, according to principles of astrology. Thus this may favor more upside behavior than downside. The idea should be to buy dips during these first three weeks.

 The most important ingress, however, will be Jupiter beginning its year-long trek through Aquarius. This commences January 5 and lasts through January 17, 2010. This ingress takes place every 12 years, and this one is doubly important because it forms a mutual reception to Uranus in Pisces. That is, Jupiter co-rules Pisces, along with Neptune. Neptune is also in Aquarius. In other words, Jupiter and Neptune are in Aquarius, the natural home of Uranus. Uranus is in Pisces, the natural home of Jupiter and Neptune. The effect will be as if Jupiter, Neptune, and Uranus are all in conjunction for the entire year. That phenomenon itself is enough to offer immense hope to the masses, according to the principles of astrology. And since hope is one of the primary factors in rising stock prices, there is an astrological basis to forecasting stock markets around the world will perform better in 2009 than they did in 2008. Of course that is not saying much since 2008 was the worst year since the 1930’s. But it may mean the equity markets are actually higher for much of this coming year. It is therefore possible that we may see an intermediate-term bull market (3-16 months) within a longer-term bear market (3-22 years, starting in late 2007).

Longer-Term Thoughts

   The bullish intermediate-term outlook for stocks depends upon the positive expression of this huge mutual reception involving Jupiter, Uranus, and Neptune. Normally we would consider the probability of a positive outcome to be very high. But there are dangers in this case because at the same time we will also undergo the beginning stages of a powerful T-square involving Saturn, Uranus, and Pluto. The later cosmic setup happens about every 80-90 years, and tends to coincide with the type of economic crises and financial market meltdown experienced in 2008. The last time these planets formed a T-square was in 1930-1931. But back then, there was no mutual reception involving Jupiter, Uranus, and Neptune, so it may be a little different this time. Or it may be worse. Let me explain.

 Jupiter pertains not only to the principle of hope and optimism, but also exaggeration and excess. Uranus pertains to the principle of the unexpected. In terms of market psychology, Jupiter interacting with Uranus can either coincide with serious rallies that are much stronger than anyone anticipates, or declines that are much more painful than anyone anticipates. Since consumer confidence is at an all-time low, the “surprise” of Uranus would be for the markets to post gains in 2009. Most people seem to be expecting the worst. And this brings in the importance of Neptune. Like Jupiter, Neptune pertains to hopes and wishes. It is more idealistic and romantic than Jupiter. Neptune has faith, Jupiter has confidence. As long as there is faith and confidence, people will feel optimistic about the future, about its leadership, and stock markets will likely rally. But if Uranus coincides with sudden events that undermine that faith and confidence, we could (even likely) instead experience panic and hysteria, the downside of Jupiter and Neptune together. It will seem as if there are no boundaries, as if there is no bottom to how far markets can fall. With Saturn in that T-square with Pluto and Uranus, this possibility has to also be considered within the context of the mutual reception of Jupiter, Uranus, and Pluto. It represents big rallies or big declines, and very possibly both - in that order - this year.

 It is likely to be another remarkable year for financial markets, filled with sharp price swings and political intrigue. My bias is that stocks markets will be more positive than negative, simply because Uranus is involved, and the expectation of most analysts and investors is geared for the worst. Uranus defies expectation. Still, even though I am more positive about most of 2009, traders and investors should be aware of the negative possibilities too, especially if confidence and faith in the new leadership is not sustained. As we enter 2009, there is much hope and faith in the new USA leadership. It is possible this hope can be sustained for several months. If so, look for Aquarian and Piscean industries to do well (media, entertainment, technology, bio technology, automobiles, airplane companies, alternative energy, and green-oriented companies, etc). If this hope for the future is not sustained through inspirational leadership, then it will be another difficult year for investors and most business people.