Review and Preview

    The roller-coaster ride of Mercury retrograde, within the Uranus-Pluto square time frame, continued last week. The previous week, European Central Bank President Mario Draghi surprised the financial community when he announced that the ECB was willing to use its power to print money to preserve the euro and that “Within our mandate, the ECB is willing to do whatever it takes to preserve the euro and believe me, it will, be enough.” To which this column stated, “Hmmmm, maybe I’m becoming too cynical. Whenever anyone tells me “Believe me,” or “Trust me,” my first inclination is to not “believe” or “trust” what then follows - especially when pronounced under Mercury retrograde, where statements are usually invalidated or in need of modification soon afterwards.” By Thursday, all the gains of the prior week had been lost – and more - as ECB President Draghi qualified his statements to a series of “maybes,” “might,” “could,” “possibilities,” and everything but “we would” and “we will.” The market didn’t like the reversal of certainty and conviction from Draghi’s prior week’s comments.

    But then a funny economic-political thing happened on Friday. The payroll reports showed a 163,000 increase in payroll numbers for July, well above expectations. It also showed that unemployment increased to 8.3%. You might wonder how so many new jobs can be created, while at the same time unemployment increases. Well, if you are a Financial Astrological conspiracy theorist – and most of us are by nature – you might consider that these numbers came out 1) under Mercury retrograde and 2) with the Moon on the verge of entering Pisces, which is enough for financial astrologers to wonder about conspiracy theories in any event. What I am trying to say is (and it’s not easy to say anything straight under Mercury Rx with Moon in Pisces) is this: the probability is extremely high that these numbers will be revised sharply in next month’s report. It is important to show good numbers however as the two parties head to their nominating conventions in August (well, really, it is only important to one party to show good numbers ahead of these conventions, and if they are adjusted downwards next month, that’s OK).

    On Draghi’s qualifications of his prior week’s comments, stock indices around the world fell through Thursday. Many fell below weekly and other support levels, which is typical of Mercury retrograde. On Friday’s very unexpected and positive jobs report, stock indices surged upwards again, well above daily and even some weekly resistance levels, again typical of Mercury retrograde. This trickster has no respect for boundaries like support and resistance, much like its cosmic cousin Uranus. He also likes to move fast… err, rather, he changes fast. So every 1-4 days he prompts prices up, then reverses and argues prices back down. The good news is that on August 8 he leaves the slippery trickery of working behind the scenes with conflicting information and misinformation, combined with false buy and sell signals, that all become subject to revisions and a whole different story line later on. In the meantime, talking heads find themselves talking to themselves as they spin around 180 degrees trying to explain why their explanations no longer explain what they just explained. Words don’t matter. Numbers do - until they are readjusted later on after they serve the purpose they were intended to produce. In the meantime, be happy to trade rumors, but trade them quickly, for Mercury doesn’t stand in one place lest he risk getting caught. And he is seldom caught when in retrograde motion. It’s only later that you discover he played you again, unless you learn to play by his (lack of) rules.

    It wasn’t just stock markets that rode the Mercury Express roller coaster last week. Gold and Silver were also sharply up – then down – then back up again by Friday. The same was true with Crude Oil and currencies against the U.S. Dollar, which the latter is once again plummeting after these dizzying twists and turns. And amidst it all, Treasuries continued their move down from last week’s all-time highs. Don’t worry. In classical Mercury tradition, they will reverse again too.

Best Trades of the Past Week

    Where do you start?  There were so many last week, whether in stock indices, currencies, Treasuries, or metals. Let’s take the daily report of Thursday, August 2, for Silver, which stated, “Position traders are flat and may go long at 2690 or better if offered with a stop-loss on a close below 2670. Aggressive traders may do the same.” The low that day was 2688. The next day, Friday (August 3), Silver was up to 2790 and closed at 2780. The day before we also advised for the September e-mini NASDAQ contract, “Aggressive traders are short with a stop-loss on a close above 2660. However look to cover and reverse to the long side at 2620 or better if offered, with a stop-loss on a close below 2570.” The low was 2618.50 that day, and by Friday they were above 2680.

Short-Term Geocosmics

   In February 1968, just as the current Uranus-Pluto got underway following its 112-147 year conjunction, President Lyndon Johnson asked Congress to end the requirement that dollars be backed in gold. He said, “The gold reserve requirement against the Federal Reserve notes is not needed to tell us what prudent monetary policy should be – that myth was destroyed long ago. It is not needed to give value to the dollar – that value derives from our productive economy.” That decision, passed by Congress the next month, fundamentally altered the nature of money in the USA (and even the entire world) and permitted an unprecedented proliferation of credit. – From the MMA Workshop on Gold, Amsterdam, Netherlands, June 23, 2012, and quote from Richard Duncan, Chief Economist at Blackhorse Asset Management, in his new book titled “The New Depression: The Breakdown of the Paper Money Economy.”

    Now we come to one of the more intense geocosmic time bands of the year, starting with Mercury turning back to direct motion on August 8 and ending with Venus making a T-square and translation to the Uranus-Pluto square on August 15-16. The later dates are extremely important because Mars will also make its multi-year conjunction to Saturn on August 15. This is heavy stuff for several reasons.

    First, Mars in conjunction to Saturn is like putting together an irresistible force with an immoveable object. It’s like trying to compete in an auto race with your emergency brake on. Somebody wants something and they want it now. The other party doesn’t want to even consider obliging, but perhaps wants to withhold giving what is demanded just because it makes the demanding party squirm. Sort of like the White House demanding Romney reveal his tax returns, and the Romney camp demanding that the president reveal his high school and college records. How nice it would be if they would both reveal what the other side demands. But of course neither will reveal anything the other side demands because, after all, the other side is not being transparent so why should I? Mars and Saturn are more warlike than conciliatory. In the meantime, everybody thinks the other side is hiding something, and the truth is that both sides are probably hiding something, for after all again, isn’t Pluto prominent today? And Pluto hides AND reveals that which is being hidden. If they want to avoid the wrath of Pluto, they should both just agree to reveal everything the public deserves to know in order to make a well-informed voting decision. Additionally Mars and Saturn represent the height of the drought and loss of crops.

The second matter is Venus aspecting the Uranus-Pluto square. Since Venus rules credit and Pluto rules debt and they are both in hard aspect to Uranus, it implies another onslaught of conflicting reports regarding the exploding world-wide debt crisis. It could be in Europe, the USA, or anywhere, for debt knows no boundaries, especially in modern times where debt is now considered credit – and that reality has been growing ever since the gold standard was dropped over 40 years ago. But the problem is that there are boundaries and limitations that eventually have to be faced. That’s one of the lessons of Pluto in Capricorn (2008-2024), which says…. all this debt has to be paid somehow, some way, and the books need to be balanced or burned (i.e. the debt has to be forgiven as it will probably never be repaid). And how are you going to repay it when your debt is securitized not by your credit (which no longer really exists) but merely by increasing the size of your debt under the promise of your good will and trust to repay it that which you can’t repay?

Lewis Carroll and Alice in Wonderland would find this wormhole rant the equivalent of wise council from the caterpillar. And the caterpillar is an excellent symbol of Pluto for its ability to transform from one form to another, which is exactly what has happened to the concept of a credit-based financial system during the days of the gold standard to the debit-based system of paper fiat currency that is now finding the only way to sustain itself is to grow even more and more debt because world governments are unwilling to be patient with sensible austerity measures. In fact, most world leaders no longer believe that austerity measures make any sense whatsoever. Like the caterpillar, they prefer to believe that what makes sense is to spend more and more money they do not have (i.e. debt) and in doing so they will somehow magically create less and less debt. Did I say Mercury is retrograde? Perhaps the horoscope of the world has progressed Mercury in retrograde now, and probably in Pisces or in hard aspect to Neptune.

Longer-Term Thoughts

    On August 4 at 8:03 AM, President Barack Obama will celebrate his 51st solar return, assuming he is in Chicago (he usually is on his birthday). If so, he will have Virgo rising, his Sun in the 12th house, and Moon in Pisces in the 7th. Don’t hold your breath for any evidence of transparency with this set up, for the 12th house and Pisces prefer to work from behind the scenes. They don’t reveal what they know. Yet with Jupiter in his solar return tenth house, it still seems he is on the path towards an election victory via this method of forecasting. Of course, even with Jupiter high up in the chart, it is in square aspect to the Moon, Chiron, and Neptune straddling around the 7th house cusp in Pisces, and thus he will need to be careful of exaggerations and boasts that could backfire and cause humiliation. From this chart alone, it seems that his biggest obstacles to victory would be carelessness, inaccuracy, and exaggeration. His biggest asset to a victory would be his ability to inspire faith in those who still believe in “hope and change.” Fortunately, it seems he has luck on his side. Unfortunately, he still struggles with the ability to deliver what is promised, and in his mind, it is not his fault. So if he is re-elected, once again it looks like he is likely to inherit a terrible mess. What is a president to do? More importantly, what is the populace to do?