Review and Preview

The last two weeks have presented an interesting drama between the various aspects of geocosmic studies, and the market behavior in a distorted primary cycle.

On July 10, Mars began its “translation” of the forthcoming Saturn-Uranus opposition. On that day, it formed its conjunction with Saturn. On July 15-16, three-four trading days later, many (but not all) of the equity markets of the world ended a multi-month decline at their lowest levels in about two years. This was also at the end of the “Sagittarius Factor,” a 2-day monthly lunar cycle zone when the moon is in Sagittarius. This particular solar-lunar cycle has a higher than average correlation to reversals in U.S. stocks. The Dow Jones Industrial Average, for example, dropped to 10,827 on that day, July 15, its lowest level since its July 18, 2006 low of 10,683.

By Wednesday-Thursday of this past week, July 23-24, as the Moon was in Aries, the stock markets topped out and then had a very sharp one-day decline. In the DJIA, for example, the index had risen to 11,698, a gain of over 860 points in only 6 trading days, or nearly 8%, well above the 4% minimal level that the lunar reversal signature from July 16 indicated. But on July 24, the DJIA fell 283 points in just that one day. The high of July 23 took place under the very powerful solar-lunar reversal signature of the Leo-ingress Sun and Aries moon. This solar-lunar cycle has a weighted value score of +183. Anything over 120 has a “better than average” probability of reversing from an isolated low or high, according to the studies in “The Ultimate Book on Stock Market Timing, Volume 4: Solar-Lunar Correlations to Short-Term Trading Reversals.” Anything over +150 is very strong, and above +200 is unusually strong. This was one of the stronger solar-lunar correlations to a short-term trading reversal. And it worked immediately. Thus it was an excellent signal because a trader’s greatest goal is to achieve “maximum profit potential with minimal market exposure.” Application of the solar-lunar studies do not get any better than these last two instances of July 15-16, and then July 23-24. By the way, these solar-lunar weighted values are now given daily on our web site at www.mmacycles.com.

But back to the Mars “translation” of the forthcoming Saturn-Uranus opposition. The low of the move occurred on July 15 (in the DJIA), the 25th week from the previous primary cycle low of January 22, when the DJIA had put in its prior yearly low at 11,634. That level was surrendered, plus another 800 points, into the low of July 15. Yet at the same time, the NASDAQ Composite only fell to 2167, which was 12 points higher than its yearly low of March 17, 2008. It didn’t fall back to its 2006 levels. It didn’t even fall below its low of March 17, 2008. This is a classical case of “intermarket bullish divergence.” This pattern, in a distorted primary cycle and at the end of a very long and heavily populated geocosmic time band, might account for the strong upsurge that began on July 16, even with Mars in translation to the forthcoming Saturn-Uranus opposition. Typically, primary cycles in the DJIA last 13-21 weeks. Since this one lasted 25 weeks, it was a “distortion” (expansion) of the normal primary cycle. When primary cycles “distort” and occur outside of their normal time band, it is usually followed by powerful rallies that can last several weeks. Now let’s see if this one does the same. Or, in typical Uranus fashion, will this market make another break back down either during or at the end of this “translation” period, which lasts into August 6? Besides that, the Mars-Uranus opposition at the end of this period can coincide with more earthquakes, tornadoes, hurricanes, electrical blackouts, accidents or even a terrorist event. It is not wise to take on risky ventures.

And has anyone noticed that Crude Oil is now falling rapidly since the Sun-Jupiter opposition of July 9, in line with its 18-month cycle low that is due anytime before the end of October? Our call for a $30.00-50.00 decline by October is coming close, as Crude Oil has now declined $25.00 in just two weeks.

Short-Term Geocosmics

 This week begins another critical reversal zone. But this time it is much more limited and therefore focused. From July 26 through August 6, there will be four major geocosmic signatures present. The middle of that period coincides with the solar eclipse of August 1, so there could be a strong “eclipse-effect” upon world financial markets within one trading day. August 1 also coincides with the release of the Unemployment and Payroll reports in the USA. The combination could be dramatic, especially given that it is a solar eclipse in the sign of Leo, the sign of drama. Oftentimes this type of eclipse also has a correspondence to big price swings in grain prices.

Longer-Term Thoughts

Presidential election years in the USA seem to produce unusual market patterns. Conventional wisdom (and a good deal of historical data) holds that the U.S. stock market generally rallies into an election, and then falls into the middle of the President’s four-year term. In actual practice, however, the stock market rallies into an election and tops out afterwards when the same party is voted back into office. If this tendency continues, it would suggest that the low of July 15 would hold, and a new bull market, leading to all-time highs, would be underway and would last into 2009, if Republican John McCain was to be elected. On the other hand, if the Democratic party and its candidate Barack Obama is to be victorious, this would suggest that the U.S. stock market has already topped out. It will not make a new high this year.

But through various studies that I have published, there is also a pattern of the “Pre-Presidential Election Year” trough that occurs between October and March preceding the election. Sometimes this trough can be very unnerving, and expands as late as July. It can even take out the low of the previous year or two. There are only two instances in the past 50 years which have relevance to this year’s election cycle. In 1960, the U.S. stock market also made a low in July, followed by a sharp 4-week rally that did not make a new yearly high. The market then plunged to a 2-year low right into the election. That was the year John F. Kennedy, the young and charismatic Democrat, won a narrow victory over the more experienced Republican, Richard Nixon. The Republicans had held the presidency under Dwight Eisenhower for the prior 8 years. Many believe this year’s 2008 election has many of the same qualities – and themes – as the 1960 one, with many comparisons between the young and charismatic Barack Obama to John F. Kennedy. After the stock market low that formed right near the election date, a new bull market commenced that took the DJIA to record highs in the following 9 months.

The second instance took place in the 1984 election. The incumbent, Ronald Reagan, was mired in a political scandal involving support of Nicaraguan rebels. From an all-time high in October 1983-January 1984, the stock market began a multi-month decline that also lasted into July 1984. It fell to its lowest price since early 1983. But then it suddenly reversed, starting a rally that would carry it to new all-time highs into August 1987. Reagan and the Republicans won re-election in landslide.

What can we learn from the past regarding this year’s election? Any new low in the U.S. stock market between now and the election probably favors an Obama victory. And a new high probably favors a McCain victory. The fact that the DJIA took out its lows of January and March is not a conclusive sign that this is a bear market. There have been instances in the past where this has happened as late as July in an election year, and the market still soared to make new yearly highs shortly afterwards. Very few people expect this, of course, because this is not the “normal” chart pattern. But it has happened before and can still happen again. But if the market makes a new yearly low after July and before (or into) the election, it usually portends a change of party in office. It means the current party in office is losing its power and the support of its people. With a 29% approval rating for the current Republican president – the lowest on record – Republican candidate John McCain has his work cut out for him.

But there is one question I would like to ask Senator McCain (and Senator Obama), given my comments in last week’s column regarding the abundance of aspects in his (McCain’s) chart to the Mars position in the USA chart, and its correlation to expanding military activities if President: Would you re-institute the military draft? Americans (and others around the world) would like to hear some “straight talk” on that question. With Pluto going into Capricorn for 15 years immediately after this election, the symbolism of forced (involuntary) military service is certainly a strong possibility in many countries, including the USA, which has Pluto in Capricorn natally. This can be a signature of excessive nationalistic tendencies by world leaders, to the point of forcing citizens to work for (serve) their countries, even against their will, in the name of patriotism.