Review and Preview

    It’s a mad, mad world. But then, what did you expect after so many planets changed signs a week ago? If you are a Financial Astrologer, you knew something fundamentally important was changing, at least since early September when the Moon’s North Node began its 19-month sojourn through Scorpio, or September 19 when the second (of seven) waxing squares between Uranus and Pluto took place, or the prior week when four planets changed signs, including the very important three-year ingress of Saturn into Scorpio. These aren’t minor cosmic events. They are huge to a Financial or Mundane Astrologer, and the kind of cosmic transitions that imply fundamental shifts in many aspects of human activity, including financial markets and their long-term trends. Last week was particularly important as we had designated the weekend of October 5-8, +/- 3 trading days, as one of the more important critical reversal periods of this season. It didn’t disappoint.

    But the picture of distortions arising around the world were surprising nonetheless. In the United States, for instance, equity markets peaked out on September 14 ands 21 respectively in the S&P and NASDAQ Composite, surrounding the Uranus-Pluto square date. But in the Dow Jones Industrial Average, prices topped out on – guess what? - October 5, our exact critical reversal date. By the end of this past week, all three indices were falling below important moving averages, confirming primary cycle crests were in place.

    But now switch your attention to Asia and the Pacific Rim. Here you see the Hang Seng of Hong Kong and the All Ordinaries of Australia ending the week at their highest levels in months. Australia’s equity index was at a new yearly high. China’s Shanghai Index also closed on a new multi-week high, just the opposite pattern as witnessed in the states. India’s Nifty Index reached a new yearly high on October 5, the same as the DJIA. But in Tokyo, the Nikkei fell hard all week to a new two-month low and is now challenging its 3-year cycle low of last year.

    In Europe, it was equally bizarre. Most markets topped out in mid-September nearby to the Uranus-Pluto square, and continued their decline throughout last week, similar to the S&P and NASDAQ Composite. But in Zurich, the Swiss SMI made new yearly highs last Wednesday, October 9. Go figure. On second thought, don’t figure. Just realize that in some parts of the world the boom is on, and in other parts, the boom is turning to bust.

    Not only is the luster disappearing off many equity markets of the world (while others look real good), but gold and silver are losing their shine ever since Mars left Scorpio last weekend.  It was a great time for our subscribers who traded metals on the long side following our buy recommendations of mid-May and late June, and so far it’s turning out to look good as we reversed to the short side early last week.    

Best Trades of the Past Week

    The daily report on gold, for Tuesday, October 9, stated: “Aggressive traders are still long with a stop-loss below 1738 after covering 2/3 for healthy profits last week. Let’s exit all for excellent profits at 1779-1783 (or better) and even sell short there with a stop-loss on a close above 1786 or 1800, depending on your risk allowance.” The high that day was 1785, it closed that day at 1765.80, and it closed the week at 1756.

Short-Term Geocosmics

    This week will begin with a new moon in Libra on Monday, October 15. Normally this would seem to be a positive aspect and a correlate to a crest in equity prices, but as explained in last week’s column, that is not always the case. The “good news” may have been the prior week’s unemployment drop, and then the decline in unemployment claims that was reported at the end of the last week.  But as we look around the world, some markets (in Asia and the Pacific Rim) are making highs going into this new moon.

The major short-term geocosmic signature in effect right now may be Mars in Sagittarius (October 6-November 16). This is a combination of dynamics that suggests very wild markets. Mars represents impulse and aggression, the urge to win at all costs. Mars likes to be “first,” and it oftentimes acts before thinking of the consequences. It can be combative and war-like, sometimes believing one can only get his/her way by being the loudest person in the room. And it is in Sagittarius, which relates to the principles of exaggeration and bigness. Sagittarius doesn’t like “small.” So when loud combines with big and exaggeration, things can get wild and bellicose. It is a combination that lends itself to risk-taking activities as confidence is oftentimes high, but sometimes too high. And here is where the problem comes in. If things don’t go the way that one thinks they should, that confidence can turn quickly to hysteria and panic. So with Mars in Sagittarius, financial markets can display powerful rallies or crushing declines, but not likely congestion and small trading ranges.

A good example of Mars in Sagittarius was on display in Thursday night’s debate between Vice-President Joe Biden (who is born on the cusp of Sagittarius) and Republican VP nominee Paul Ryan. Joe Biden’s performance was – in my humble opinion – classical Mars in Sagittarius. That is, he was extremely confident, loud, and bold. In content, he may have had the better debate. But he was also continuously laughing out loud and interrupting Congressman Ryan, and his overly aggressive behavior probably went over well with his base, but probably cost him points with independents.

Longer-Term Thoughts

    “Risks for a serious global slowdown are alarmingly high.”

    - IMF’s World Economic Outlook report, released on October 9, as reported in the Wall Street Journal article titled, “Global Recession Risk Rises: IMF Lowers Growth Forecasts Warns New Downturn Would be Tougher to Tame.”

    For serious Financial Astrologers, there is an awareness of a major shift now taking place as Saturn moves into Scorpio. This geocosmic event took place on October 5 and will remain in place until September 18, 2015, although it will move into and then back out of Sagittarius December 23, 2014 through June 15, 2015.

    When the further-out planets like Saturn, Uranus, Neptune, and Pluto change signs, it tends to correspond with major shifts in collective psychology and activity, according to the principles of that planet and sign. The same is true with the Moon’s North Node, which changes signs approximately every 19 months. The Moon’s North Node began its 19-month trek in Scorpio just last month, on September 2. Thus the sign (not constellation) of Scorpio is being highlighted, and therefore its primary principles will be front and center. Scorpio, like its ruling planet Pluto, has dominion over the four D’s: debt, deficits, downgrades, and default. Furthermore it pertains to changes in the tax codes of many nations. These areas may be closely related.

    The concern about these matters is intensified because the planet moving into Scorpio is Saturn. In both Financial and Mundane Astrology (and even classical astrology) Saturn governs the principle of accountability. It represents a time when the consequences of prior actions are finally realized. Thus in the “Forecast 2012 Book,” Saturn in Scorpio was described as “The Time of Reckoning” in all matters regarding debt and deficits. It is a time when the full consequences of the world-wide debt explosion will have to be dealt with (or so I interpret it that way). The proverbial “can” cannot be kicked down the road any further. Either difficult decisions or sacrifices will be forced upon governments of the world (i.e. austerity), or else those governments default and/or experience downgrades of their credit standing.

    As the new synergy of Saturn (and the North Node) in Scorpio begins to gain traction, the investment community may start to withdraw funds from the market. In market terminology, Saturn rules fear and Jupiter rules greed. The other option is that paper fiat currency becomes very inflated so that its purchasing power drops substantially, thus creating another form of debt, especially for those living on fixed incomes.

    There is no easy way out of this, and there are few - if any – risk free investment strategies right now (there are always trading strategies however). There are never “easy ways out” of situations when Saturn and Scorpio are involved, for these are complex signs, intertwining government taxes, regulations, reforms, and banking crises. The last time Saturn was in Scorpio (November 1982-November 1985) the USA went though a difficult savings and loan crisis and scandal. Many land owners (especially farmers) lost their properties due to the high interest rates and inflationary consequences of the prior 4 years. Some well-healed bankers went to prison. It is possible we will see a repeat of some of these activities and penalties again over the next three years.

    But 1982-1985 was also the time in which tough decisions, sacrifices, and compromises were made by political leaders of both parties (in the USA). Once those compromises were agreed to, the economies and stock markets of many of the world’s nations began one of the longest periods of growth in history. Can we do this again? Yes, it is possible – if we don’t first fall off the “Fiscal Cliff” coming up on December 31, 2012 in the USA, which – by the way – looks a little like Uranus and Pluto in a square aspect.

    In the meantime, Saturn moving into a new sign often occurs nearby to a period when the longer-term trend of various financial markets reverse. In 1982, it was the end of the bear market in stocks and Treasuries, and start of new bull markets in each. This time it appears the opposite could happen as both equity and treasury markets are near their all-time highs. Unless, of course, it is realized that the only way out of the exploding debt crisis is to monetize the debt. And that is why, down the road when the “can” is no longer there to kick because it sailed off the “Fiscal Cliff,” Gold looms attractive to long-term investors. But we are talking long-term here, and not necessarily the next few months.