Review and Preview

It was a quiet week for equity markets around the world, which is typical for this time of the year. However it wasn’t so quiet in the commodity markets, especially the grain markets. In response to the weaken U.S. Dollar over the past three weeks, Corn prices have soared over 35%, from a low of 305 in the March contract to a high of 414 on Friday’s supposedly “quiet” trading. During that same time, the March contract in Soybeans has rallied from 811 to 966, as Wheat from 471 to 602. Gold also had a nice rally from a low of 829 on Tuesday to a high of 874 on Friday. Not bad for a low volume, holiday market. We can expect continued low volume and possibly narrow trading ranges in equity markets again next week, going into the New Year holiday.

Short-Term Geocosmics

 Even though financial markets may be relatively quiet in observance of the holidays, the geocosmic picture is anything but quiet. This means there may be plenty of news, which under normal market conditions would probably result in more impressive price changes. The last week ends with Mars entering Capricorn on Saturday, December 27. This is one of the more important planetary ingresses, because it conjuncts the Sun, and is opposite Pluto, in the Federal Reserve Board chart. This usually coincides with changes in Central Bank policies, directly affecting prices of Treasuries and indirectly currencies. This next day, Mars conjuncts Pluto in the skies. This amplifies the ingress of Mars into Capricorn considerably. After all, we are just in the beginning stages of the 15-year transit of Pluto through Capricorn, a time frame that promises sweeping changes in the world economy and the governments - and even boundaries – of many nations. But beyond that, Mars conjunct Pluto is a potentially dangerous aspect to human lives. Mars pertains to aggression and combat, while Pluto relates to threats of safety. It can be a natural threat, such as severe cold, hot, or volcano eruptions and the like. Or it can be man-made, such as an act of terrorism.

 The week will end with Saturn turning retrograde on December 31. When a planet turns retrograde, its principles are highlighted considerably in terms of human activity. Saturn is cold, in terms of weather. That is why the Mars-Pluto conjunction during the same week could coincide with severe cold temperatures, avalanches, and other acts of nature posing a threat to human life. In terms of financial markets, our rule is to look for any market that is declining into this retrograde of Saturn, give or take two trading days, for Saturn’s nature is to depress and push down. Once it is over, conditions rebound. That is, if prices have been depressed going into a Saturn stationary period, look for them to rally immediately afterwards. This could be the case with stocks, which have been trending more down than up in the past 10 days.

Longer-Term Thoughts

There are three major planetary signatures (at least) in 2009, and they seem to suggest guideline for what to expect in the New Year.

We enter the year in a crisis mode with the 45-year opposition of Saturn and Uranus already in effect. Saturn represents our sense of foundation, and integrity to the structure. It is our belief that things will continue to stand if they have existed a long time. Uranus, on the other hand, is the “shock that rocks” that stable foundation. It is the unexpected, usually an external event that no one is prepared for and results in a shattering of expectations. Plans are forced to be altered. There are probably no two planets that represent the potential for “crisis” and “panic” as a hard aspect between Saturn and Uranus. This particular 45-year cycle unfolds in a five-passage series, starting November 4, 2008 and lasting through July 26, 2010. The actual “influence” of this signature can begin 11 months before the first passage, and last up to 11 months after the final passage. So we are clearly in it now and especially following the full moon of September 15, 2008, which passed over Saturn and Uranus and gave us a preview of what was to come. The world began the current “panic” on that day. Together, these two planets in opposition can coincide with a period of greater than normal “fear” – as in “fear of the unknown” – as in “what is going to happen next?”

The second major signature to unfold in 2009 will be the Jupiter-Neptune conjunction in Aquarius, and both in mutual reception to Uranus in Pisces. That is, both Jupiter and Neptune co-rule Pisces, and Uranus co-rules Aquarius. Jupiter and Neptune are in Uranus’ home sign, and Uranus is in their home sign. A mutual reception operates like a big conjunction. So the effect is like a Jupiter-Neptune-Uranus conjunction. In terms of collective psychology, this can seem like Camelot, a “fairy tale come to life.” Jupiter is exaggeration and hope, Neptune is romance and idealism. Uranus in this case relates to 1) the masses and 2) something very unique and extraordinary, something that has never happened before, at least not like this. I don’t think I would be off-base to suggest that Barack Obama is the current archetype of this part of the celestial drama. That is, he is the new leader of the free world (Uranus, Aquarius), he inspires hope for the future (Jupiter and Uranus), and many people believe he will solve the problems of the world, especially the economy. In other words, he is looked upon as a “savior” (Neptune). Another economic manifestation of Jupiter-Neptune-Uranus can be extraordinary new programs requiring a much greater than anticipated spending effort. In other words, the Federal deficit could rapidly expand, along with monetary inflation followed by price inflation. It can happen very quickly once it starts – probably around the time Jupiter and Neptune conjunct one another (May-December 2009). In this climate of prolonged and suspended “belief that things are going to get better,” all assets can rally in prices, from stocks, to precious metals, to crude oil, etc. The only thing that will fall is the value of the U.S. Dollar.

And then the third major aspect hits. This is the Saturn-Pluto waning square, November 2009 through August 2010. Pluto represents death, debt, and taxes, and the need for a major overhaul. As I see it, the current 0.25% interest rate, combined with another forthcoming $150B+ stimulus package, will cause the economy to spring to life very suddenly (Uranus, Aquarius). Things will start to improve and people will start to have hope again (Jupiter and Neptune conjunct in Aquarius). For a couple of months (maybe 2-8 months) it may seem like the economy is turning for the better. But the economy doesn’t stabilize. It heats up too fast, and instead of deflation, we start to see large jumps in inflation numbers.

As we move from deflation to inflation, two things may happen, first politically and then monetarily. First, the new administration may raise taxes. Not income taxes, for that would be a violation of the campaign promise to reduce taxes for 95% of the population. That would be politcal suicide for Obama, just as it was for George Bush Sr. after the election of 1988. Obama will not make that same mistake (I don’t think he will, anyway). Instead we may see what Europe and other nations have already instituted, which is a consumption tax (VAT, or Value Added Tax). This allows Mr. Obama to keep his campaign promise. However, by creating a new consumption tax, the net result is to raise more monies to pay for the increased spending programs and give the appearance of tackling the out-of-control budget deficit. By the time all the numbers are added up, people may realize that their taxes just went up a lot more than if the income tax was raised. The monetary changes, however, may be more debilitating than the political ones. The Treasury and Federal Reserve Board have no where to go with interest rates in the face of rapidly heating economy and inflation, except up. The Treasury will be forced to offer higher yields on notes and bonds in order to attract buyers for all the cash the USA will need to raise in order to meet its deficit and spending efforts. Interest rates will rise and so will taxes, in line with Jupiter-Neptune rising deficits and inflation, and Pluto’s tendency to raise rates. The result is that assets which had been rising – stocks, commodities, and currencies against the dollar – will suddenly (Uranus again) reverse with a vengeance. They will all start to fall. The result will be what Financial Astrologers would expect from a T-square of Saturn, Uranus, and Pluto, the somewhat like it was the last time there were in such a position (1929-1934). Unless this tendency suggested by Financial Astrology is averted, it looks like we just completed the first leg down in a new bear market, we will now recover, and then we will nave another powerful leg down following that. Plan accordingly. That will be the guideline we will be following in developing our plans for traders and investors in 2009, until proven otherwise.