PLEASE NOTE: There will be no market column issued next week. The following Monday will be the Labor Day holiday in the U.S. and markets will be closed on September 7.
REVIEW AND PREVIEW
I made it to Germany today. It was an easy but long trip as direct routes are hard to come by now. As Jupiter (international travel) will depart from Capricorn (restrictions and travel bans) around the winter solstice, readers may want to look at airlines and travel-related companies for possible investments on any normal corrective decline. But as you see in this week’s column, “normal” corrective declines have been the exception rather than the rule in stocks this year.
Global stock markets were generally favorable last week, with many making new post-crash highs again. The NASDAQ and the S&P both made new all-time highs. The Dow Jones Industrial Average, German DAX, and India’s NIFTY indices are not far behind. Japan, however, had a setback as Prime Minister Abe announced his resignation due to health concerns on Friday, and the Nikkei tumbled.
In other markets, Crude Oil soared to a new post-crash high and Gold is once again testing 2000 as the U.D. Dollar is again testing its lowest level in over two years.
All financial and commodity markets are vulnerable to major reversals shortly as Mars will turn retrograde on September 9 and Jupiter will turn direct on September 12. Even before then, Venus (values, money) will be in opposition to Jupiter, Pluto, and Saturn August 25-September 2, and forming a T-square with Mars on September 4. These are geocosmic reversal signatures, and the entire time between now and mid-September can witness cyclical highs or lows from which reversals unfold. But after that, one of the most powerful geocosmic time bands of the year takes place, September 28-October 19, when Mars is retrograde in its ruling sign of Aries and makes a square to the Capricorn stellium of Saturn, Pluto, and Jupiter. This portends a major shift in world matters, whether in politics, the economy, or nature. And financial markets are likely to react to that shift by exhibiting major reversals of trends. How long and how steep these reversals last depend on many factors, as will be discussed in the longer-term outlook below.
For this week, there is a full Moon on September 2, the same day that Venus will be in opposition to Saturn. One of our basic geocosmic trading rules is that any market that is declining into a hard Venus/Saturn aspect is a candidate for a reversal and rally. Traders will want to identify those markets.
LONGER-TERM GEOCOSMICS AND THOUGHTS
Economists know that they are never wrong. However, economists’ forecasts of high frequency data releases have been less correct than they could be. Why is this? … This is not a conventional economic cycle. Peoples’ reaction functions are different to previous cycles. Economic models assume reaction functions are stable. Finally, the pandemic accelerated structural changes in the economy. Economic data is slow to recognize change. This makes it hard to fit macro and micro data together. – Paul Donovan, “Why Have Forecasts Become Less Correct?” UBS Weekly Blog, August 21, 2020.
We should talk about this. Not only are economic cycles distorted as of late, as one of my favorite economists, Dr. Donovan, observes in the above quote, but so are cycles in world stock and treasury markets. This distortion of cycles is not apparent in the cycles of precious metals, like Gold, or currencies, where cyclical patterns in both of these sectors have corresponded very well with cyclical and geocosmic studies this year.
But why has it been difficult to enact trades based on forecasting trading cycles in stock indices? It may be, as Dr. Donovan suggests in regard to economic cycles because the pandemic has “… accelerated structural changes in the economy. Economic data is slow to recognize change. This makes it hard to fit macro and micro data together.” This is certainly correct and does affect market behavior. But I would go further and say that the greater underlying cause to the 2020 distortions in stock and treasury market cycles is due to the massive monetary accommodation (liquidity) provided by the central banks of the world. In many cases, central banks have actually intervened and made large purchases of stocks and bonds, known as “quantitative easing.” This type of financial intervention and engineering greatly distorts the price of these securities and negates the concept of “free markets” upon which normal cyclical patterns unfold. This then is the basis for the saying, “Don’t fight the Fed.”
It’s not that the cycles in stocks and treasuries no longer take place, or that geocosmic market timing factors no longer work in these markets. They still do. Market tops and bottoms still unfold “on time.” However, the normal pattern of price activity – price objectives to trends and countertrends – is greatly distorted. Rallies are much stronger and longer than usual and corrective declines much less than usual. Or, in the case of treasuries, the amplitude of price activity has become extremely narrow. Cycles and their reversals are there, but normal 40-60% corrective price declines have become rare. Hence, it is difficult to buy a market bottom on a 40-60% correction in a time band when a cycle is due and geocosmics also indicate it is time to enter, but there is not decline of that amplitude to execute a trade at a favorable risk/reward ratio, which is critical to the trader. In these situations, it is better to just “buy and hold” and “not fight the Fed.”
However, this type of financial engineering also creates “asset bubbles” in which these same markets fall much harder than expected when an unexpected shock (a “Black Swan”) occurs, and especially if central banks have pulled back from satisfying the addiction of overspending and debt explosion caused by the fiscal mismanagement of world governments. Then, instead of the “less than usual” corrective declines, you get considerably “more than usual” dangerous declines.
We saw the same phenomenon occur in 2012-2015. Then too there were no “normal corrective declines.” The rallies went higher and lasted longer than normal. What do these periods of market pattern distortions in financials have in common from the geocosmic standpoint?
The 2012-2015 instance occurred under the long-term Uranus/Pluto waxing square. In the past, Uranus/Pluto hard aspects coincided with accelerating debt crises that led to stock market crashes. But that was before the Fed Chair Ben Bernanke initiated unorthodox policies known as ZIRP (Zero Interest Rate Policy) and QE (quantitative easing) to counter the liquidity crisis. It worked. Instead of falling during that period, world stock markets soared, as monetary liquidity and debt increased at a historic level. The result was an asset bubble as investors were virtually forced into equities unless they were willing to accept the lowest returns on their savings ever. When the drug (low-interest rates and QE) was taken back in late 2018, investors panicked. But then the Fed and central banks started a new round of ZIRP. When the pandemic was unleashed in February, the stock market hemorrhaged. QE came back, liquidity and debt increased sharply, and investors have once again returned to stocks. This took place as Saturn and then Jupiter conjoined Pluto, January-November 2020.
The purpose of this column, is to relate economic and financial market phenomena to geocosmic studies What is the common geocosmic denominator for these periods of market cycle distortions? Pluto. The god of the underworld planet is associated with both debt and intervention (“financial engineering”) to achieve a desire result. In a hard aspect to an outer planet it can – and has in the 21st century – coincided with 1) historic increases in world debt, 2) poor fiscal mismanagement requiring borrowing by world governments, and 3) efforts on the part of central banks to correct poor fiscal policies by intervening in financial markets and engineering the demand for stock and/or treasury assets.
The final Jupiter/Pluto conjunction for this cycle takes place on November 12, 2020. Chances are the government will continue to spend trillions of more dollars on stimulus programs, leading central banks to accommodate by increasing monetary liquidity, and giving rise to yet another asset bubble in stocks and perhaps treasuries. If they start to pull back on these expansive monetary behaviors as Pluto begins to leave its orb of influence to Jupiter – after the U.S. elections are over – what do you think will happen as the next major aspect that unfolds in 2021 is Saturn square Uranus in Taurus?
Hopefully, the above explains why it has been challenging to establish a favorable risk/reward position trade in the stock market since our sell signal February 12-20 at the high preceding the crash. It is not from lack of trying to buy corrective declines, but from lack of those corrections falling to “normal” price target levels when cycles are due. Yet it doesn’t alter our long term views that are based on the historical patterns in both geocosmic and cyclical studies.
We continue to anticipate another severe decline based on these studies, but at the same time, we are swimming upstream against the Fed’s willingness to enable unchecked government fiscal policies that seemed doomed to create asset bubbles that will eventually result in another serious selloff just as soon as central banks try to restore to normalcy. With Saturn conjunct Pluto in 2020, the long-term cycle low in the interest cycle is due this year, as detailed in the Forecast 2020 Book. We will, of course, update that analysis in the Forecast 2021 Book, due out in three months.
In the meantime, I wouldn’t (and won’t) give up on the correlation of either cycle or geocosmic studies to any financial market. It is working very well in commodity and currency markets and it will return to equity markets too as soon as the Fed and other central banks relax their enabling policies supporting poor fiscal management. You know the saying about those who ignore history: they are doomed to repeat its mistakes and experience similar consequences. There is a time to appreciate your capital and a time to protect it. The former has been present since March 23, 2020. But the latter may not be that far away. Viewed from another angle, the time to purchase assets at low levels is not here yet, but it may be coming sooner than many think. Cash will again become king at some point. But in which currency or storage of value? We will discuss this further in the Forecast 2021 Book.
NOTE 1: The Annual Forecast Pre-Order Event is now underway. The Forecast 2021 Book may now be pre-ordered! Our preliminary outlook is that 2021 will be another very important year with the long-term Saturn/Uranus square aspect taking place. Although 2020 is not yet over, several forecasts made in the 2020 book have already unfolded. For a review of the Forecast 2020 Book so far, please visit our Scorecard.
This pre-publication period will be in effect through October 31 and will include our once-a-year sale discounts on both the annual Forecast Book and MMA Subscription Reports. You may pre-order Forecast 2021 at the discounted rate of $45. After the pre-order event ends, the price will increase to $55 on November 1st. Order both an eBook and print book (Forecast 2021 Bundle) for only $65, a savings of $45 off the standard rates. Save 10% off any subscription ($275+) with the purchase of Forecast 2021. Use code SALE2021 at checkout to receive the subscription discount.
This year’s Forecast book will no longer include the individual Sun Signs forecasts. Instead, there will be a separate publication for those who enjoy the yearly trends for the twelve individual signs. It is titled “Trends for the Twelve Signs 2021,” and will be written by Antonia Langsdorf-Merriman and Raymond Merriman. Antonia is one of Europe’s most renowned astrologers and has written an annual Sun Sign book in German for the past several years, based on interviews conducted with Ray Merriman beforehand. That same format will be followed for the “Trends for the Twelve Signs 2021” book. The cost of this book will be $25, with a further discount if ordered with the Forecast 2021 Book.
NOTE 2: The start date of the second 2-year program of the Merriman Market Timing Academy will take place January 16, 2021! This is the rare opportunity (only the second time in 7 years) to learn the MMA Methodology of financial market timing and financial market analysis. The first course took place 2013-2015 and graduated 20 apprentices, many of whom are now professional market analysts. Several of the graduates now serve as analysts of specific markets for various MMA subscription reports. This second 2-year program will be offered online and will be led by MMTA graduate Gianni Di Poce and founder Raymond Merriman. There will be 6-7 classes per course, 8 courses in all. Each class will last 2 hours each. These will take place live on Saturdays, and MP4 recordings will be available the following Monday to those who register. There will be a one-month break between each course. The cost for the 2-year program in 2013-2014 was $20,000 and required students to spend 3-4 day courses onsite in at the Michigan State University Management Center in Troy, Michigan. This second series of courses will be online and will cost $12,000, with a 10% discount for those who register by December 14, 2020. To those who enroll for the “MMTA Apprentice,” designation, you will need to know how to read an ephemeris and/or take a pre-entrance exam to demonstrate this aptitude before beginning Course 2. If you don’t know how to “Read an Ephemeris,” a link to an MP4 presentation will be provided at no cost to those who sign up for at least the first year. An “MMTA Certificate of Graduation” (as an MMTA apprentice) will be awarded for those who take and pass exams at the end of each course and complete a research project with teams of up to three members each between courses. However, courses may be taken separately, without an entrance exam, course exams, or research papers if one only wishes the knowledge without the certificate of graduation as an “MMTA Apprentice.” For more information and schedule, please visit MMTA and find out how you can become a financial market timer and analyst, the MMA way.
NOTE 3: MMA is pleased to announce that it will be publishing a new book titled The Grand Conjunctions: Shifting Times, by one of the world’s leading Mundane Astrologers – Chris McRae of Edmonton, Alberta, Canada. This a fascinating book on the history of Grand Conjunctions involving the outer planets. It is especially appropriate today because the grandest of all outer planet conjunctions – the Jupiter/Saturn synodic cycle – will take place on December 21, 2020. The insights that McRae provides on these rare but remarkable configurations will make this one of the most valuable additions to the field of Mundane Astrology. It is our intention to have this book in print by that time. In the next couple of weeks, we will provide more information and details on how to order.
Two weeks to sign up! September 13, 2020, 1 PM, EDT. “The USA 2020 Presidential Election: An Astrological Perspective,” featuring an online analysis on the charts of the election, between world class astrologers Lynn Bell (Paris), Caroline Casey (Washington D.C.), Lee Lehman, Ph.D. (Asheville, NC), Christeen Skinner (London), and emceed by Raymond Merriman. The cost for this event is $55. For more information and reservation, please visit the ISAR website at https://isar2020.org/ and prepare to be amazed! If you are interested in this election, this is an event not to be missed!
October 11, 2020: Special Q&A webinar for MMA Subscribers with Raymond Merriman! 4:30 PM, EDT or 1:30 PM PDT 9:30 PM GMDT). This webinar is free to those who subscribe to any MMA subscription reports, or $55 if not a subscriber. Subscribers may send in a question they wish Merriman to address ahead of time. The only requirement is that the questions be of general interest to everyone attending the Q&A. Questions about a specific market are fine. It is possible that there may not be enough time to address all questions, so they will be answered on a first come, first serve basis. This event will last 90 minutes. You must register to attend at least two days before the event and a link to enter the meeting will be sent to all registrants that week.
January 16, 2021: The first class of the 2-year program of the Merriman Market Timing Academy begins! For details, see the above announcement, or visit MMTA.
Disclaimer and statement of purpose: The purpose of this column is not to forecast the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language. This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will often cite what happened in various stock and financial markets throughout the world in the past week and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures may affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycles’ analyst looking at the military, political, economic, and even financial markets of the world. It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand the psychological dynamics that underlie (or coincide with) the news events and hence potentially affect financial markets.
No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers of this column assume any responsibility whatsoever for anyone’s trading or investment decisions. Readers of this report should understand that commodity futures and options trading are considered high risk.