Equities: Expect sharp rallies followed by worrisome downturns

Note: Financial markets will be closed in the USA on Monday, February 15, in observance of President’s Day.

REVIEW AND PREVIEW

The bear is alive and out of hibernation now. However, this is an election year in the USA, so equity traders must continue to expect sharp rallies followed by worrisome downturns.

Last week was more of a worrisome downturn. World stock markets continued to be extremely volatile, with several indices falling to new yearly lows before Friday’s nice recovery in the USA. Yet, that was not enough to alleviate the worries - not with the geocosmic environment that is ahead.

Many equity markets have fallen over 10% in just the first 9-10 trading days of this month. For example, the Japanese Nikkei traded as high as 17,905 on February 1. One week later, on February 12, it fell to 14,865, its lowest level since October 2014. That was a loss 17%. If you go back to the double top highs of last year under the Jupiter/Uranus trines of March and June, the decline in the Nikkei has now snowballed to a whopping 29%.

In Europe, many indices we track fell double digits from their highs of February 1. The German DAX fell below 9000, to 8899 on February 11, its lowest level since October 2014 and a decline of 28% since its all-time high of April 2015. The London FTSE fell over 10% in a little over a week, to a low of 5499 last Thursday. The last time it traded below 5500 was in July 2012.

The decline was not so hard in the USA, where equity markets exhibited a case of intermarket bullish divergence. The nearby S&P futures fell to 1802 on February 11, it’s lowest mark in two years. The NASDAQ Composite plunged to 4209 the same day, a level not seen since October 2014. The Dow Jones Industrial Average, however, found support just above 15,500 on February 11, which was above the 15,450 low of January 20 and above the 15,370 low that may have marked its 4-year cycle trough on August 24, 2015. Closing up over 300 points on Friday conforms this as a bullish intermarket divergence signature. Will this bullish signature last or be negated? The geocosmic landscape isn’t too promising, but a bullish chart pattern like this, within three trading days of our February 8 critical reversal date, should not be ignored.

The bigger story than stocks, however, continues to be the bullish rampage of gold under the Mars-in-Scorpio signal that was discussed at length in this year’s Forecast 2016 Book, the Forecast 2016 webinar of January 10, and the recent issues of the MMA Cycles Report. That signal is working beautifully. Starting from the December 17 double bottom around 1046 – exactly in the time band outlined for a low - gold has now soared to a high of 1263.90 late last week, a gain of over 20%. It has now exceeded the previous primary cycle crest of 1191.70 on October 15, which means the long-term cycle has changed from a bearish cycle’s pattern to a bullish formation according to one of the major trend indicator signals we use. What does this mean for the future of gold? We will cover that matter in a Special Report on Gold that will be released in this month’s MMA Cycles Report, due out to subscribers of this report on Monday evening, February 15. We will outline the status of the Mars-in-Scorpio signature then, too.

Also noteworthy last week was the new contract high in the March T-notes, and the multi-month highs in the Euro currency, Japanese Yen, and silver.

SHORT-TERM GEOCOSMICS

The most important geocosmic factor (to us) coming up this week is heliocentric Mercury moving into Sagittarius (February 15-26). This is one of those combinations that often coincides with very large price movements, especially in precious metals and currencies. If last week’s critical reversal date did not correspond with a reversal in stocks, treasuries, and metals on Thursday, February 11, then we may see these explosive moves ramped up even more. Sagittarius is the sign representing exaggeration. It knows no boundaries, or at least it respects no boundaries. It is driven to exceed any boundaries, which in financial markets are defined as support and resistance. If last week’s lows are taken out in markets that have fallen (i.e. stocks, crude oil, which fell to another 12-year low), watch out below for a free fall, often referred to as a waterfall. If last week’s highs are exceeded in any markets that have rallied strongly (i.e. treasuries, currencies, metals), watch for a continuation of the parabolic pattern, often known as a “bubble” (not to be confused with a nickname ascribed to one of the candidates running in the U.S. Presidential election). The best analogy I can give is to imagine a truck going down a steep hill and its brakes going out.

This time band overlaps with the transit of Mars over 23-27 degrees of Scorpio, which forms a powerful T-square to the Mercury/Pluto square in the chart of the New York Stock Exchange (May 17, 1792, known as the “Buttonwood Agreement”). My observation of such a transit over the past 30 years is that stock prices collapse into this time band (Feb 16-29) approximately 90% of the time. Yet, this is in conflict with last week’s intermarket bullish divergence chart pattern that occurred within a geocosmic critical reversal date (CRD) time band. Which will win out? I do not like betting against either, but only one will survive.

LONGER-TERM THOUGHTS AND MUNDANE ASTROLOGY.

The deficit is rising again largely because spending is climbing rapidly again, an estimated 6% this year, or triple the rate of inflation. Even an estimated federal revenue increase of 4% for the year can’t keep pace with this kind of spending blowout.... Now for the bad news. CBO estimates that deficits will continue to rise each year after Mr. Obama leaves office. This is a fiscal time bomb that Mr. Obama will leave his successor, thank you very much. – “The Deficit Rises Again,” Wall Street Journal, editorial page, January 26, 2016.

Obama’s budget reinforces that fixing the finances of the federal government is the country’s most important domestic issue… In short, Obama proposes that taxes and outlays increase faster than economic output. That’s not sustainable. The most telling indicators of unsustainability relate to the national debt. Under Obama’s budget, it would remain disturbingly high, nearly 100% of GDP… Fixing the finances of the federal government is the most important domestic issue of our time. But, at present, it is a political orphan. – “Ignoring the Top Priority of Our Time,” Robert Robb, The Arizona Republic, February 12, 2016.

As important as the short-term planetary combinations are next week, they are not as major as the incredible cosmic patterns that will unfold this spring (March 23-June 17). As significant as the changes witnessed in financial markets have been the past few weeks (really, since the start of this year), the potential for long-term cycle reversals are even greater with the long-term planetary cycles that will occur March-June. These signatures not only signify important movements in financial markets, but also in world politics and possibly events of nature. I will only briefly cover them here, but you may want to visit our YouTube channel early next week where we will post an interview conducted with one of my favorite interviewers, German journalist and astrologer Antonia Langsdorf.  The subject will be on the amazing mutable T-square taking place between Jupiter, Saturn, and Neptune this spring.

For those who study Financial Astrology, consider the following: Jupiter will undergo its second of three passages in a square aspect to Saturn on March 23, a 20-year cycle. Two days later, Saturn will turn retrograde, and Venus will make a T-square to Jupiter and Saturn. Agreements between world leaders, with one another as well as with their own legislatures or courts, may be severely tested.

On April 17-18, Mars turns retrograde in Sagittarius (near Saturn), and Pluto turns retrograde in Capricorn. Over the following three days, Venus will square Pluto and conjunct Uranus in Aries, the sign ruled by Mars. Mars and Saturn together in a fire sign (Sagittarius) is a classic signature of war threats. Mars and Pluto highlighted together can symbolize a time when cruelty and threats to human lives are greater than usual. It may even represent a threatening development with weather or natural phenomenon (volcanos, heat spells, etc).

On May 26, the third and final passage of Jupiter square Saturn occurs. In addition to the correspondences listed above for this aspect, it also coincides with fears of a recession, an economic slowdown, and obstacles with trade agreements. Given that Saturn is in Sagittarius, this may represent the first real test of the USA/Iran nuclear agreement, for Saturn in Sagittarius also represents struggles and frustrations with religious matters, ideologies, and leaders. This may not bode well for the stock markets of the world.

Finally, on June 17, Saturn will make its second passage of the square to Neptune (the first passage was on November 26, 2015, and the last will be September 10). Four days earlier, Neptune turns retrograde. This 36-year cycle of the waning square between Saturn and Neptune is very important in financial markets (especially interest-rate related markets), as discussed in several columns and the recent Forecast 2016 Book and webinar. Remember, the last waning square between Saturn and Neptune took place September 1979-June 1980. Remember what happened to interest rates, inflation and precious metal prices then. You may be seeing a similar replay, especially if inclement weather harms the 2016 growing season for grains and other foods.

In terms of national politics, this is the season when the 2016 USA presidential election will get very intense as candidates hammer one another with negative ads. One of the areas that will likely get more attention than it has so far is the economy. Each candidate may have to outline specifically how he/she will deal with a national debt that will approach $20 trillion by the time Obama leaves office. How will Bernie afford to pay for all of his promises that Hillary is steadily forced to move further and further left to claim for her campaign as well? How will Trump afford to deport 11 million undocumented immigrants, and build the huge wall to keep new ones out, as he promises? Who is going to have any money left to subscribe to my reports when the banks are brought down as part of the new attack on them as the evil empire?

Who is going to pay this out-of-control debt that the out-of-control government leaders of the world and USA are racking up for the younger generation by their out-of-control spending spree? Who cares? Apparently, hardly anyone cares today, because the subject does not attract votes. People want to only hear about what they are going to get, not what they are going to have to pay or sacrifice in order to get it. Yet it may become a more pressing topic this spring, according to the study of Financial Astrology. Responsibility matters when Saturn is strong in the heavens. But deniability is also in large measure when Neptune is strong too.

Saturn and Neptune. What an odd couple. What an odd election cycle.