The Dollar soared to its highest level in a year

REVIEW AND PREVIEW

Stocks fell on Friday as geopolitical concerns pushed the Turkish lira to a record low against the dollar… The lira fell 20 percent after President Donald Trump authorized the doubling of metals tariffs on Turkey. Trump's comment came after Turkish President Recep Tayyip Erdogan asked citizens to "change the euros, the dollars and the gold that you are keeping beneath your pillows into lira," noting this is "a domestic and national struggle. – Fred Imbert and Alexandra Gibbs, “Dow Drops 200 Points on Geopolitical Concerns as Turkish Lira Plunges,” www.cnbc.com. August 10, 2018.

The intensity of the Mars/Jupiter/Uranus combination in effect August 1-7 finally broke the log jam of price paralysis signified by all the retrograde planets that have been in effect since July 26. The August 6 column had stated, “Last week was the middle of the cosmic tsunami containing an abundance of Uranus signatures that began July 24 and will continue until August 9. As anticipated, unexpected geopolitical and economic announcements took place and several markets abruptly reversed their trends. However, the price activity in financial markets was not as explosive or dramatic as one might expect from the slew of Uranus signatures. The rare abundance of retrograde planets may have something to do with that.” I think they did. But then the force of Mars square Uranus on August 1, Sun square Jupiter on August 6, Uranus going stationary retrograde on August 7, and Venus square Saturn on August 9 was too much to contain that tight price range in many of the world’s equity markets. Something was due to give, and it finally came in the form of new tensions (and more tariffs) between the USA and Turkey. The Lira broke, and with it, so did the Euro, followed by European and American equity markets. The Asian markets had closed by the time the news broke.

Once the hammer fell, investors immediately flocked to the US Treasuries, the US Dollar, and Gold. The Dollar soared to its highest level in a year. The Treasuries made a new cycle high. The rally in Gold, however, was short-lived as investors realized that the yellow metal couldn’t go too far with the Dollar so strong, and so by the end of the day, Gold pulled back, and Silver followed. In other markets, crude oil and bitcoin dropped to their lowest levels since June, although crude oil bounced back nicely during the day low on Friday.

 

SHORT-TERM GEOCOSMICS AND LONGER-TERM THOUGHTS

With six planets now retrograde as of August 7, there is no guarantee that the breakout in equities to the downside on Friday will continue this week. One of the characteristics of Mercury retrograde (July 26-August 19) is that markets are vulnerable to sudden breaks of support and resistance, only to be reversed again shortly afterwards in what traders refer to as “false breakouts.” This was very evident last week, as the DJIA and S&P, for instance, broke new cycle highs on Tuesday, August 7, the very day that Uranus turned retrograde, which also just happened to be the exact midpoint of Mercury retrograde. All stock indices looked like they were breaking out to the upside, as they broke through one resistance zone after another, on their way to their highest levels since they broke down in February. But it wasn’t to last, as equities fell hard the last two days of the week. Typically, these thrusts only last 1-4 days before reversing again with Mercury retrograde, which is why we do not advise initiating new position trades under this signature. Too often traders will find that it is just too pre-mature to get overly excited the end of the bull market trend is at hand.

There are two other geocosmic factors to consider in this analysis to be careful of committing oneself to the idea that the bull is completely dead, even though he looks quite wounded. First, the Venus/Saturn square of August 9-10 has a history of corresponding to lows in stock indices from which rallies follow. Given that the next major aspect will be Jupiter trine Neptune on August 19, the same day that Mercury turns direct, there are multiple cosmic reasons to think the markets can recover quickly. After all, Mercury is commerce and Jupiter is world trade. So, it was no coincidence that late last week the Trump administration issued positive messages that tariffs against its European partners may be cut back considerably. Next up, going into or shortly following August 19, may be the rift with China. With Jupiter soon to move into Sagittarius (November 8), there is plenty of cosmic potential for all the threats and fears of restrictive world trade to be lifted. The markets will need that after Friday’s debacle.

The second geocosmic factor to consider is that Venus just ingressed into Libra, its ruling sign, where it will remain until September 9. More often than not, equities will rally during this period, with an exception possibly being when that Venus is in square aspect to Saturn, as was the case late last week. Venus in Libra, however, also has a bearish correspondence to Silver, and Silver continued to stumble last week, closing near the lows of the week. Gold and Silver don’t do very well under strong Jupiter aspects either, and Jupiter has a big aspect on August 19 when it trines Neptune for third and final time. The combination of Jupiter trine Neptune and Venus in Lubra could correspond to an important low in metals within the next two weeks (please refer to our special report on Gold issued four weeks ago in the MMA Cycles Report and updated in the August issued that released last week).

I am on vacation this week, but will continue to update daily subscribers, as I believe the next few trading sessions will be very important in understanding the longer-term picture in stocks and metals (crude oil too).