Weekly Column: A signature of extreme “luck,” it is perhaps the one “good thing”

Review and preview 

The world of crypto has had another of its periodic convulsions. Does the bursting bubble (again) matter? Building a bubble transfers genuine wealth from bubble buyers to bubble sellers. Someone who sold Bitcoin at USD 70,000 locked in the wealth they received, and they now hold an asset (dollars) of economic value. The buyer, who thought they had something worth USD 70,000, now holds something that, if not worthless, is worth less. Normally economists worry about wealth loss. Sudden drops in wealth make people feel very bad. Loss aversion exaggerates the importance of the loss. This encourages higher savings and lower consumption. – Dr. Paul Donovan, “Does Bursting the Bitcoin Bubble Matter?”  May 13, 2022.

Anyone can create a virtual currency, market it to investors and use the money as he pleases. While fiat currencies such as the dollar are backed by governments, crypto currencies are backed by the faith in their developers. What could go wrong? Investors found out this week.( Editor’s note – fiat currencies are also only backed by people’s faith in their government). –Wall Street Journal Opinion Page, “Warnings From the Crypto Crash,” May 13, 2022.

It may have been Friday the 13^th but the equity markets weren’t spooked by the Dr. Jekyll/Mr. Hyde show that’s been playing recently. Or maybe this was an inverted case of being spooked because of Mercury retrograde. Many markets will appear upside down under the Trickster’s reign. In any case, the carnage of the past six weeks paused after Thursday’s new cycle low. Friday reversed all that and was a strong up day. But will it last or just be another one-day wonder as the market’s personality changes again?

For many indices, the sell-off that ended Thursday represented a new yearly low. For others, it was a challenge to the previous lows made between January 24 and March 9 of this year. It was a nervous week for investors and traders, every bit as wacky and wild as the Trickster turning retrograde in the wild and wacky sign of Gemini (its ruling sign) would suggest – and even more so following the even more disruptive nature of the Sun/Uranus conjunction the week before on May 5. That just happened to also be in the middle of the two-week eclipses (April 30 and May 15-16). In other words, this is an intense schizoid cosmic time band.

It wasn’t just the Sun/Uranus, Mercury retrograde, and 2-week eclipse season at work either. There was also a semi-square to Uranus from the big dog of the universe: Jupiter. Everything that is ‘big,’ ‘large,’ or ‘excessive’ appeals to Jupiter. Jupiter is the lord of not only opportunity when he is in a “jovial’ mood, but also exaggeration and panic when he is riled. And when in contact with Uranus, nothing is stable and everything is vulnerable to breaking down, or in market terminology, breaking out. In other words, support and/or resistance zones nearby are usually broken, and indeed that happened in several financial and stock markets throughout the world last week.

Bitcoin (and other cryptos) was one of the casualties. It collapsed down to nearly $25,000 on Thursday,  its lowest price since December 2020, and in line with our projections made in our last week’s webinar, where a test of $25,000 was called for (and probably lower before this year is out). The previous week (Thursday, May 5), Bitcoin was trading close to $40,000, so last week’s plunge was big news. Jupiter loved it. Mortals invested in Bitcoin hated it. They panicked, which is the name of the show when Uranus is involved too, and maybe more so with Mercury turning retrograde in Gemini in the midst of the two eclipses. I mean, this was like Dr. Jekyll and Mr. Hyde on a cocktail of steroids and methamphetamines. Drugs, by the way were also in the news last week as a record number of drug overdoses was reported, associated with Jupiter in Pisces over the past year, especially conjunct Neptune last month.

But back to the markets. All U.S. equity markets fell to new cycle lows last Thursday, May 12, one day following Jupiter entering Aries and Mercury turning retrograde and unleashing the genie (i.e., the Trickster) from the bottle. All had strong rallies on Friday, and it was a sudden switch from depression and panic to optimism and willingness to take a risk, from Pisces to Aries. No other major international equity market we track here made new yearly lows. It was only in America, where the White House and Congress are still debating how to “Build Back Better” America. The harder they try, it seems the farther and faster they fall. But there are people to blame for that, which with Gemini highlighted, leaders are quite adroit to exploit.

In Europe, all major indices fell rather hard, but remained well above their lows of March 7. The London FTSE was especially resilient, scoring a big Friday rally after their government signed a treaty with a promise to defend both Finland and Sweden in case of an attack.

In Asia and Australia, large declines ended on Thursday and held above their lows of January-March. China was interesting because it rallied last week following its recent low two weeks earlier. The nation is in lockdown in an attempt to stop the advance of COVID. But maybe they are succeeding in stopping the huge sell off they experienced at the low of April 27, its lowest mark since May 2020. We will talk more about that in this week’s monthly issue of the MMA China Cycles Report (see Announcements).

In other markets, Crude Oil resumed its bull market, closing the week above 110. One month ago, it was trading at 92.93. But precious metals and the Euro currency did not fare well at all. The Euro fell to 1.0340 on Friday, just one tick above its multi-year low of 1.0339 on January 6, 2017. Gold fell briefly below $1800 on Friday, well down from its yearly high and double top to its all-time high of 2078 on March 8. Silver got crushed as well, falling to 20.42 on Friday, its lowest price since July 2020, and again in line with our discussions in last week’s special Spring Webinar on Financial Markets. If you weren’t there, it would be advised to get a recording of that event. It is still highly relevant.

Short-Term geocosmics and longer-term thoughts  

The bad news is that in April, for the second month, inflation clocked in above 8%. The good news is that sometime in the next 12 months, it will likely fall to around half that. Only twice since the late 1940’s has inflation risen as much as in the past year, and both were periods like the present, when supply shocks hit a hot economy.– Greg Ip, “Inflation is Headed Lower – But How Low?” May 13, 2022.

“…tax revenue is booming. Federal receipts through April rose an astonishing $843 billion from a year earlier, to nearly $3 trillion… thanks to economic growth and inflation that boosts nominal incomes. The feds are getting more than their “fair” share. All of this adds up to boom times in the Beltway, but Mr. Biden still wants a record tax increase. Isn’t a 39% raise enough? Wall Street Journal Opinion Page, “Why the Budget Deficit is Falling,” May 13, 2022. 

Mercury retrograde, the Trickster, will be with us until June 3. Whatever we say – whatever anyone says – is subject to revision and modification until then. So, let’s just skip ahead and look at a very serious cosmic gathering that will take place September 21-28, with the awareness that such an important meeting will need up to two months to manifest fully. This is when Saturn will return to within less than one degree (less than 40’of one degree) of an exact square to Uranus. But that is not the entire picture being painted on the heavenly canvas. Jupiter will be midway between these two powerhouses, i.e., the midpoint. And, in a semi-square to each, with Jupiter in the combative (or pioneering and original) sign of Aries. This suggests something “big” again (remember: Jupiter likes things “big”). And it is with Uranus, which likes things on the chaotic side and very loud. And it is also with Saturn, which is structure. It’s like a “big bang,” maybe a breakthrough for science and astronomy (we had such a revelation this week with the first black hole image from the center of the Milky Way galaxy).

Even now, in the past week, we see Jupiter making its first of three semi-squares to Uranus (May 10-11, September 28, and December 13, and allowing 10 days on either side for a “manifestation”). We are seeing how this aspect correlates to huge price movements (down in this case) to world equity markets. But it can be just the opposite, too, for in 2021 when Saturn squared Uranus three times, global stock markets made new all-time or multi-year highs. In this case, we need to be prepared for either: a crash or a huge rally to new multi-year highs, and then another reversal.

We know what would cause a stock market crash at that time. It would probably be something in the economy, an economic report that shows the economy in a recession. Or a disturbance and change caused by the mid-term election. But what would cause a huge stock market rally? With Jupiter in Aries, it might be the end to the Russian/Ukraine war, with a Ukraine victory. If that happened, can you imagine how investors would react? Try to, for it is a real possibility. Or on the hand, if Russia prevailed and Ukraine was overtaken, could you imagine what would happen to world equity markets?

I don’t know which result will prevail. But given my knowledge of cycles and the belief that we are near an intermediate-term cycle low of importance in stocks, which would be followed by a sharp 2-6 month rally (or more), I have an opinion (don’t we all). With Biden’s popularity so dismal and everyone predicting a mid-term Republican landslide, and with Biden being under Neptune transiting in a grand trine (favorable) to his natal Venus and Jupiter, a signature of extreme “luck,” it is perhaps the one “good thing” (i.e., a stroke of luck) that could rescue the midterm elections for his party (and the fate of his son). He needs a Ukrainian victory more than he needs a tax increase. To me, it’s no wonder he is suddenly in favor of loosening the purse strings of support for Ukraine. His legacy depends upon victory (so does Putin’s), and maybe so does the survival of the entire world. But I am not sure which is more important to a politician.