Weekly column: Can be bullish for global stock markets

Review and preview 

The U.S. economy saw solid job growth in April, suggesting the labor market is still strong despite headwinds from rising interest rates, soaring inflation, a worsening labor shortage and fears of a slowdown. Employers added 428,000 jobs in April, the Labor Department said in its monthly payroll report released Friday, beating the 391,000 jobs forecast by Refinitiv economists. It marked the 12^th consecutive month that job gains topped 400,000. The unemployment rate, meanwhile, held steady at 3.6%, the lowest level since February 2020. – Megan Henney, “US Economy Sees Healthy Job Growth in April as Payrolls Jump by 428,000,” www.foxbusiness.com, May 6, 2022. 

It was the return of the taper tantrum last week as the next act of this Dr. Jekyll and Mr. Hyde stock market drama got underway. Is it going to finally slay the bull? Or will the bear finally go into hibernation and let the stock market come back to life. Last week it seemed to vacillate between both possibilities as the plot thickens, or sickens, depending on who you are rooting for.

The week began with fears that the Fed might raise rates by ¾ points. This led to a huge Monday sell off. On Wednesday, the Fed announced the mostly expected rise of “only” a ½-point and the market had a bout of irrational exuberance, with the DJIA rising over 900 points in its biggest daily rally since October 2020. But all that was completely forfeited the next day as the Jekyll-Hyde taper tantrum resumed with the market down over 1000 points. In fact, three days last week witnessed price ranges exceeding 1000 points. It was every bit as wild and crazy as the cosmos suggested with the Moon in Gemini, Monday-Wednesday, and then the powerful conjunction of Sun and Uranus on Thursday. This was covered all week on our several Twitter posts starting last Monday, May 2 through Thursday, May 5. Last week’s planetary lineup was a symbol of chaos, an emotional earthquake. The ground was not solid. Nor was any ceiling of resistance. Whatever appeared to be a boundary was broken and the result wasn’t just a case of Neptunian confusion, but rather Uranus mayhem. It wasn’t just in the U.S. either. It was global.

In Asia and the Pacific Rim, the Australian ASX and India Nifty indices continued their steepest declines since the important lows of January-February. For those who study chart patterns, those early year lows represent the head of an inverse head and shoulders pattern in many indices like the NIFTY and the SMI of Switzerland. In China, Hong Kong, and Japan, the recent lows of April 27 held up in last week’s shortened trading.

In Europe, the decline of last week remained well above the recent lows of March 7-8, so this recent pullback is still just a corrective decline.

However, in the U.S., it was a very different and more worrisome stock market performance. Both the NASDAQ and S&P took out their lows of January-March.  For the S&P, it was its lowest mark since May 19, 2021. The NASDAQ plunged to its lowest level since November 24, 2020. They look ominous. But the DJIA continued to hold above its low of February 24, the day of the Russian attack on Ukraine. As long as that low holds, we have a case of intermarket bullish divergence.

In other markets, Bitcoin and Ethereum followed the path of global stock indices, which was basically lower into Friday. Bitcoin tested 35,000 and Ethereum 2700. But so far, each continues to hold above their lows of January and February. Gold and Silver continued their descent as well. Gold fell below 1850 intraweek, and Silver tested 22.00. Only two months ago, Gold was testing its all-time high at 2078 and Silver was around 27.50. Lately, all that glitters is not Gold. On the other hand, Crude Oil was strong, rising above 111 during the day on Thursday.

The bottom line is that we have a lot to talk about on Sunday’s special annual Spring Webinar on financial markets (see Announcements below).

Short-term geocosmics and longer-term thoughts  

Clarity is not apt to suddenly make an appearance this week. We now have to contend with the return of the cosmic trickster, Mercury retrograde, beginning May 10 and lasting through June 3. What a fine time for the White House to serve up this bright idea of creating a new “Ministry of Truth” with a new “Disinformation Board.” It is a nice thought. But who will determine the Truth? Who will decide upon what constitutes “disinformation?” Doesn’t Google, MSNBC, and Fox already do this? Right now the debate is whether to name it the Board of “Disinformation” or “Misinformation.” The Trickster is going to have a lot of fun with this one.

The Trickster might also enjoy playing in the current market production of Dr. Jekyll and Mr. Hyde. When Mercury is retrograde, many financial markets will start out one way and then suddenly reverse every 1-4 days. At each interval, it tends to give a buy or sell signal that is almost immediately negated, in what we call fake-outs, just like last week’s behavior under Mercury’s higher (and more volatile) octave of Uranus. If trading is an art, this is when the abstract becomes the trend.

May 10-11 also begins the first phase of Jupiter’s entrance into Aries, which will last for five months (until October 27-28) before briefly returning back to Pisces until the end of the year, then back again into Aries until May 2023. On the one hand, Aries is the sign associated with Mars, the god of war. Aggressors are prone to act out with bolder initiatives, especially when Mars joins up with Jupiter (god of abundance and exaggeration) in Aries on May 29. However, for stock markets of the world, this may also indicate a more aggressive period for investors who will be looking for something to get more aggressive about. I think of Jupiter in Aries as bold and adventurous, which could be good for equities. Looking back in history, wars are not always bad for equity markets after an initial plunge. They are just bad for people who desire peace, which is basically most of those who inhabit this planet.

Nevertheless, Mars and Jupiter together in Aries is apt to be a “muscular” time, when those garnering the most attention will be those who act out the most aggressively and perhaps most outrageously in their accusation of others they proclaim to be ‘too weak to lead.” This will be just in time for the 2022 midterm elections. It might be entertaining. More than likely, it will be obnoxious and embarrassing as the era of extremism and excess has its final hurrah. A Department of Disinformation or Misinformation will be overwhelmed if it gets off the ground during this period. Nothing is factual or provable. Everything may seem libelous, insulting, or offensive, especially to those who are serious. This is a time to not take things so seriously, but that is difficult to muster when lives are at risk.

However, Jupiter in Aries also has its benefits. It wants its freedom, and it will seek fun and be engaged in more activities. It won’t stand still and let life pass by. It may be very competitive, but that may only lead to superhuman feats. Many records in athletic events may be broken. Many new frontiers may open up in space and education. It may seem like we are entering a new era of thought and activity. Fear may give way to greater bravado and confidence. People will feel like taking more risks, opening up new avenues for trade and business activity, and I think that can be bullish for global stock markets.