Weekly Column: A gravity-defying behavior

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Employers adding a measly 266,000 new jobs – sharply missing Wall Street’s expectations – amid a growing shortage of available workers. The unemployment rate unexpectedly rose to 6.1% — while it’s still well below the April 2020 peak of 14.7%, it’s about twice the pre-crisis level, the Labor Department said in its monthly payroll report, released Friday morning. Economists surveyed by Refinitiv expected the report to show that unemployment fell to 5.8% and the economy added 978,000 jobs. – Kristen Altus, “US Labor Secretary on Why Americans Aren’t Going Back to Work,” www.foxbusiness.com/, May 7, 2021.

In any event, a pullback in world equities didn’t start last week, the first week of May– the first week of the month that investors love to chant, “Sell in May and go away.” The only problem is that “selling in May and going away” for more than a month hasn’t worked since 2015. It used to be that you could sell in May and return in October and not miss much. But that hasn’t been the case for several years now. Maybe it will return this year because we have an intermediate-term market cycle that is due, which we will discuss at length in the monthly MMA Cycles Report that comes out this week, and the “Mid-Year Market Review” webinar that will take place May 22 (see “Announcements” below).

Instead, global stock indices were up last week, with several (but not all) reaching new all-time or new multi-year highs. It’s this kind of gravity-defying behavior that inspires many new investors and traders to jump on board now with romantic thoughts (Neptune is still in Pisces) of becoming instantly wealthy. In modern day lingo, it’s FOMO time – Fear of Missing Out. Between FOMO and FAANG (Facebook, Amazon, Apple, Netflix, and Google), one could easily suffer from a deadly KISS (Keeping It Simple Stupid) mentality. Navigating market investing or trading is anything but simple. Exciting, yes. But deadly pursuits can be exciting, until they become tragic. Ask any number of the recent GameStop victims.

Last week witnessed new all-time highs in several world equity markets, including the Dow Jones Industrial Average (DJIA), S&P, the Netherlands AEX, and the Australian ASX. Almost all world indices rallied, other than China’s Shanghai Composite.

Gold and Silver had excellent weeks. Gold soared to 1844.60 on Friday, its highest price since mid-February. Similarly, Silver tested 28.00 on Friday for the first time since late February. But once again, the star performers were the grain markets. Corn, Wheat, and Soybeans all continued rallies to new multi-year highs, and in the case of Corn and Soybeans, they are nearing their all-time highs. Currencies were also strong last week as the Euro rallied to its highest level since February, while the U.S. Dollar fell to its lowest mark since the same time. Bitcoin stayed strong, testing 59,000 last week, still a little off its all-time high of 64,900 on April 14. But Ethereum, another popular cryptocurrency, surpassed 3600 on Friday for the first time.

Geocosmics and longer-term thoughts

Treasury Secretary Janet Yellen conceded Tuesday that interest rates may have to rise to keep a lid on the burgeoning growth of the U.S. economy brought on in part by trillions of dollars in government stimulus spending.– Jeff Cox, “Treasury Secretary Yellen Says Rates May Have to Rise Somewhat to Keep Economy from Overheating,” www.cnbc.com, May 4, 2021.

Rising asset prices in the stock market and elsewhere are posing increasing threats to the financial system, the Federal Reserve warned in a report Thursday.– Jeff Cox, “Fed Warns About Potential for ‘Significant Declines’ in Asset Prices as Valuations Climb,” www.cnbc.com, May 6, 2021.

No one can say they weren’t warned. Now, both Treasury Secretary Janet Yellen and members of the Fed floated comments that rates may rise, and assets may soon have a significant decline. That’s how it starts – with the central bank or a member of the administration dropping the idea as “just a possibility.” It’s coming, and everyone is now forewarned. But with Friday’s unexpectedly weak jobs report, maybe that rate increase idea will be stalled for at least another month. Jupiter moving into Pisces this week would support that view. As it moves into Pisces, it will form a trine to Pluto, and a sextile to the Sun, in the founding chart of the Federal Reserve Board (December 23, 1913). These are considered “soft,” or harmonious aspects, and when Jupiter is involved, the Fed tends to be accommodative, not restrictive.

In the study of astrology, we call the movement of a planet from one sign to the next an “ingress.” Jupiter will ingress from Aquarius to Pisces this week, May 13-July 28. Ingresses correspond to a change of collective psychology regarding the principles of that planet and the signs involved. Jupiter’s main principle is one of exaggeration, expansion, growth, and optimism. Aquarius is the sign of humanitarianism, space, technology, and innovation. In Aquarius, Jupiter provides a large, optimistic, and exciting vision about the future of humanity, especially as it involves technology or outer space.

The sign of Pisces is also imaginative, but more emotional and intuitive (some might even say spiritual) than inventive or intellectual. As a water sign, and thus pertaining to emotions, the ingress of Jupiter implies a more emotionally-driven collective psychology. It covers the whole spectrum from “irrational exuberance” to hysteria and panic.

Intermediate and long-term market cycles tend to form when Jupiter is in mutable signs. Pisces is one of the four mutable signs, and probably the most prone to market reversals of all the changeable, mutable signs. This is especially true with equities, metals (more Silver than Gold) and Crude Oil. If a financial market is making a new multi-month high then, it usually stops and reverses sharply down. If instead a market is falling hard to a multi-month low, it can qualify as a long- or intermediate-term cycle trough and then reverse upwards.

It is possible to see both types of cycles (crest and trough) unfold in this period, especially as Saturn will also make its second passage in its waning square aspect to Uranus on June 14. Very sharp but possibly short-lasting price changes tend to happen then. Remember: the first passage of February 17, 2021, coincided with the multi-year highs in several world stock indices, especially in Asia. The next passage might be equally as important. 

Danger and Opportunity. That’s the nature of Saturn and Uranus combined with Jupiter in Pisces. We remain vigilant for the Saturn/Uranus square to possibly manifest as a stock market crash. It has done so in every alternate instance of its 45-year cycle (1930-31, 1839-40). So far, however, stocks keep rising to new heights and investors experience the conflict between staying in and continuing to register gains, or exiting for fear that at some point, soon, the valuations will just be too high to sustain further rallies and markets will fall hard, causing enormous financial pain if they don’t lock in profits while they can.

It’s the oldest market conflict of all: greed versus fear, Jupiter versus Saturn. And until this week, May 13, they have been in the same sign, Aquarius, since the winter solstice of December 21, 2020. This has been a very bullish period. Now Jupiter will ingress into Pisces, a mutable sign, May 13-July 28. Here is where markets likely experience greater extremes. With mutable signs, the highs and lows are often exaggerated, both in terms of market prices and the psychological mood of the collective.

Everyone will have the opportunity to enjoy life to a greater degree these next few weeks. This can be a party aspect, a love fest, and one of renewed joy socializing with others after such a long period of stress and isolation. It can also be a time of heightened romantic impulses. However, remember what happens if you party too hard, take too great of risks, and don’t apply measures of self-discipline. Hangovers and losses can follow. This is also the meaning of Jupiter in Pisces at the same time Saturn squares Uranus.