Weekly column: Market reversal echoes 2018 under astrological alignments

Review

A measure of wholesale prices rose more than expected in November as questions percolated over whether progress in bringing down inflation has slowed…. The producer price index, or PPI, which measures what producers get for their products at the final-demand stage, increased 0.4% for the month, higher than the Dow Jones consensus estimate for 0.2%. On an annual basis, PPI rose 3%, the biggest advance since February 2023.

—Jeff Cox, “Wholesale Prices Rose 0.4% in November, More than Expected,” www.cnbc.com, December 12, 2024.

European markets closed lower Friday as investors reacted to disappointing data prints from two of the region’s largest economies. The pan-European Stoxx 600 provisionally closed 0.62% lower, also recording a weekly loss after three weeks in the green. Friday’s downbeat mood followed unexpected declines in both U.K. GDP and key export data from Germany. The U.K. economy contracted by an estimated 0.1% on a monthly basis, the ONS said Friday.

—Karen Gilchrist, “Europe Stocks Close Lower, Snap Three-Week Winning Streak; UK and German Data Disappoints,” www.cnbc.com, December 13, 2024.

The Trickster was in full force last week, which ended on the superstitious Friday the 13th. Joining it was Mars turning retrograde last weekend, creating an especially combustible combination for financial markets.

Many of the world’s stock indices made all-time highs either last week or the prior week, within three trading days of our December 6-9 geocosmic critical reversal date (CRD) zone, which included the powerful Sun/Jupiter opposition on December 7 as well as retrograde Mercury and Mars. However, there was great intermarket bearish divergence in many regions as some indices made new all-time highs (ATH) slightly before the December 6-9 weekend, and others made it slightly afterward. This was the case in the U.S., where the DJIA and S&P made their ATH on December 4 and 6, while the NASDAQ peaked on Friday, December 13.

Bearish divergence was also evident in Europe, where the German DAX soared to another new ATH on Friday, December 13, but that was not the case with other indices in the region. In Asia and the Pacific Rim, it was just volatile as several indices made rolling weekly highs by mid-week, and most sold off by the end of the week.

Gold and Silver were also affected by the sudden retrograde reversal phenomenon. Both made nice recovery highs on Thursday, with Gold jumping to 2761 and Silver to 33.33. By Friday, each had plummeted sharply to 2663 and 30.75, respectively. Cryptocurrencies also made highs the prior week and secondary but lower highs last week, which is a short-term bearish pattern until both make new yearly highs now. Crude Oil was one bright spot last week, rising from allow of 66.98 right on the December 6 CRD and then rallying to a weekly high of 71.42 on Friday.

Short-term geocosmics

It seems we stood and talked like this before,

We looked at each other in the same way then,

But I can’t remember where or when…

 The clothes you were wearing, you were wearing then,

The smile you are smiling, you were smiling then,

But I can’t remember where or when…

 Some things that happen for the first time,

Seem to be happening again,

And so it seems that we have met before,

And laughed before,

And loved before,

But who knows where or when?

—Rogers and Hammerstein (and Lorenz Hart), “Where or When,” Chappell & Co, 1937

Perhaps the most awaited geocosmic signature unfolding this week by many traders will be the end of the Mercury retrograde cycle. On Sunday, December 15, Mercury turns direct, which means market signals are likely to return to more normal patterns—no more fake-outs and false breaks of support and resistance, or so the theory goes. However, it may not work out quite that way this time because Mars has just started its retrograde cycle, December 7-February 23. More havoc than the Trickster can be on display when the god of war and passion makes a U-turn in the heavens.

There are three retrogrades that can be particularly challenging for position traders to navigate: Mercury, Venus, and Mars. These periods can be rewarding for aggressive traders who are nimble and prepared. Each tends to suddenly disrupt trends and complicate longer-term outlooks, although, in the case of Mercury, it usually has more to do with shorter-term outlooks.

Last week, we had both Mercury and Mars retrograde and the sudden reversals were intense, especially in metals, as the outlook for inflation is starting to return. This would mean less easing policies by the Federal Reserve. This will complicate the Fed’s job of safeguarding against both the prospect of higher inflation and its often direct relationship to eventual rising unemployment numbers, which then can turn the outlook of a strong economy into one of recessionary fears. Until last week, most economists were very optimistic about the future of the U.S. economy. Very few are looking for a recession in 2025, which by itself is often a forewarning, known as a “contrary market sentiment” indicator. That consensus could soon be changing under the weight of the uncertainty that comes with the retrograde factors.

There is more to the cosmic storyline of this outlook. We are also headed into the second of three Jupiter/Saturn waxing squares on December 24. The first was August 19, right between the two yearly highs in the Treasury market of August 5 (Mercury retrograde) and September 17. Over the following two months, Treasuries collapsed in their steepest decline of the year. The Dollar also bottomed (and other foreign currencies began to fall) near the same period as that first passage. For the record, Soybeans made their yearly low then, too, but that doesn’t tie into the overall economy as much. However, it might be in 2025 and especially 2026 if a drought occurs, which, according to studies by MMA Grains Analyst Wyatt Fellows, often happens under hard aspects between Saturn and Neptune (see the new Forecast 2025 Book). In 2026, Jupiter will transit through the fire sign of Leo, which increases the odds for a drought that year over 2025 when Jupiter is in the water sign of Cancer during the growing season.

The point here (and yes, I do have a point to make) is that Jupiter and Saturn, in hard aspect, indicate the return of worries about the future of the economy. When traders worry about that, they often pause purchases, and if the worries persist, they start to sell. The first passage in mid-August did that. Now it seems we are headed into another bout of increasing (Jupiter) worries (Saturn) as we round the bend to the end of this year.

I have a disturbing thought that this could be 2018 all over again. Usually, Sagittarius is a season for optimism in global stock markets. However, in 2018, the stock market made a new all-time high in the first week of December, and then by December 26, the DJIA had lost 16%. Yes, it was that fast, and everyone was caught off-guard. With Mars turning retrograde in the first week of December as U.S. stock indices made new all-time highs, and with Jupiter square Saturn looming ahead on December 24, I wonder if this might be Deja vu all over again.

I also remember our outlook at the beginning of 2024 when we expected all-time highs in stocks (as well as Gold and Bitcoin) going into Jupiter square Saturn (after Jupiter conjunct Uranus), followed by a 4-year cycle low before the final passage ends in mid-2025. That 4-year cycle in stocks has been altered due to a different sequence of cycle patterns pointing to a 3-year cycle low (half-cycle to the 6-year cycle), but it is still due in 2025. But hey! I don’t want to be the Scrooge of this holiday season. So, I would also like to point out that the December selloff into the holiday season in 2018 turned out to be a tremendous buying opportunity for stocks.

It could turn out that way again. So, we can still be optimistic and see a selloff here as an unusual buying opportunity if it unfolds. That would be typical of Mars retrograde headed into Jupiter (in volatile Gemini) square Saturn. Then we have Venus retrograde to look forward to starting March 1. There is no let up for market whiplashes into the middle of 2025. Good for short-term traders. It’s not so good for those encumbered with an abundance of planets in fixed signs who just want to buy and hold.