Weekly column: The Martian Effect fire war and market fluctuations

Review

Job growth was much stronger than expected in December, likely providing the Federal Reserve less incentive to cut interest rates this year. Nonfarm payrolls surged by 256,000 for the month, up from 212,000 in November and above the 155,000 forecast from the Dow Jones consensus. The unemployment rate edged down to 4.1%, one-tenth of a point below expectations. Stocks plunged after the report while Treasury yields soared as traders price in a lower probability of Fed rate cuts this year.

—Jeff Cox, “U.S. Payrolls Grew by 256,000 in December, Much More than Expected,” www.cnbc.com, January 10, 2025.

 The Federal Reserve meeting minutes reflect the rather chaotic swings of view that occur under Fed Chair Powell. After an emergency rate cut without an emergency in September, the Fed has moved to slowing the pace of rate cuts being “appropriate” in December. The basic idea is unchanged—follow inflation down. Concerns were raised about US President-elect Trump’s trade tax and deportation policies in discussions about inflation.

—Dr. Paul Donovan, UBS Chief Economist, UBS Morning Audio Comment, January 9, 2025.

It was another case of “good news on the economy being bad news for the stock market.” Reports of a stronger economy mean central banks will find it difficult to justify their plans to lower interest rates, and the stock market doesn’t like the idea of rising interest rates. Hence, due to the excellent jobs report data, U.S. stock markets fell hard, to their lowest point in two months.

The inflationary implications of the jobs report, however, were very good for Gold, Silver, Crude Oil, and other commodities. Gold soared to 2735 on Friday, which is well above the 2608 level of December 30 and an intermarket bullish divergence signal to Silver, which had fallen to a 3-month low then. We like it when Gold leads Silver from a major or primary cycle low.

Crude Oil also exploded last week, soaring to an intraday high of 77.86, a new 3-month high. This is also not surprising now that Saturn turned direction on November 15 in the middle of Pisces. Pisces rules Crude Oil, and Saturn in the middle of Pisces can indicate the reversal of low prices around that time. Everyone thinks oil prices will come down when Donald Trump takes office and initiates his “drill baby, drill” campaign promise. The idea is that increasing the supply of oil will bring down prices and, hence, also bring down inflation. However, cycle studies indicate that it may not work out quite that way for a while.

Bitcoin fell to 91,262 on Thursday, January 9, a retest of its  December 30 multi-week low. We now know where support is. But can it get back above 100,000 before breaking that new level of support? Under the retrograde chaos discussed in the next section, there will likely be more uncertainty and fake-outs than usual for a few more weeks yet. Just when you think it is safe to take a position, the conditions and the chart patterns change. Knowledge is a wonderful attribute to possess as a trader. Patience and/or the ability to act quickly may be more valuable in a retrograde climate. The “norm” is not the “norm” in a retrograde storm.

Short-term geocosmics and longer-term thoughts

Nothing is predetermined. Human effort can change things. You have agency; you were given a brain for a reason. Whatever you can do, or dream you can, begin it. Boldness has genius, power, and magic in it.

—Johann Wolfgang von Goethe, Faust

“Why are we so good at accumulating more information and power but far less successful at acquiring wisdom?”

—Yuval Noah Harari, Nexus: A Brief History of Information Networks from the Stone Age to AI, Random House, 2024.

On January 12, 2025, Mars will be closest to Earth for its two-year period. https://earthsky.org

It is with great sorrow that we witness the devastating wildfires destroying so many homes, schools, businesses, and lives in southern California this past week. The cost to rebuild will be enormous for both insurance companies and individuals who could not afford (or even get) fire insurance on their homes prior to this outbreak.

In an effort to understand this from the cosmic point of view, let’s begin with the awareness that the study of astrology assigns Mars rulership over fires and heat. Mars has an orbit of nearly two years, and it will reach its closest distance to Earth in that 2-year orbit this week, January 12. Additionally, the Sun and Mars will be in opposition (with the Earth in between the two) on January 15-16.

This is truly a Martian beginning to the New Year. Furthermore, Mars is also retrograde (December 7-February 23), which behaves much like Mercury retrograde in terms of market activity and mundane matters. In fact, we are presently in a retrograde chaos period, where all the personal planets (Mercury, Mars, and Venus) will undergo their retrograde cycles back-to-back between November 25, 2024, and April 12, 2025. This is rare. It indicates a challenging time for investors and position traders as markets can fluctuate wildly in a short time, breaking support and resistance along the way, only to suddenly reverse again in a “fake-out.” Yet it can be very profitable for aggressive traders who are nimble and apply the axiom that all traders must follow: maximum profit potential with minimal market exposure.

So, how is one to approach a period when Mars and personal planetary retrograde cycles are so prominent? It is a time to cultivate strategies, but not to initiate them. It is a time to gather information and begin to make plans, but not the best of times to enact those plans or strategies. With Mars retrograde, the initiator of an aggressive act is usually the loser.

Mars is not only the god of fire, but also the god of war. When retrograde, people are easily offended and “triggered” to react, especially with Mars now in the emotional and protective sign of Cancer. This is not a time to be a bully or to allow oneself to be bullied. There will be several cases of bullies on the loose now, as well as those who are critical in nature, with no solutions to offer for what they perceive to be legitimate complaints. Ignore them. Don’t seek to challenge them.

On the investment side, Mars in Cancer may be bullish for precious metals and other commodities, which tend to rally when bullies are on the loose and given to saber-rattling and pointing out wrongs about you or about life. Rise above it. Don’t react, and try to explain with logic. The markets (and most people) may not be logical right now. They may be more emotional. Don’t trade by logic and with a view to the distant future. Instead, consider trading in 2-8-day increments or swing trades. Leave your core positions alone and perhaps consider writing calls against them for income after sharp rallies during this retrograde chaos.