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Week Beginning April 5, 2010

Raymond Merriman Please note that due to travel all day next Friday, there will be no weekly column. We will resume April 16.

Review and Preview

Once again equities around the world continued to surge in last week’s pre-holiday market. In Europe, the AEX of Netherlands, DAX of Germany, and FTSE of London all soared to new yearly highs. The Swiss SMI market did not, but it remains near its yearly high of 6943 recorded on March 19. New yearly highs were also posted on the Moscow MICEX index.

In the Pacific Rim and Asia, both Japan’s Nikkei and India’s NIFTY indices made new yearly highs last week. However, in spite of decent rallies, neither the All Ordinaries of Australia nor the Hang Seng index of Hong Kong made new highs.

In the Americas, signs of divergence also remained evident. The Bovespa index of Brazil made a new yearly high, but the Merval index of Argentina did not. The Dow Jones Industrial Average in the Untied States made a new yearly high (barely, on Friday), but the NASDAQ Composite did not. However, the Composite closed last week above 2400, not far from its yearly high of 2432 on March 25, when the Sun’s translation to the Saturn-Uranus-Pluto T-square ended.

Last week also witnessed impressive rallies in Crude Oil and the precious metals (Gold and Silver). Crude Oil made a new yearly high, rising above 85.00/barrel for the first time since October 2008. The Euro currency also rallied last week against the U.S. Dollar, but the Japanese Yen did not. All in all, it was a week that looked good for most markets. But still, several markets are lagging behind the headlines of the roaring bull market witnessed in some of the major industrial nations of the world. Will they catch up? Or is this going to become a case of intermarket bearish divergence, leading to a sizable sell-off?

Short-Term Geocosmics

There is geocosmic support for this bull market continuing. As stated last week, “Normally one would expect stocks to be bullish with Venus moving into Taurus March 31-April 25.” But it is not only Venus that is transiting through its ruling sign these days. So is Jupiter, which is in Pisces from January 18 through June 6. These two “benefics” could support optimism about stocks for much of April. Additionally, the New York Stock Exchange is a Taurus-born entity, as it was founded May 17, 1792. Venus in its ruling sign and also the sun-sign of the NYSE is supportive of U.S. equity prices from the viewpoint of Financial Astrology, which is the focus of this weekly column.

Yet, in spite of the bullish geocosmics mentioned above, the stock market continues to be technically overbought. And there are three geocosmic signatures unfolding this week that could coincide with a reversal. On Saturday, April 3, Venus will form a waning square to Mars. On Sunday, April 4, Venus will be a waxing trine aspect to Pluto. And on Tuesday, April 6, Pluto will turn retrograde. It is thus a Venus-Pluto type of week (strength in the economy, growth in debt). Neither of these is a Level One type of signature, which is the most powerful ranking of geocosmic signatures correlating with reversals in financial markets. But anytime you have three signatures occurring in such a short amount of time, there is the possibility of a change of trend, at least short-term. The far more potent time band of geocosmic signatures correlating with a market reversal doesn’t transpire until April 18-26.

There is one other geocosmic event this week that could be of interest longer-term. The retrograde of Saturn will move back into Virgo on April 7, where it will remain until July 21. Saturn in Virgo tends to be bullish for precious metals, especially Gold, although there is too little history to claim it is statistically relevant. You may also remember that when Saturn first crossed the Autumnal equinox point of Virgo-Libra on October 29, the U.S. stock market made a top October 19-23, then fell somewhat hard for 10 days to bottom on November 2. Then it rallied smartly into Saturn turning retrograde in mid-January. Saturn will turn direct on May 30. We should be very alert around both of these periods: the few days surrounding April 7 when Saturn crosses the Virgo-Libra point, and May 30 when Saturn reverses its direction.

Longer-Term Thoughts

There are longer-term geocosmic signatures unfolding in the heavens that may have more to do with the recent run up in world equity prices than those just mentioned. It is because of these longer-term signatures, combined with knowledge of technical studies, that our weekly subscription reports have remained long the U.S. and Japanese stock markets throughout this powerful rally over the past several weeks, even though we continue to look for reversals based on other geocosmic signatures.

This points out once again the importance of not relying solely on geocosmic signatures, or this free weekly column, to make trading and investment decisions. The purpose of this column is only to discuss and outline the geocosmic climate for the week. In order to trade successfully, you need to integrate financial astrology with studies in technical and cyclical analysis, and even pattern recognition studies. Thus, even though there has been a couple of geocosmic time bands suggesting a market reversal since early February, the technical picture has kept our position successfully on the long side. This does not mean the geocosmics do not work, for indeed they do – far better and far more consistently than any other market timing studies, in my opinion. But geocosmic signatures of reversals don’t always apply to the stock market (they can manifest in other financial markets). And oftentimes they apply instead to political events. The powerful and hard aspects of March did not lead to any substantial reversal from the bull market in stocks. But they did lead to reversals in currencies, precious metals, crude oil, and grain markets, right on time. They also coincided with the passage of the U.S. Health Care Reform bill, an historic reversal of governmental and social policy in the United States.

Yet all of this is leading up to the powerful “Cardinal Climax,” which peaks June-September 2010, and again in early 2011. In terms of market behavior, Jupiter and Uranus will be entering Aries very close in time to one another, in late May through early June. Each of these planets, and the sign of Aries, represent speculation. In fact, the more appropriate interpretation would be “excessive speculation,” leading to asset bubbles in such things as stocks and commodities. I believe we are now seeing this start to unfold. Just look at a chart of some of these stock indices, such as the Japanese Nikkei and Dow Jones Industrial Average, since the low in early February. They are not just rising gradually. They are starting to rise in a parabolic fashion, which is a characteristic of financial bubbles.

All of this was described in great detail in the “Forecast for 2010” book. It appears to be now underway, and it will draw an unprecedented transference of monies from bank savings accounts into the stock market, as savers attempt to capitalize on this asset bubble. But the problem will be this: savers are not speculators, and this is a cosmic climate of speculation. When the market turns, so will the professional speculators, but the savers will not be prepared for this. Speculators will make outrageous profits, and the savers-who-try-to-be speculators will get wiped out. And then the government will punish the speculators and come to the rescue of the poor savers who lost their life earnings trying to play a game they do not understand, one in which they do not have the psychological make-up to deal with. This could then become the justification of a government, drunk on uncontrollable spending and going bankrupt, to impose a new slew of government regulations, fines, taxes, and punitive measures upon the evil villains of the financial industry. All of this would be consistent with the waning phase of the Saturn-Pluto cycle, which lasts until the end of this decade.

Once again, it doesn’t have to be this way. But when you have a central bank policy of almost zero interest rates, combined with uncontrollable government spending leading to a parabolic rise in federal debt, you set into motion inflationary forces that will be very hard to stop once they get off the ground. In his testimony before Congress last month, Fed Chairman addressed this situation. According to the Wall Street Journal (February 26), the U.S. economy “… could change quickly without a credible plan from lawmakers to bring projected government spending in line with tax revenues.” And it is not a matter of raising taxes that will do that (because they won’t), but rather getting people back to work, back onto payrolls, so they contribute to the tax revenues.


© Raymond A. Merriman


Disclaimer and statement of purpose: The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language. This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world. It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.

No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.