Friday, October 26, 2007

Stock market Comments for the Week Beginning October 29, 2007

Review and Preview

Written by Raymond Merriman

In typical Mercury retrograde fashion, equity markets around the world gave mixed messages last week. Some were down hard early last week and then recovered. Some were down hard Monday, made another plunge Wednesday and Thursday, and then recovered. Still others were strong all week and closed at new all-time highs. But Financial Astrologers – as well as traders – will be equally challenged in the weeks to come, because we about to enter yet another large time band in which an abundance of geocosmic signatures unfold close in time to one another. This promises to be yet another important turning point in both the world of financial markets as well as in geopolitical developments.

Following the all-time and multi-year highs of October 11, (right on our last three-star critical reversal date), most equity markets of the world continued their sharp sell-off into Monday, October 22. Cyclical lows on that day were noted in all the European and American markets, plus the Asian and Pacific Rim markets with the exception of the Japanese Nikkei stock index, which continued lower into Thursday, October 25. Many of these markets made a secondary low on Wednesday or Thursday, before turning up sharply to end the week higher. This fits well with last week’s comments, stating, “Perhaps we can relieve some of this concern by reminding readers that Mercury is retrograde, October 11 through November 1. It is typically a time of mixed messages from political leaders an economic data and it oftentimes results in such large price swings and fake outs, especially right around the 9th calendar day and 9th trading day, which is this weekend through the middle of next week. We also note that the all-time highs of the stock market occurred with the new moon in Libra. When the lunation in Libra coincides with a high, stock prices can fall sharply into the full moon two weeks later. The full moon occurs this Friday, October 26.” The lows of all world markets were in by Thursday, October 25, which was right between the 9th calendar day of Mercury retrograde and the full moon.

In other markets, Crude Oil and the Euro currency continued their torrid advance to new all-time highs. Gold also advanced strongly to its highest levels since the all-time highs of January 1980. There seems to be no end in sight to these “blow-offs.” But soon Mars will turn retrograde, so those in Europe looking to take advantage of the big spread between the Euro currency and the Dollar should consider locking in prices soon. It will be like getting a big discount on U.S. goods – like the annual Forecast Book or any MMA newsletters (OK, I am biased, but you get the idea). But, it does seem like the U.S. and its goods are now for sale. Yet the 26-month cycle low in these currencies is coming up soon, and with it I suspect a 10% rally in the Dollar, within four months of this coming January. The reversal could start at any time, and Mars turning retrograde (November 14, +/- 2 weeks) is a good place to look for that to start.

Short-Term Geocosmics

Financial astrologers will be focusing their attention on several planetary changes of directions in the next few weeks. The astrology of the stock and financial markets is apt to be explosive not only as a result of all these planetary changes of direction, but also because they form so many hard mathematical aspects to one another between October 25 and November 30. There are no more than 6 calendar days separating any two consecutive geocosmic signatures during this period, making it an extremely vulnerable period to unexpected market swings.

But the retrograde and direct shifting of planets is indicative of surprises in mundane events as well as economic data reports. For instance, in this coming week, Neptune turns direct on Wednesday (October 31) and Mercury follows with the same pattern the next day, November 1. That means a Mercury-Neptune theme will be strong in the world for a few days surrounding these days. Since Mercury relates to mental processes and the disbursement of information (like news), and Neptune’s nature is to hide, retreat, or camouflage, we might anticipate a lot if misinformation to be released. It can be a very confusing time for investors. It is interesting that the FED will make an interest rate announcement around this time. This is a period that highlights rumors, where the intention behind these rumors (or misinformation) is not clear. In fact, the intention may be to intentionally distort or deceive, in order to hide another agenda or reality altogether. Neptune also rules oil, gases, chemicals, pharmaceuticals, and fluids of all kinds. It can correspond to changes in the crude oil market, oil spills, floods, or the advent of new viruses and diseases requiring new forms of treatment. Or possibly there is a problem with an existing form of treatment that is hushed.

But the big geocosmic event coming up is Mars retrograde on November 14, which just happens to be right near the middle of this geocosmic cluster. Not only that, but it occurs at 12 degrees of Cancer, right near the natal Sun of George W. Bush and the United States. Mars, as long-time readers know, is the planet of war and aggression. But when it is activated near a retrograde phase, it can lead to serious and unexpected problems for the aggressor. It is usually a very critical error in judgment to initiate aggressive and/or military activities around this time. And yet the ‘urge” to do so is great, for certain parties feel their warnings have been ignored, and thus frustration can grow to untenable levels, leading to ill-advised and even regrettable actions. Such developments could turn financial markets right around.

Longer-Term Thoughts

Speaking of Mars retrograde themes, we note the headlines in Friday’s “Wall Street Journal,” stating “The White House imposed sweeping new sanctions against Iran.” The article goes on to state, “The moves are aimed at inducing change in Iran, but they raise concerns the administration is laying the groundwork for military action….” And in response to this decision Russian President (Putin) said, “I think running around like a lunatic – with a razor and waving a red banner – isn’t the best way to solve this kind of problem. (Sanctions) worsen the situation, leading it to a dead end.” Does it sound like Mars about to turn retrograde? And does the White House stance that this decision is not a forerunner to military action sound like Mercury and Neptune going stationary this week? Who or what can you believe under these signatures? Nothing. And oftentimes the words will be in direct opposition to the intention.

Which brings us finally to Charlie Rangel, Chairman of the House Ways and Means committee, who just this week released his “Mother of all tax reforms” package. But consistent with Mercury and Neptune changing directions together, what Mr. Rangel is actually proposing is quite possibly the largest tax increase in history, according to Republican critics. On the bright side, the proposal does offer to cut corporate taxes from 35% to 30.5%, which helps make U.S. businesses more competitive in the world. Currently the U.S. “… now finds itself with nearly the highest (corporate tax) rate in the developed world,” according to WSJ. On the other hand, Rangel wants to add a 4% tax surcharge to anyone making more than $200,000/year, raise the capital gains tax to 19.6% from 15%, and initiate higher taxes on small businesses. “Add it all up, and you get new taxes of $1 trillion or more,” according to the WSJ. If the Wall Street editors are reading this right, then the tax package will become the “Mother of all tax increases.”

Yet all of this fits in perfectly well with the history of the Saturn – Pluto cycle, as discussed several times in our past columns. That is, from the conjunction to opposition (1982-2001), federal deficits are reduced as are taxes and interest rates, and the economy and stock markets soar. But from opposition to conjunction (2002-2020), the opposite happens. That is, federal deficits increase, interest rates and taxes go up, and the economy and stock markets stagnate. So far, taxes have not gone up and the stock markets have not stagnated, the one rather positive aspect of the Bush presidency. But all that could change as the third and final passage of the Saturn oppositions to planets beyond its orbit take place in this decade. That will be the Saturn-Uranus opposition of 2008-2010. After that, all the Saturn cycles to planets beyond its orbit will be in their waning phase through 2020. Expect economies and stock markets throughout the world to struggle for a good part of that period. But also expect some fantastic opportunities to be also available to those who are smart investors. Just follow the youth. They lead the way to future opportunities when Saturn and Uranus are in their 45-year opposition aspect, just like they did in the early 1920’s and the mid-1960’s.

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