Mars turns retrograde

Despite the Fed's promise of continued low (or no) interest rates for the foreseeable future, the market failed to mount a meaningful rally. Investors appear to be growing uneasy with the yin of a continued weak economy and high employment and the yang of a rising Dollar and the end to the carry trade . Stocks were largely unchanged for the week with the Dow closing at 10,328 and the S&P at 1102. Mumbai fared somewhat worse as inflation fears forced the markets south with the Sensex closing at 16,719 and the Nifty finishing at 4987. I thought we might see more upside on the early week Sun-Jupiter aspect but we saw only modest gains in New York on Monday. As expected, the market turned more negative as the week progressed. Friday brought a small gain in New York which was not too surprising given the fairly close Venus-Jupiter aspect that I noted last week.

With the conjunction of Jupiter and Neptune on Monday December 21, the planets may be indicating an important pivot point in the market here. The hope embodied in the Jupiter-Neptune conjunction has underwritten much of the stock rally of 2009. As the conjunction comes exact this week, we are confronted with the very real possibility that the celestial source code for optimism may becoming more scarce. The UN climate conference in Copenhagen was perhaps a reflection of this hopeful idealism and yet it has been heavily criticized for lacking any specifics. For all the good intentions provided by Jupiter and Neptune, the whole conference may have been more of an exercise in public relations. One wonders if the stock rally could fall prey to the same lack of follow up and practical considerations as the limits of Jupiter and Neptune are revealed by the unforgiving light of day.

Besides Jupiter-Neptune, Mars turns retrograde on Sunday, December 20. This is another potentially malefic influence that could make it more difficult to sustain current levels. Thomas Reider's statistical study of Mars retrograde periods found they significantly correlate with major market declines of more than 10%. This is not a perfect correlation but one that nonetheless merits attention. Reider also found that declines were more likely to occur when Mars was in hard aspect to two outer planets, where one aspect is a conjunction. This isn't the case here, but we do note that Mars is in a hard semi-square (45 degrees) Saturn while Saturn is squaring Pluto. Venus makes a sextile aspect with Jupiter-Neptune on Monday so there's a possibility for gains in the early going, but exact aspects between benefics can just as much spark sell-offs upon their perfection. The other significant aspect occurs Thursday when Sun is conjunct Pluto. While we will see light trading volumes ahead of the Christmas holiday, this pattern seems to be difficult, especially for gold.