MMA Weekly Comments

Review and Preview

Last week’s column stated, “In other words, we are entering a grand trine period between Venus, Jupiter and Uranus (July 27-31), immediately as we start the waxing moon phase and end the Mercury retrograde. I think this means there will be a Middle East truce and cease fire. In reaction, the equity markets may stage another decent rally.” Well, we didn’t get peace in the Middle East, although the week started with hope as Secretary of State Condolezza Rice made a concerted effort to do so. But we did get a rather strong rally in most equity markets that lasted all week, and put the investment community in a much more bullish mood than it was one week ago.

In Europe, the Netherlands AEX, London FTSE, and Swiss stock indices all soared past their highs of early July, when Jupiter turned direct and formed a trine to the Sun. The German DAX is almost there too, and the momentum indicators of each index look positive as we start the new week. Prices could go higher.

In the Pacific Rim, the Hang Seng also looked very strong, racing to a new monthly high. In fact, it could easily go much higher as it appears to be in a new 50-week longer-term cycle. The Japanese Nikkei is still about 400 points off its monthly high of 15,700 area on July 4, but technically it looks strong as well as we enter next week. However the Australian All Ordinaries looks comparatively weak. Its rally last week was much more timid than the others.

In the Americas, the Argentina Merval Index and the NASDAQ Composite in the USA were well off their early July highs. But in both Brazil’s Bovespa and the United States’ Dow Jones Industrial Average, the rally was nearly enough to eclipse the early July highs. The momentum indicators of each are poised for new monthly highs to form, perhaps early this week.

Gold prices backed down to test 600 last Monday, then promptly ran up to 640 by Thursday, suggesting the next leg of this longer-term bull market has resumed. But Crude Oil continued falling from its 79.45 high of July 14. By Friday, it was down to 72.80, the low of the month.

Short-Term Geocosmics

The technical picture looks strong in almost all the equity indices. However we must remember that Mercury had been retrograde since July, and only ended on Friday, July 28. As stated before, when the retrograde began, “This is a period when mixed signals are frequent, causing markets to flip-flop every 1-4 days. It is also a time when support and resistance areas are not very reliable, nor are any “buy” or “sell” signals from the study of technical analysis. It is a time of “fake outs” more than “break outs.” We certainly saw a lot of fake outs in the past three weeks, and this rally may be another one.

In addition, Monday ends a favorable grand trine involving the benefic planet Venus, as stated in the opening paragraph. Now we will begin a more challenging aspect formation known as a T-square involving the Sun, August 2-11. On August 2, the Sun will form a waning square to Jupiter; on August 7 it forms a conjunction with Saturn; and on August 11, it completes this multiple aspect formation with an opposition to Neptune. The last one is a Level 1 type, the strongest signature correlating with reversals in equity markets as demonstrated in The Ultimate Book in Stock Market Timing, Volume 3: Geocosmic Correlations to Trading Cycles. Within trading days, there is a 65% historical frequency to primary of greater cycles in U.S. stocks. That frequency increases to 74% if given a 13-trading day orb.

But in a mundane as well as market sense, this combination of the Sun transiting (triggering) a T-square between Jupiter-Saturn-Neptune has the dynamic of either “irrational exuberance” or “hysterical panic.” In the first case, traders may bid stock prices up based on false assumptions, only to find immediately afterwards their judgment was in error. In the second case, they may realize that their hopes and dreams (Jupiter and Neptune) have been dashed, and reality (Saturn) strikes that the opportunity for peace and “cease fire” is much further away than originally thought. Progress on the war front is not so easy, and it’s going to take a lot more time. On top of that, with Saturn and Neptune involved, the possibility of deception and betrayal is increased. Those who were thought to be allies turn out to be… otherwise. There could be plenty of blame going around, as a prelude to the entire year coming up as Saturn starts to feel the effects (psychological) of its opposition to Neptune. Who can you trust?

Long-Term Thoughts

We now move into August, when the second of the three Saturn oppositions this decade, to planets outside of its orbit, will occur. This will be the 36-year Saturn-Neptune opposition, which itself will unfold in three passages: August 31, 2006, February 28, 2007, and June 25, 2007. In the study of astrology, Saturn represents “lack of,” or “depression” of the principles that it relates to (aspects to other planets, signs, or houses). Neptune pertains to liquids like crude oil, rain, oceans, floods, chemicals, poisons. It also pertains to aesthetics, art, music, theatre, as well as deception, gossip, rumors, and betrayals, as in “character assassinations.”

In terms of financial markets, and fundamentals that can affect financial markets, this planetary pair signature can relate to either a “lack of water,” or losses caused by too much water (floods). Either phenomenon, in certain parts of the world, can affect the price of foods. Or it can correspond to a depression in the price of crops. The same is true with Crude Oil. In this case, however, my bias is that it will correspond to “not enough” of these commodities (foods and oil), even though right now there seems to be plenty of each. I believe both of these markets will be “demand driven,” even more than (lack of) “supply driven”. It’s already been happening with crude oil, which relates to Uranus in Pisces (2003-2011) than anything else astrologically.

But at this time it is the grains – and specifically Corn – that I want to address. For the past two weeks, I have discussed the idea that outstanding investment opportunities lie ahead as the third of the Saturn opposition aspects unfold (to Uranus) in 2008-2010. When Uranus is involved, advances in technology usually take place. One of the leading trends starting to take shape has to do with alternative energy fuels, especially ethanol. And the leading source of ethanol is Corn. As Saturn opposes Neptune for the next year, and the price of Crude Oil continues to soar towards triple digits (as forecasted in this column over the past year), the demand for ethanol will increase. That means the demand for Corn will also increase, and there is only so much Corn that can be grown. And if there is a loss of Corn due to inclement weather (drought or floods), as Saturn-Neptune can suggest, combined with the increase of demand as alternative fuel source as Saturn-Uranus suggests (to me), then these factors can be the “perfect storm” for this commodity to double or even quadruple in price by the end of this decade. Corn is currently trading around $2.50/bushel in the new crop contract. The all-time high is slightly above $5.00/bushel. Just as I think Crude is eventually going to $100.00/barrel, I think Corn has the possibility of going to $10.00/bushel in the next 1-3 years, with a downside risk of maybe $2.00-2.25. That is, for a risk of 50 cents per bushel, I think there is the potential gain of $7.00-8.00. It’s not going to happen over night. But I think the move will begin soon enough, and thus this becomes another “crisis investment strategy” idea for investors to consider for these unusual times we are in, and those we are about to enter.

Announcements:

The next “MMA Cycles Report” and “MMA Japan Markets Cycles Report” will come out this week, July 31-August 1. These reports come out every three weeks to subscribers of these reports. The “MMA Cycles Report” (Monday night by email) is our market advisory report for traders of the U.S. stock indices, T-Notes, Gold, Silver, Euro, Swiss Franc, Grains, and Crude Oil. The “MMA Japan Cycles Report” covers the Nikkei, Dollar/Yen, and JGB Bonds, and comes out Tuesday afternoon. For more information and subscription, please go to http://www.mmacycles.com/services.htm.

A weekend intensive on the “MMA Financial Market Timing” course is being planned for August 26-27, in Buenos Aires (see www.mmacycles.com for further information).  The focus of this small intensive will be upon MMA market timing techniques as they apply to trading of U.S. stock indices, the Euro and Swiss Franc currency against the U.S. Dollar, as well as Gold and Silver markets. Both long-term and short-term cycles will be addressed, and projections of each market will be covered. Seminar Fee: The cost of this 2-day MMA Market Timing Seminar is $1995.00. However for those who register early (prior to August 1), the discounted price is $1500.00. There are further discounts to those who are subscribers to any of the MMA newsletters. Please inquire directly to mmacycles@msn.com for those additional discounts, as well as to receive via email a further description of what this course will cover. The cost for a spouse to attend is $300.00. Registration: You may register for this MMA Seminar in Stock Market Timing via credit card by calling 1-800-662-3349 or 1-248-626-3034, or faxing registration to 1-248-538-5296. You may also register via e-mail at mmacycles@msn.com or by sending check or money order in US funds to MMA, P.O. Box 250012, W. Bloomfield, MI 48325 U.S.A.

Plans are at work to set up a similar workshop in the United States October 13-15. Right now we are looking into hotels in Denver or Phoenix.

If you are an active short-term trader, you may wish to consider subscribing to our Weekly or even Daily Market Reports with short-term trading recommendations. These reports give in-depth analysis of the DJIA, S&P and NASDAQ futures, Euro currency (cash and futures), Swiss Franc, Dollar/Yen cash and Yen futures, T-Bonds, Soybeans, Wheat, Gold and Silver. The daily reports cover all stock indices listed above, as well as futures in Euro, T-Bonds, Soybeans, Gold and Silver. Subscription to the daily report also includes the weekly report. For more information, go to http://www.mmacycles.com/services.htm, or call our offices at 1-248-626-3034.