MMA Weekly Comments

Review and Preview:

Once again, astrology proved its exceptional value as a market timing tool last week. Previously this column had outlined June 4-22 as one of the most important geocosmic time bands of the year, following the prior one of April 30-May 10. These are periods in which there are an unusual number of planetary aspects and stations (retrograde-direct changes), and as demonstrated in several of the studies I have published, this is the key to identifying important reversal points in financial markets. Since several equity and precious metals’ markets made multi-year highs in the first two weeks of May (previous geocosmic “cluster”), we projected a sharp downturn to form a significant low into the current one, with the greatest probability of reaching a trough of importance around the midpoint, which was June 13. Bingo! On June 13-14, every equity index we track, plus precious metals, plus currencies (relative to the U.S. Dollar), all found support and began a sharp rally into the end of the week.

In Europe, the low in the Netherlands AEX unfolded Wednesday at 409.60, a loss of over 14% from the multi-year highs of late April. The German DAX bottomed also on Wednesday at 5243.20, a loss of nearly 15% from its multi-year highs attained on May 11. London’s FTSE index fell to 5467, and the Swiss stock index to 7123 on Tuesday, June 13, their lowest levels of this year, and a loss of well over 10% from their highs of late April, early May.

In the Pacific Rim countries, Japan’s Nikkei stock index took the biggest hit, falling to 14,045 on Wednesday, June 14, a loss of 20% from its multi-year high of 17,563 less than two months ago. The Hang Seng of Hong Kong, and Australia’s All Ordinaries, also bottomed on Tuesday and Wednesday of last week, down about 12% from their highs of early May, and to their lowest levels in several months.

In the Americas, the Dow Jones Industrial Average suffered the least. Its 10,699 low of Wednesday morning was down only 8.3% from its double top on May 10 (11,670) to its all-time high of January 2000. The NASDAQ Composite fell to 2065 on Wednesday morning, a 13% loss from its highs earlier this year. But the worst declines of all were in Brazil’s Bovespa and Argentina’s Merval Index, whose lows of June 14 were down nearly 24% from their all-time highs of late April, early May. That’s the bad news. The good news is that all of these stock indices rebounded sharply by the end of the week, with most providing excellent technical signals of a possible primary cycle trough (see glossary, or “Merriman on Market Cycles: The Basics”).

Stock indices were not the only markets taking a huge plunge from early May into last week, then rebounding nicely. Both Silver and Gold were even more dramatic. Silver went from 1520 to 960 from early May through its low of last week, a drop of nearly 40%! Gold fell from 728 to 545 during the same period, bottoming the evening of June 13 in the Fart East, a plunge of 25% in about one month. But here too we are now in a time band for long-term cycle lows, especially in Silver and the XAU index (Gold and Silver mining), per our forecast in the now-out-of-print “Forecast For 2006” book.

Short-Term Geocosmics:

We are now in the second half of this huge reversal zone. As stated last week, “Within it is another tight cluster of powerful geocosmic signatures, spanning a period of June 15-22. During this period we will find six Level One signatures (most powerful correlates to primary or greater cycles, as identified in the studies reported in The Ultimate Book on Stock Market Timing Volume 3: Geocosmic Correlations to Trading Cycles). The first is the Sun in opposition to Pluto, which has a 67% correlation to primary or greater cycles within 10 trading days. This is followed by the war-like conjunction of Mars and Saturn, another Level 1 signature with a 65% correlation to primary cycles within 8 trading days. One day later (June 19), two other Level 1 signatures unfold: Mars in waning square to Jupiter and Uranus stationary retrograde. The first has a 71% correlation to primary cycles within 12 trading days, and the second has a 77% correlation to the same within 11 trading days. And finally, the “big daddy” of them all – Jupiter in waxing square to Saturn – on June 22. This is a longer-term 20-year planetary cycle, so it has correspondence to longer-term stock market cycles, like the 4-year type.”

We can already see evidence of these signatures corresponding to world events related to their themes. The Mars-Saturn conjunction, signifying combat and war threats, is indeed happening in the Middle East, particularly in Israel and the Gaza area, not to mention the continued violence in Iraq. With Uranus turning retrograde this coming week, we may see earthquakes and/or bizarre weather patterns, and maybe even heavy tropical storms (like hurricanes). And with Jupiter’s square to Saturn, it was not surprising to see the new U.S. Supreme Court make a decision (“no knock” police searches) that gives police greater freedom in going after suspected criminals, in violation to the Fourth Amendment. As stated in last year’s Forecast for 2006 book, during the period of Saturn moving from a waxing square to opposition of Uranus (1999-2010), fear increases, and both national security and personal safety become increasingly important. And both politicians and lawmakers tend to make their points based upon fear. In other words, “Fear Sells.” Fear becomes a prime motivator for action and decisions. With the campaign season about to get underway for the mid-term Congressional elections in November, we can expect this theme to be ramped up again in the next few months.

Long-Term Thoughts:

And speaking about that election…. Did President Bush (and the Republicans) begin a strong comeback last week or what? After months of appearing withdrawn and on the defensive, President Bush was very active and bold, even conducting another unannounced surprise visit to the troops and the new government of Iraq. Our comments last week were indeed timely, as we stated, “Bush now finds the trine of Jupiter and Uranus to make a grand trine to his natal Sun, an energizing combination that will last through at least August 2006. Under this signature, his popularity and confidence could very well improve considerably, thereby helping his party’s chances of re-election this autumn. If he is going to make a move to improve his standing with the electorate, now is the time to do it…” I don’t know if he reads these columns and takes our advice (not likely!) or like the rest of us, he simply responds to the astrological transits to his natal chart “on time.” In reaction to his bold moves, the U.S. stock market staged its sharpest rally of the year, with the Dow Jones Industrial Average up about 200 points on Thursday.

Longer-term, we continue to monitor the state of the 4-year cycle. As stated previously, the 4-year stock market cycle is due to bottom this year, and in over 85% of historical cases studied, equities fall at least 20% from their highs that precede this long-term cycle trough. As we have seen, several equity markets of the world have already dropped at least 20% in the past month. Was that it? I don’t think so. But I think it may have been the end of the first leg down. We had a great rally after the lows of Tuesday-Wednesday. But now we come to Uranus turning retrograde on Monday, and we could see yet another sharp reversal start early this week. However, with Uranus, these sharp price swings may be short-lived. The volatility is not likely over.

Announcements:

I will be in the San Francisco/Napa Valley area around July 22-26. It is my wife’s solar return (birth date) and it turns out that Napa Valley creates the best chart for her year ahead, based on her goals for the year and my understanding of these principles. So we will go there at that time. If there is a local trading group, or astrology group interested in sponsoring a talk while I am there, please feel free to contact me at mmacycles@msn.com.

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All copies of the “Forecasts for 2006” book are now sold out. There will not be a reprint. Thank you for your response to this special annual book. Next year’s book (2007) will be ready December 15, 2006.