MMA Weekly Comments

Review and Preview:

From the multi-year highs (or secondary top to those highs) during the week of the Jupiter-Uranus trine (May 4-10), several of the world’s leading stock indices fell sharply into new lows for this new year last week. In Europe, all four of the stock indices we track had dropped at least 10% into May 22, and then rallied sharply into Friday. The declines were comparable – close to 10% - in the NASDAQ Composite, Japanese Nikkei, and Hang Seng of Hong Kong. They were much more severe in Argentina’s Merval Index (down over 21%) and Brazil’s Bovespa index (down 17%). But the losses were much more benign in Australia’s All Ordinaries (down only 7.7%) and especially mild in the Dow Jones Industrial Average, which was off by only 5.5% from its 6-year high of May 10. In all cases, the decline ended by mid-week, and was followed by rather sharp rallies into Friday. Therefore this was another perfect hit for astrology as an exceptional market timing tool. As correctly forecasted in last week’s column, “For this coming week, Neptune turns retrograde on Monday, May 22. This is a Level 1 signature (strongest correlation to primary or greater cycles), with an 86% historical correspondence to primary or greater cycles within 10 trading days. This is followed by Venus in waning square to Mars (Level 3) on May 23, and Venus in waxing trine to Pluto (Level 2) on May 26. This is therefore a potential reversal zone, but not as strong as May 4-10, nor as strong as the next geocosmic cluster, which unfolds June 4-22.” The midpoint of last week’s cluster was May 24, and we allow a three-day trading orb. In the case of the Nikkei, Bovespa, Dow Jones, and NASDAQ Composite, the low was exactly on May 24. In all other cases, the low occurred between May 22 and May 25.

Stocks were not the only financial market making lows in last week’s critical reversal period. Gold also made a multi-week low on May 24, and Crude made a multi-week low on May 22.

And in the financial news, Enron executives Kenneth Lay and Jeffrey Skilling were convicted of fraud in one of the most highly publicized cases of executive wrongdoing in history. This is consistent with the long-term T-square currently in effect involving Jupiter, Saturn, and Neptune. Jupiter and Neptune pertain to scams, lies, hoaxes, and deception. Jupiter and Saturn in hard aspect pertain to laws and harsh consequences for violating those laws. Saturn and Neptune in hard aspect pertain to the search for a scapegoat to blame for things gone wrong. It is like a cosmic symbol for crucifixion, and/or the sense of betrayal. This T-square will remain in force through November, so there may be other major events involving high-profile corporate executives - or even politicians - who succumb to the guillotine of public outrage before the year is over, for their unpopular actions and decisions of the past.

Short-Term Geocosmics:

There are no major geocosmic signatures in effect this coming week. The cosmic action ended last week, and correlated with a major or primary cycle trough in many markets, especially stocks. Now we have to see how high this current rally will carry equities before we can determine whether or not the 4-year cycle crest actually ended with the crests of May 4-12. To determine that, we will need to examine carefully the structure of this rally, and how long it lasts. If the bull market is still intact, the rally should last more than 8 weeks. If bearish, it would likely last less than 5 weeks. Our next test via geocosmics will come June 4-22, our third huge cluster zone of the year. The former were March 1-17 and April 30-May 10. Both hit perfectly.
In the June 4-22 period, there will be seven Level 1 signatures (strongest correlations to primary or greater cycles). We also had seven Level 1 signatures in the April 30-May 10 time band. Most noteworthy in the June 4-22 period is the second passage of the Jupiter-Saturn waxing square of June 22. Also important will be the waxing square of Sun-Uranus (June 5) and Uranus turning retrograde (June 19). With Uranus, you must expect volatility, and the unexpected. It is an “earthquake” dynamic, which means it shakes things up from the norm. Markets will likely move in very sharp price increments, exhibiting strong rallies and powerful declines. With Jupiter square Saturn, greed (Jupiter) will run head long into fear (Saturn). Look for a top around these periods, followed by another disturbing decline right afterwards. I anticipate the amplitude of these swings will be very evident in the Silver too – perhaps even more so than in stocks.

Long-Term Thoughts:

I am oftentimes asked how long and how high do I think Gold can soar (and fall)? First of all, consider that we are now in the downside of the Saturn-Pluto economic cycle (from opposition to conjunction). This 18-year phase lasts from 2001-2020. As stated many times before, this is the part of the economic cycle when federal deficits increase, interest rates rise, economies stagnate (for the most part), and there are more recessions that last longer and longer, while periods of prosperity get shorter and shorter. In this phase of the cycle, commodities tend to perform better than usual, and stocks and bonds perform worse than usual. So in answer to “how long can Gold be bullish?” my response is “Probably into the end of the next decade.” My guess is that Gold can top out within two years of the January 2020 conjunction of Saturn and Pluto. It last topped out in January 1980 with an all-time of $850.00/ounce, and that was within approximately two years before Saturn and Pluto formed their last conjunction.

From the conjunction of Saturn and Pluto to their opposition, federal deficits tend to be reduced, interest rates come down, and the economy, bonds, and stocks tend to perform very well. It is a time to be in the equity markets, investing your money into the economy. However, precious metals and commodities tend not to perform very well during this 18-year phase of the cycle. We saw that from 1982 through 2001. Stocks did very well, but Gold did very poorly. Now the cycle is reversed into 2020, +/- 2 years.

So how high can Gold go? $2000.00-4000.00 is not out of the question. And my colleague Manfred Zimmel of Austria presents an argument for $6000.00. And yes, there will be smaller secular bear markets in between now and 2020. I am referring here to a long-term trend, an 18-year trend. Within that there are smaller cycles that will have their downward trends. One may be in effect right now as we approach the Moon’s North Node transit over the 0 Aries point around June 13-20. There are always cycles within cycles. And the trend is ultimately determined by the type of cycle you are looking at. In this section, I am referring to an 18-year cycle, a lunar Nodal cycle and half a Saturn-Pluto cycle. The 18-19 year cycle is the most documented economic cycle in the study of cycles.

Announcements:

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.

The remaining copies of the Forecast for 2006 book will go on sale for $30.00 beginning June 1. There are about two dozen left.

Sometime in June, we will, have another “Virtual On-line Discussion with Ray Merriman!” The subject this time will be “The Markets – the Four-Year Stock Market Cycle and Where We Are Within It.” This discussion can be heard in the comfort of your home or office. All you need is a computer with speakers. You hear the live voice and see the charts on your computer screen. You can ask questions simply by logging on to our virtual on-line meeting that evening. The cost for this private discussion will again be $45.00. Stay tuned for further announcement on this.