Global markets decline after China's plunge stops trading

(4 January 2016)  2016 has started off on the wrong foot as global stocks declined sharply Monday following a 7% plunge in the Chinese market that triggered circuit breakers and an early closing of the Shanghai Stock Exchange.  The decline is pretty much what I expected given the very difficult planetary alignment this week.  As I briefly mentioned in last week's market forecast and elaborated more fully in my subscriber newsletter, the Mars-Mercury square aspect was more likely to correlate with declines here because it was in effect for an unusually long time due to the approach of Mercury's retrograde station on Tuesday, January 5th.  

The retrograde station is the day in which Mercury stops its normal forward motion and then begins to reverse its direction in the sky from our perspective on Earth.  The Mercury retrograde cycle occurs every three months and lasts for about 20 days.   While its retrograde cycle is traditionally associated with miscommunication and failed plans, I have found the days around its stations to be more specifically relevant to the financial markets.  If Mercury reverses its direction (i.e. stations) while making a close aspect with a malefic planets like we got last week and this week with Mars, then declines are: 1) much more likely and 2) more likely to be large.   But it is important to note that Mercury retrograde stations are a two-way street.   If they occur while Mercury forms a close aspect with a benefic planet like Venus or Jupiter, then stocks are likely to rally higher.

We can see how the Shanghai Stock Exchange chart got hit hard by this square of Mars (6 Libra) and Mercury (6 Capricorn) as it activated the North Lunar Node, Rahu (4 Capricorn) quite closely.  Mars also cast a very close and malefic 8th house quincunx aspect (210 degrees) to the natal Mars (5 Taurus) within one degree.  Mars-Mars aspects are also usually high probability bearish indicators.  By themselves, these factors would likely coincide with a significant down day of perhaps 2-3%.  However, there is bigger affliction here that likely explained why China's stocks fell limit down 7%.  Transiting Rahu (0 Virgo) is exactly aspecting natal Saturn (0 Capricorn) by its 120 degree aspect.  Rahu-Saturn aspects are usually bad news for stocks just as Mars-Mercury aspects are.  But since both Rahu and Saturn are slower moving planets, they are more likely to represent deeper declines as well as down trends that last for several days, if not weeks. 

While the steep decline on first trading day of 2016 seems to be a bad omen for the year, there are other ways of assessing the probable direction of stocks for the year to come.  In my New Year's Day chart analysis, I suggested that this same planetary alignment at midnight on New Year's Day could be a negative influence for the year.  This was due to the slow-moving Mars-Mercury aspect which was still very close to exact on January 1st. 

The New Year's Day horoscope arguably has a greater symbolic importance for annual collective sentiment than the outcome of the first day of trading.  In that sense, this very bearish Mars-Mercury aspect has now taken on a greater significance for the year as a whole.  This is another reason to expect a more difficult year in the stock market in 2016, particularly in US and Europe which were only down slightly in 2015.  Emerging markets like India are unlikely to escape this negative influence, although the percentage declines may be somewhat less since they already suffered greater losses in 2015.   You can find a more detailed forecast for the weeks and months ahead in my weekly subscriber newsletter.

We could see more downside tomorrow and even into Wednesday as the Mars aspect to Mercury is still within range.  However, we could see some changes in the second half of the week.  By Wednesday, Mars will be separating from Mercury and the Sun will align with Pluto and Uranus.  This offers more positive outcomes although even here the Pluto influence is a big question mark.  Thursday and Friday's Venus-Saturn conjunction looks bad for assets like gold but could be better for stocks.  I would not rule out any particular outcome this week given the high density of close multi-planet aspects in play here.  It should be a fascinating and volatile week.