US-China trade deal sparks Santa Claus rally ahead of Christmas eclipse

(16 December 2019) Investors breathed a sigh of relief after the tentative agreement of the Phase 1 US-China deal late last week.  While there still seems to be some uncertainty surrounding the details of the deal, financial markets finished mostly higher.  In addition, the Fed delivered a dovish statement in its Wednesday FOMC meeting and the UK's Boris Johnson won a large majority in Thursday's election.  These were also bullish developments that helped boost stocks to new highs.

The gains did not significantly diverge from my expectations.  The ongoing Jupiter-Uranus-Chiron alignment was likely to provide a floor for stocks in any event although the bearish Venus-Saturn transit influence did not coincide with much downside.  I had been uncertain about the outcome of the US-China talks as the planetary indications were decidedly mixed although I thought a minor deal was quite possible.  While we have seen a largely positive reaction so far, the optimism could dissipate rapidly as we have seen so many times before in this ongoing saga.

With recession fears diminishing somewhat in recent weeks, the consensus view for stocks is mostly bullish as we finish up 2019 and head into 2020.  I'm far less sanguine, as the bullish Jupiter influence is waning as we approach the holiday season just as Saturn's bearish influence is likely to become more apparent.




One possible turning point in that respect is the upcoming Solar Eclipse that takes place shortly after Christmas Day, at twelve minutes past midnight (EST) on the 26th to be exact. Eclipses can have powerful effects on the markets -- and on our lives in general -- although they usually don't manifest until several days or weeks after the event.  We saw a near-immediate reaction to the lunar eclipse of January 31, 2018 as global markets declined sharply in the days following and thus began an extended period of volatility that would last for months.  Stocks also sold off sharply just two weeks after the lunar eclipse of July 16, 2019.  This is a more typical time lag between the eclipse and the market reaction, whether bullish or bearish. 

Eclipses usually need their energy to be released or triggered by a faster-moving transiting planet like Mars or Mercury.  We can see that the week-long 6% sell-off that began on July 31, 2019 coincided with Mercury stationing direct at 29 Gemini almost exactly opposite the lunar eclipse point at 0 Capricorn.  As I have discussed previously, Mercury stations (retrograde and direct) more often coincide with major moves, both positive and negative.  While other factors played a part in the decline, the Mercury station to the lunar eclipse point was a probable triggering factor. 



This upcoming Christmas solar eclipse will be closely conjunct Jupiter in the Sagittarius.  As configurations go, that is quite positive all other things being equal.  One possible interpretation is that it could mark the proximity of a major high point in the market.   A solar eclipse that conjoins Jupiter could mean that this is "as good as it gets".   Mercury will then transit across the eclipse point of 10 Sagittarius on December 31 so that is another plausible high water mark to consider.  That said, I'm still not sure stocks will continue to rally through to the end of the year.  Certainly, the typical Santa Claus rally around the holiday season tends to lift stocks and that could well happen again this year.  But there are likely to be some noteworthy down days along the way over the next two weeks that could make things difficult for bulls.  

While eclipses can be both bullish and bearish depending on the relevant alignments at the time, it should also be noted lunar eclipses carry more downside risk than solar eclipses.  The next lunar eclipse occurs on January 10, 2020 and may well be in closer proximity to trouble for the markets.  Saturn is more prominent in early 2020 as it will be conjunct Pluto in January and then due to enter sidereal Capricorn in late January and early February.  This Saturn influence is likely to represent a shift in sentiment in the financial markets as we begin 2020.

For a more detailed analysis of the markets, please check out my weekly subscriber newsletter which is published every Saturday afternoon (EST).   I outline the key technical and planetary influences for US and Indian stocks for the short and medium term, as well as currencies, gold and oil.





These forecasts are usually posted weekly. 
You can be notified of new posts if you follow
ModernVedAstro on Twitter.

Please note that this is a more general and much abbreviated free version of my
investor newsletter which can be subscribed to
here.


Please read my Disclaimer