(22 August 2016)  Financial markets are anxiously awaiting Friday’s Jackson Hole speech from Fed Chair Janet Yellen.  Her annual presentation at the economic symposium at Jackson Hole, Wyoming often clarifies Federal Reserve policy for the coming months.  This year many Fed watchers are wondering if the famously dovish Yellen will make a stronger case for another rate hike in the near term, possibly in September.   If she does signal higher rates sooner rather than later or delivers some other surprises, stocks are more likely to fall.  Despite modest improvement in US fundamentals recently, the market may not like the sound of higher rates after enjoying the fruits of the near-zero interest rate policy over the past seven years.  The Fed’s near-zero interest rate policy has increasingly been criticized as the main reason for growing economic inequality in the US and why the record high stock market is now so widely divergent from the real economy.

Stocks have been going mostly sideways so far in August.  In the first two weeks of August, the Jupiter-Uranus alignment and simultaneous entry of Jupiter into sidereal Virgo kept sentiment fairly positive.  As I suggested in my previous market forecast, we have seen more weakness in recent days, however, as the apparent Jupiter influences begin to wane.  As Jupiter moves away from its angular alignment with Uranus, there is a greater risk of declines as the bearish Saturn influence may manifest more readily.  Mars exactly conjoins Saturn on Tuesday and this may well be an important turning point in financial markets as both malefic planets will then form a larger alignment with Neptune and the North Lunar Node (Rahu).  Multi-planet alignments involving malefics like Saturn are more often correlated with stock declines.  This square alignment of Saturn, Neptune and Rahu involves slow moving planets and will be roughly in effect until October. 

Sentiment may also suffer another hit this week as Venus enters sidereal Virgo.  The transit of Venus through its sign of debilitation occurs once a year and lasts about four weeks.   It usually correlates with weakness in stocks.  Venus enters Virgo on Thursday 25th August and will stay there until Sunday 18th September.  Venus symbolizes money and value (among other things) and when it transits through Virgo, these positive qualities cannot come forth so readily.  As a result, value is undermined and stocks typically fall.  This is a simple yet effective correlation in financial astrology with a good track record as the tables below show and previous financial astrology posts have highlighted.   While I have calculated the declines for US stocks, the correlation seems to hold across most global stock markets.  Last year’s transit of Venus through Virgo brought only a very modest 1% fall, although the deepest decline in the middle the transit was a more significant 4%.

It is intriguing then that Venus should enter Virgo just one day before Yellen’s major speech.  It doesn’t necessary mean that Yellen will talk up the prospect of tightening rates although the symbolism would tend to suggest some constraint or limitation (Virgo) on value and money (Venus).  Indeed, the bearish Venus-in-Virgo effect could result from some other source altogether.  And yet recent statements by fellow Fed members have sounded more hawkish (i.e. more in favour of tightening) so that outcome is perhaps more likely given this Venus influence.

This week contains an unusually high density of close aspects, both bullish and bearish.  The Mars-Saturn conjunction should be seen as a negative although it needn’t manifest on the day of its exact conjunction on Tuesday.  The Mercury-Jupiter conjunction still aligns with Uranus and Venus will join them in Virgo later in the week.  The negative Virgo influence notwithstanding, those three planets are all benefic and hence the alignment should produce some temporary upside.   It is important to note that any negative effects of the Venus in Virgo may not even manifest this week.  For this reason, it is also conceivable that the market could react favourably to Yellen’s speech at Jackson Hole. 

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