(11 January 2016) Stocks fell sharply around the world last week as China’s financial turmoil threatened to undermine the fragile economic recovery.  As China’s devaluation of the Yuan sideswiped markets, US stocks had their worst start to the year in history falling 6% as the Dow closed at 16,346.  Indian stocks also slumped 4% as the Sensex fell below the key 25,000 level.  This outcome was in keeping with my stock forecast from last week as I thought the Mars-Mercury square aspect would likely cause some significant damage.  This was not just any old Mars-Mercury square, of course, but a particularly nasty one since Mercury turned retrograde on the very same day the 90 degree angle was exact!  Asian markets have extended their decline on Monday at this time of writing although European stocks are mixed.

To be sure, the New Year is off to a shaky start.   Is the six-year long bull market in stocks finally over?  One now reads more gloomy forecasts in the media that suggest that 2016 might even be a repeat of 2008 when the world economy came to brink of collapse.  My previous research on this subject suggests the odds are very high that most stock markets will decline significantly in 2016 and we could well see the end to this bull market in the US and Europe.  It is already over in the stock markets of many emerging economies.  This is evident in the New Year’s horoscope and the annual May horoscope of the New York Stock Exchange (NYSE).  One of the most useful tools in financial astrology is the solar return chart, i.e. the horoscope that maps the position of the planets on the birthday of a stock exchange or stock index.  The NYSE 2015 Solar Return chart (Varshphal) looked quite bearish given the close Saturn-Sun square aspect.  This strongly points toward a negative performance of US stocks between May 2015 and May 2016.  The Dow hit its all-time of 18,351 just two days after its 223rd birthday on 17th May 2015.  Currently, it is still just about 10%  below that level now despite the recent turbulence.  But if my assessment of the Solar Return chart is correct, the Dow will remain well below its high by the end of the Solar Return chart in May 2016, and probably lower than its current level of 16,346 for the Dow. 

The next twelve period from May 2016 to May 2017 is also strongly pointing to more downside.  On the plus side, SR Saturn (20 Scorpio) is no longer aspecting the natal Sun (6 Taurus) but it does form a troubling alignment with both SR Mercury (20 Aries) and SR Jupiter (19 Leo).  Mercury and Jupiter are usually sources of optimism but Saturn’s alignment here may effectively block that from manifesting for the next year.  And depending on the accuracy of the exact time of this chart (I use 10.10 but there are many others) and hence the Ascendant position, Saturn may also be exactly aligning with the Ascendant. 

An additional problem for this chart is that malefic Mars is closely opposite the Sun and Mercury.   Like Saturn, Mars is associated with declines especially when it aspects key planets like the Sun or Moon.  Whereas Saturn is pessimistic and depressing of sentiment, Mars is associated with fast-paced and shocking changes.  For its part, the SR Moon is aspected by disruptive Ketu.  It also aligns with the natal Mars. This increases the probability of not just a down year, but a year that will be volatile and unstable. 

Whether or not 2016 will be a repeat of the crisis of 2008 is hard to predict on the basis of this single chart.  But overall I do think there is considerable risk of a sizable decline in world markets in 2016 that is at least reminiscent of the level of financial chaos we saw eight years ago.  As Mark Twain said, "history doesn’t repeat itself, but it does rhyme."

Weekly Market Forecast

Despite Monday’s large decline in Chinese markets, the planets look bullish this week.  Tuesday’s alignment of Venus with Uranus and Pluto is often positive for stocks and commodities and should boost sentiment early in the week.  Thursday’s Sun-Mercury conjunction happens to coincide exactly with a nice aspect from Jupiter.  Although both Mercury and Jupiter are retrograde here alongside the often unpredictable Rahu, this four-planet combination still looks good. 

Once the Sun-Mercury conjunction separates late on Thursday and Friday, there may be less positive energy available, however.  Readers seeking more details and a longer term forecast may check out my subscriber investor newsletter.

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