(16 November 2017) US stocks rebounded today on positive corporate earnings and news of the passage of the GOP tax bill in the House.  Markets had been somewhat weaker over the past two weeks on growing doubts that Trump’s business-friendly tax bill could pass both houses of Congress by the end of the year.   Most global markets have also moved lower since early November after rallying higher for almost a full year following the election of Donald Trump.   But is the recent decline evidence that the Trump rally is running out of steam or is this just another brief pause before stocks eventually move to higher highs?

The natal horoscopes of key financial entities like stock exchanges and stock indexes can provide clues for future trends in stocks.  The Dow Jones Industrial Average is the most well-known index in the world and its horoscope offers a plausible account for the pullback in November.  From the chart below, we can see that Saturn (2 Sagittarius) has been opposite Mercury (1 Gemini) for the past two weeks. 

Saturn-Mercury aspects are fairly reliable markers of down moves in stocks that does seem to be the case here.  But we should also note that Jupiter, the planet of optimism, is fast approaching its conjunction with the Ascendant in Libra.   The exact Ascendant is a matter of speculation in this horoscope as the birth time of the Dow is not known exactly but nonetheless, we should acknowledge that the Venus-Jupiter pairing is a bullish influence which may have prevented further downside here in November.  Today’s gain actually coincides with the exact conjunction of Venus with the Ascendant, thus offering more support to the notion that the Dow was "born" quite close to 5 p.m.

But we need to keep our eyes on transiting Saturn here.   Not only is it having a depressing effect on sentiment through its aspect with Mercury, but it is also involved in an alignment with Ketu (the South Lunar Node) at 5 Leo. The presence of Jupiter in Libra would seem to be positive, but the ongoing Saturn-Ketu alignment could bring more downside. This is one reason why I would think more declines are somewhat more likely in the next few weeks.  The exact Saturn-Ketu alignment takes place in mid-December. 

Echoes of 1929?

Interestingly, the current position of Saturn is the same as it was in October 1929 at the time of the crash that began the Depression in the 1930s.  Now I’m not suggesting that a similar crash is imminent.  Saturn’s cycles take about 30 years and we saw no similar crashes of declines in either 1958 or 1988 when Saturn was in the same point in the sky in early Sagittarius.  Stocks actually rose in late 1958 when Saturn was in this position. 

But it is important to note that the 1929 Saturn transit to Mercury and Ketu in the Dow chart was likely one reason why the market plunged.  Other factors were also in place and thus created the conditions for a sudden decline.  As we can see in the chart below, the conjunction of Mars and Ketu in Libra also likely played a big role in the crash since it aligned with the Ascendant and with natal Saturn.  This time around, Ketu and Rahu are in relatively benign positions as Rahu is transiting the 10th house where it does fairly well and is close to the 10th house cusp (MC). 

And yet the fact that Mercury will station retrograde in an exact alignment with Saturn and the natal Ketu at 5 Sagittarius on December 3rd should give us pause.  This does not seem like a positive alignment that will correlate with more gains in the markets.  Instead, it seems negative.  And while Jupiter in Libra will still be exerting a positive influence throughout, I would think there is a higher risk of declines than we have seen throughout the past year of the Trump rally. 

This stronger Saturn influence suggests the market could experience more weakness.  That may also reflect the likelihood that the tax bill is expected to get bogged down in the Senate thus making quick passage unlikely.  Its pro-business bent may also get watered-down and this could be another source of disappointment for investors.

Weekly Market Forecast

Stocks may remain under pressure next week, especially in the early part of the week.  The Mars-Rahu alignment on Monday the 20th suggests sudden developments which may catch investors off guard.  It could therefore increase the chances for some downside.  The US Thanksgiving holiday on Thursday will reduce trading volumes and the market would have a more positive bias on those days.  It is conceivable the week as whole could be positive but I would be concerned about the impact the early week Mars pattern.

For more details and analysis on market trends for this week, this month and this year, please check out my weekly MVA Investor Newsletter.  The newsletter is published every Saturday and includes extended discussion of US and Indian stock markets, as well as gold, oil and major currencies.