(13 May 2019)  So much for winning.  Markets took the full impact of the deteriorating US-China trade relationship on Monday as stocks sold off sharply.  The Dow followed most global markets lower falling more than 600 points after China responded to Friday’s US tariffs with new tariffs of their own.  Trump’s confrontational approach to China appears to be blowing up in his face as a negotiated deal is nowhere in sight.  Without much hope of a future settlement, stock markets are anticipating a slowdown in economic activity and marking down asset values.

This negative outcome is in keeping with my expectation as the ongoing Saturn-Ketu conjunction is starting to deliver the bearish goods.  Last week, I thought the alignments looked more negative than positive and we did see some significant downside through the week.  The early week Mars-Jupiter opposition in particular saw a large decline in stocks globally.  Friday’s bearish Sun-Saturn-Ketu alignment coincided with the low of the week, although US markets did recover by the close.

The US-China trade relationship is in bad shape.  China is not in any mood to negotiate after Trump foolishly called them out by accusing them of reneging.  From an Asian perspective, this loss of face essentially guarantees that China will double down on its position and resist any compromise for as long as possible.  

Just as we saw the current conflict in the combined horoscopes of Trump and Xi in last week’s post, we can see this tension in the horoscope that represents the US-China trade relationship.  After the Nixon-Kissinger initiative to normalize relations with China in 1972, a formal trade agreement was signed in July 1979 to foster trade and economic co-operation.  This agreement went into effect on February 1, 1980. 

The trade friction began in January last year when the US imposed tariffs to solar panels, most of which were made in China.  Steel and aluminum soon followed and by early April, both China and the US had begun to specifically target each other’s goods for tariffs.  This coincided with a clearly malefic alignment of the Lunar Nodes, Rahu and Ketu with the Sun-Moon opposition in the 1980 chart. 

According to Vedic astrology, the nodes symbolize interruption and change within established routines.  At the time the first tariffs were imposed on April 2, 2018, the Mars-Saturn conjunction at 14-15 Sagittarius also aligned closely with the natal Jupiter (expansion) at 14 Leo.  Together, Mars and Saturn represent limits, restrictions and hardship.

This most recent conflict coincides with the Mars square (2 Gemini) to the natal Saturn (2 Virgo) and more importantly, the alignment between transiting Saturn-Ketu (25-26 Sagittarius) and Venus-Mercury, which are situated at 25-26 degrees of their respective signs.  The Saturn 3rd house (60 degree) Vedic aspect hits Venus exactly now and is a profoundly damaging influence for harmonious relations.  This is clearly not just a passing tiff; this is a deal-breaker.

The good news is that the Saturn-Ketu conjunction will slowly move out of range of the Mercury-Venus in the 1980 trade agreement chart over the coming weeks. I suspect that may represent a reduction of explicit conflict and putting things on the back burner for a while.  But the problem is there are no clear positive transits which would indicate a major agreement.   There will likely be some temporary improvement in the summer, probably around the Jupiter station in August which will align nicely with the natal Moon.  

But in September, emnity is likely to emerge anew as Saturn will station direct at 20 Sagittarius in an exact alignment with the natal Mars.  This is a highly combative sort of set up where the inherently divisive nature of Mars will be manifest by the lengthy contact with Saturn.  Whatever fence-mending we might see over the summer will likely be undone in the fall.  And trade relations may well get worse.

Weekly Market Forecast

Stocks fell sharply today as the other shoe dropped in the trade dispute and China slapped $60 Billion more in tariffs on US goods. The decline coincided with a tense Mercury-Mars 45 degree alignment which outweighed the upside contained in the weaker Sun-Jupiter pattern.  Are there more declines to come?

The planets this week suggest that more downside is likely.  There are a high number of alignments this week which makes exact timing more difficult, however.  Tomorrow (Tuesday) has some negative potential with the Moon-Mars square, to say nothing of the approaching Mercury alignment with the Saturn-Ketu conjunction.  Mercury will likely act as a trigger at some point this week, although it may not occur until Thursday. 

The heliocentric alignments confirm this tense interpretation as Mars opposes Pluto very close to Pluto’s node.   Friday’s Venus-Uranus-Chiron alignment looks somewhat bullish so if stocks have been down during the week, then that would set up a Friday bounce.

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.