Published by WallStreetWeather.net
Autumn began in the northern hemisphere at 5:19 PM EDT today when the Sun entered Libra. Libra represents balance, and at the Equinox the hours of day and night are equal in length.
Although financial markets do not always decline in the autumn (the DJIA and the S&P 500 reached record highs in October 2007), Wall Street has a tendency to equate the beginning of Fall with a fall in the stock market. As Barron’s columnist Randall Forsyth describes in “It’s the First Day of Fall – In More Ways than One,” “the number of huge reversals that took place on or about that date is stunning.”
The Sun represents speculation. Libra is ruled by Venus, the planetary ruler of money, banks, and moveable assets. As the ruler of all types of relationships, arrangements, and alliances, Libra represents parties coming together to reach agreement on a fair exchange of value. Financial relationships broke down one year ago when counterparties refused to trade with one another and banks refused to lend to one another.
Cardinal signs* such as Libra usher in the start of each season. These signs initiate new developments and take action on existing matters. Libra is an air*** (mental) sign, and during the Fall season (September 22 to December 21**), being out in the crisp clear air can help to clear people’s thinking regarding whether financial values have become out of balance in one direction or the other.
The New Year actually begins at the Vernal Equinox (around March 20) when the Sun enters Aries, the first sign of the zodiac. The Sun represents the life force, and the Sun in Aries expresses bold self-confidence and enthusiasm, eager to start something new. In Aries’ opposite sign Libra, the Sun’s sense of self-identity is shaped through outside influences and relationships with others. Financial markets have a full plate of news to digest now as they focus on year end. Congress is always in session during this time and the Supreme Court begins a new session the first Monday in October of each year (Libra is symbolized by the scales of justice and equality). And the start of each new season brings quarterly earnings reports.
After Art Cashin, director of floor operations for UBS Financial Services, mentioned the Autumnal Equinox on CNBC’s Squawk Box this morning, Joe Kernan began making silly comments about how the Full Moon “sucks our brains up into our head.” The Moon rules our emotions which can get highly charged and go to extremes at the Full Moon as it marks the peak of the Moon’s monthly cycle when the Moon opposes the Sun. The Autumnal Equinox functions as a “seasonal Full Moon,” as Libra marks the halfway point in the cycle begun at the Vernal Equinox (“New Moon”). What’s happening now grabs our full attention.
Mercury represents thoughts and communications, and Mercury was retrograde during or just prior to the time of many of the biggest market reversals, such as the 1929 and 1987 crashes. (Mercury is retrograde until September 29.) Planets shifting into new signs or planets appearing to change direction from Earth’s vantage point at the time of the Autumnal Equinox tend to increase the chances of a market turning point. The Sun rules gold. Venus (money) moved into Libra conjoining the Equinox Sun at the same time Saturn (government) turned direct in 1931 when the British government took the pound off the gold standard. Gold stocks peaked at the 1980 Autumnal Equinox when Saturn entered Libra; Saturn will return to Libra for the first time since then on October 29.
Other factors contributing to the propensity of market reversals are due to the Libra Sun and other planets in cardinal signs forming challenging alignments to cardinal planets in the USA and NYSE charts at the same time eclipses or other major planetary alignments are present.
Planetary cycles repeat themselves but express their energies differently each time. During the early 1930s, Saturn (economic contraction; government), Uranus (shocks/sharp price movements; reforms), and Pluto (extremes; wealth/bankruptcy) formed challenging alignments to each other in cardinal signs. In 2010 these three planets will once again enter cardinal signs and Uranus will be in Aries for the first time since the Great Depression.
Since the Sun rules speculation, it is not surprising that market watchers follow Sunspot activity beyond its effect on communications and weather patterns. The Sun in 2008-09 has been in the solar minimum part of its 11.1 year cycle of activity, the lowest level since 1913. (The early 1930s were also a period of solar minimum.) Art Cashin mentioned that today marked the sighting of a second sunspot that has formed on the Sun, part of Solar Cycle 24 predicted to peak in May 2013.
Frequent reversals are common in financial markets during the time Mercury is retrograde as the market tends to lack a clear sense of direction. The Barron’s article talks about being prepared for market reversals, particularly in the currency market. In a previous post I described how the Sun challenging Pluto in Capricorn and Mercury opposing Uranus on the day of the September 23 FOMC announcement could reverse currency markets, affect foreign purchase of Treasurys, and contract the amount of mortgage securities the Fed purchases. Planets entering cardinal signs influence Fed policy actions; transits by Pluto, Saturn, and Uranus between 2008-11will totally transform the “purpose and scope” of the nation’s central bank.
The indices celebrated this Autumnal Equinox by making new 2009 closing highs. The Fed’s constant reiteration that record low interest rates are likely to remain low for an extended period of time, along with its purchase of Treasurys and mortgage securities, has provided the rocket fuel for the stock market, the bond market, and commodities reacting to the weaker dollar.
Whether or not the bear market returns this autumn remains to be seen. Financial markets have the potential to make more pronounced market moves around the following days:
September: 23, 28, 29
October: 5, 8-9, 12-16 (esp. 13 and 15), 19, 28-29
November: 1-2, 4-5, 9-11, 16, 19, 23, 25, 30
December: 1-2, 7, 11, 14-16, 21(Winter Solstice 12:47 PM EST)
Despite the physical impact the Sun, Moon and planets exert on our Earth, Barron’s is actually kinder than most in referring to planetary cycles as “alternative explanations” for the market’s behavior. The media may joke about Full Moons, Equinoxes, and Mercury retrograde, but Wall Street is watching, sometimes publicly but most of the time in the shadows.
*The other cardinal signs are Aries (Spring), Cancer (Summer), Capricorn (Winter).
**Fall 2009. Depending on the year, these dates can vary by a day or two.
***The other air signs are Gemini and Aquarius.