Weekly column: Mercury retrograde meets geocosmic chaos

Review

U.S. job growth cooled sharply in July while the unemployment rate unexpectedly rose to the highest level in nearly three years. The Labor Department reported Friday that employers added 114,000 jobs in July, missing the 175,000 gain forecast by LSEG economists. The unemployment rate also unexpectedly inched higher to 4.3% against expectations that it would hold steady at 4.1%. It marked the highest level for the jobless rate since October 2021.

—Megan Henney, “US Job Growth Slows to 114K in July While Unemployment Unexpectedly Jumps,” www.foxbusiness.com, August 2, 2024.

The average rate on the popular 30-year fixed mortgage dropped 22 basis points to 6.4% Friday, according to Mortgage News Daily. That is the lowest rate since April 2023. The 15-year fixed rate fell to 5.89%, its lowest level since early May 2023.

—Diana Olick, “Mortgage Rates Plunge to the Lowest Level in More Than a Year after Weak Employment Report,” www.cnbc.com, August 2, 2024.

The stunning collapse of world stock indices, following all-time or yearly highs for many during the Mars-Uranus-Algol combustion of mid-July, continued last week. Actually, many exhibited a secondary high on Wednesday, July 31, as the Federal Reserve Board announced that there would not be an interest rate cut just yet but probably in September because the economy is now starting to show signs of weakness. Unemployment is going up and inflation is coming down, giving it room to ease. Yet, although that is what the Fed basically wanted to see before lowering rates, it also spooked the stock market – especially with unemployment starting to creep up. The DJIA promptly dropped over 1800 points from Wednesday’s high of 41,198 to Friday’s low. That’s a rout and keeps the DJIA on track for the 4-year cycle low by November, which we have been alerting readers about over the past month and even as far back as the Forecast 2024 Book, written in November 2023.

So far, the decline in the DJIA is rather benign compared to the NASDAQ. The tech-heavy NASDAQ futures market has now lost approximately 12.5% from its all-time high of July 11. This is approaching our 16-26% decline target between August and November 2024. It could be there by the time Jupiter squares Saturn on August 19, +/- 10 days, a time band also discussed in this column, as well as our weekly and monthly subscription reports. It’s all part of the collective psychology of Jupiter (optimism), leaving the favorable confines of Taurus (assets) and harmonious aspect to Uranus, Neptune, and Pluto, April through June, for the much more somber reality of Jupiter square Saturn (depression and loss of confidence), August 2024 through June 2025. The time between the first and second passages of this three-passage aspect is the most critical, which takes place August-December 2024.

Similar sharp declines were noted in other stock indices throughout the world. For instance, the patterns exhibited by the Nikkei and DAX are not very encouraging for bulls. However, we now begin another Mercury retrograde cycle, and the Trickster has a notorious reputation for fakeouts and false moves.

Precious metals also got hit late in the week. Gold made a secondary high – double top – on Friday at 2522 in the December contract before falling to 2453 within hours afterward. The all-time high in the December contract remains 2537.70, recorded on July 17 (Mars-Uranus-Algol period). Silver’s struggles have been much more pronounced. After posting a 12-year high on May 20 at 32.75, it plunged to 27.45 on July 29,  a loss of 16%. However, it held above the lows of last week, which offers some encouragement to the bulls. Yet a new high in Gold on Friday accompanied by a still-subdued Silver market is a case of intermarket bearish divergence. Their intermediate-term cycles may have peaked unless both can make new weekly highs next week.

Bitcoin also disappointed bulls after an initial surge of promise. On Monday, July 29, BTC breached 70,000 for the first time in nearly two months. But then it fell back again to support in the 62,000 area represented by the 39-day moving average. If it can take out 70,000 again, it may decouple from stocks.

Short-term geocosmics

This year isn’t like any previous time. This is the year of the sudden, historically disastrous debate, the near-assassination of one of the nominees, the sudden removal of the president from his ticket, the sudden elevation of a vice president her own party had judged a liability, and her suddenly pulling even in a suddenly truncated campaign. We have never had this year. And it continues to astound. Kamala Harris just got two excellent weeks in the clear. Donald Trump’s campaign had to take her down early or at least hit her hard—and didn’t.

—Peggy Noonan, “The Fight of Trump’s Political Life,” www.wsjonline.com, August 1, 2024.

The forces of American culture and politics are pushing men and women under age 30 into opposing camps, creating a new fault line in the electorate and adding an unexpected wild card into the 2024 presidential election. Young men now favor Republican control of Congress and Trump for president after backing Biden and Democratic lawmakers in 2020. Women under 30 remain strongly behind Democrats for Congress and the White House. They are also far more likely to call themselves liberal than two decades ago.

—Aaron Zitner and Andrew Restuccia, “America’s New Political War Pits Young Men Against Young Women,” Wall Street Journal, July 28, 2024.

The Trickster returns this week. Another Mercury retrograde cycle will be upon us, August 4-5, and lasting through August 28. Given the slew of hard aspects unfolding this month, you get the feeling that this Mercury retrograde cycle could be especially nasty for traders. It’s already off to a dismal start in world equity markets that just ended one of their worst sell-offs of the year.

It may be wise to keep in mind that it is late in the four-year cycle. When markets make new highs late in a long-term cycle, declines are usually severe and very swift. There can be a mini-panic, especially if Mars, Jupiter, and Uranus are involved in aspects close to one another. This past Friday, August 2, was host to  Venus square Uranus. On August 14, Mars will conjoin Jupiter. You will already be there astrologically, but on August 16-19, Venus and Saturn will form a T-square to the Mars/Jupiter conjunction, and on the same day, the Sun will square Uranus. That’s a lot of figurative “electricity overload,” more than the normal human grid can handle easily. It’s a stellar recipe for chaos and geopolitical disruption. People are thinking “outside the box,” which can either be brilliant or a sign of craziness. Markets could either break down, break out, or suddenly reverse. With Uranus combined with Mercury retrograde, you just don’t know which way the Trickster will twist. A lot of money could be made if one is nimble and can time it just right. But more than likely, stories of how much money was lost will be told. We don’t usually advise day trading as a strategy, but this Mercury retrograde cycle might be an exception. I don’t think leaving yourself too exposed these next three weeks will be wise if you are a trader.

On the other hand, we are entering the time band for a 4-year cycle low, with many indices possibly dropping 16-26% off their highs. Thus, you may want to keep cash on hand for buying when this cycle ends so you can be ready to purchase when the markets have fallen that much between now and November. When (if) that happens, plenty of people will be willing to sell. They may have to sell in order to cover their overdrawn margin accounts if Mercury retrograde and Uranus afflicted– on top of the mutable T-square with Mars-Jupiter-Saturn and Venus – behave as the symbolism of this cosmic tsunami indicates this is a possibility.

Thus, traders have a choice via our market timing methodology. Sit back on cash, wait for the elevator to hit the ground floor, and then enter to take advantage of the discounts. Or try your luck at trading very short-term and managing your risk wisely.

The same goes for politicians. There is incredible energy afoot right now. It can be very exciting and represent a time of sudden awareness, a new trend, as in “going viral.” Or it can indicate a stupid mistake or embarrassing revelation leading to a sudden reversal of fortune. Those who lean into the sentiment of unity are likely to fare better than those taking the risk of stoking divisions (Uranus afflicted). This is not the time to overreact to personal attacks. But this advice is likely to be ignored by those who are driven by hubris, emotions, and personal sensitivities. The chances of making critical and costly errors are heightened during this month. Think twice before barking and twice again before biting. Gains can turn into sudden losses if one becomes unhinged.