Dear Members,
At this point everyone has one big question: Will the US Dollar survive? There is overwhelming pressure on the dollar from technical indicators, fundamentals and the behavior of other currencies. Indeed, this sustained and unrelenting assault may compel a review of the bull prediction. While I am clear about our prediction of a historic bull market in the USD, I have spent many hours since yesterday studying planetary movement and the nature of the dollar’s future trend.
Current market behavior is quite usual as all markets are trading in an unrealistic pattern. For instance, a few months back grains sharply moved up but they have declined sharply in the last one month. Oil strongly bounced back after hitting multi year lows, and there has been rapid trading on both sides. The dollar has been dropping against all major currencies, with metals being the only ones trading steadily.
Grains are one of the most important commodities for human beings, animals as well as birds, and we are quite bullish about them especially from the second week of August when Jupiter and Mercury will turn positive. While we shall recommend holding grains from the middle of August, we are not quite bullish regarding all metals. Meanwhile, coffee is one of favorite soft commodities and we shall be buying soon.
Stock Markets & Eclipses:
I am yet to determine why stock markets are moving up so fast. This is something new for me because as you may recall, earlier this year we predicted that the DOW would hit 32000 to 38000 in five years. It now however seems as though it is intent on attaining the figure in five months! In this scenario however, we could have a devastating crash worse than 1929, 1987, 2000 or even 2008! Indeed the same thing has happened previously in many markets following solar eclipses. Yesterday I had a sleepless night pondering about the pattern and behavior developing in the market, and rather than sit and wait for what will happen, I have been looking into the future for answers. We are currently holding nuclear and solar stocks; and it us therefore good for us that the market keeps moving up. However, I am deeply worried by the current pattern as it bears the hallmarks of the stage being set for a catastrophic crash.
Indeed, current market behavior may mean that we could see one of the biggest bubbles in history within an incredibly short span of time. However, this would immediately be followed by a crash that could destroy the world financial industry/system for over 3 decades. This would herald the advent of chaos and anarchy in the world. I am sure that many people understand my worries, and my opinion is that it would be much better if the market doesn’t rise at the current rate. This is the only way that the world will be saved from certain financial ruin.
My wish and prayer is that the markets remain sideways or weak for the next six weeks in order to avert the worst financial meltdown. In 1929 before the crash of October the market sharply went down but recovered very fast in September before the historic crash occurred in October. All this actually happened between two eclipses in the same year.
The 22 July 2009, eclipse was one of the most important “total solar eclipses” to occur in our galaxy. As a matter of fact, abnormal weather behavior was observed in many parts of the world. In addition, financial markets are trading abnormally and our Astro research indicates that something usual is on the way. In the past three or four occasions, there has always been a major fall in stocks 15 days after and within 25 days a total eclipse. In this scenario market take shorter period to recover but if after market keep rising after the total solar eclipse form more than four months then market crashed before next solar eclipse.
There was a total solar eclipse on 9 May 1929, followed by another eclipse on 1 November 1929. During the period between the two solar eclipses the market went up and multiplied to new highs. However, towards the second eclipse on 1 November, markets crashed so badly that it took another 40 years to find their footing.
Following is a brief about the 1929 crash.
After a six-year run when the world saw the Dow Jones Industrial Average increase in value fivefold, prices peaked at 381.17 on September 3, 1929.[13] The market then fell sharply for a month, losing 17% of its value on the initial leg down.
Prices then recovered more than half of the losses over the next week, only to turn back down immediately afterwards. The decline then accelerated into the so-called "Black Thursday", October 24, 1929. A record number of 12.9 million shares were traded on that day.
At 1 p.m. on the same day (October 24), several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor.[14] The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank of New York. They chose Richard Whitney, vice president of the Exchange, to act on their behalf. With the bankers' financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to a tactic that ended the Panic of 1907, and succeeded in halting the slide that day. In this case, however, the respite was only temporary.
Over the weekend, the events were covered by the newspapers across the United States . On Monday, October 28, the first "Black Monday",[15] more investors decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 13%. The next day, "Black Tuesday", October 29, 1929, about 16 million shares were traded.[16][17][18] The volume on stocks traded on October 29, 1929 was "...a record that was not broken for nearly 40 years,
The Second Eclipse and crash of 1987. The first solar eclipse on 23 September 1987 and another on 18 March 1988:
The mid-1980s were a time of strong economic optimism. From August 1982 to its peak in August 1987, the Dow Jones Industrial Average (DJIA) grew from 776 to 2722. The rise in market indices for the 19 largest markets in the world averaged 296 percent during this period. The average number of shares traded on the NYSE had risen from 65 million shares to 181 million shares.[1]
The crash on October 19, 1987, a date that is also known as Black Monday, was the climactic culmination of a market decline that had begun five days before on October 14. The DJIA fell 3.81 percent on October 14, followed by another 4.60 percent drop on Friday, October 16. On Black Monday, the Dow Jones Industrials Average plummeted 508 points, losing 22.6% of its value in one day. The S&P 500 dropped 20.4%, falling from 282.7 to 225.06. The NASDAQ Composite lost only 11.3%, not because of restraint on the part of sellers, but because the NASDAQ market system failed. Deluged with sell orders, many stocks on the NYSE faced trading halts and delays. Of the 2,257 NYSE-listed stocks, there were 195 trading delays and halts during the day.[2] The NASDAQ market fared much worse. Because of its reliance on a "market making" system that allowed market makers to withdraw from trading, liquidity in NASDAQ stocks dried up. Trading in many stocks encountered a pathological condition where the bid price for a stock exceeded the ask price. These "locked" conditions severely curtailed trading. On October 19, trading in Microsoft shares on the NASDAQ lasted a total of 54 minutes.
The Crash was the greatest single-day loss that Wall Street had ever suffered in continuous trading up to that point. Between the start of trading on October 14 to the close on October 19, the DJIA lost 760 points, a decline of over 31 percent.
The 1929 Crash was a worldwide phenomenon. The FTSE 100 Index lost 10.8% on that Monday and a further 12.2% the following day. In the month of October, all major world markets declined substantially. The least affected was Austria (a fall of 11.4%) while the most affected was Hong Kong with a drop of 45.8%. Out of 23 major industrial countries, 19 had a decline greater than 20%.[3]
Dot com burst of 2000: The 5 February 2000 and 1 July 2000, solar eclipse brought another crash:
Over 1999 and early 2000, the Federal Reserve had increased interest rates six times[8], and the economy was beginning to lose speed. The dot-com bubble burst, numerically, on March 10, 2000, when the technology heavy NASDAQ Composite index[9] peaked at 5,048.62 (intra-day peak 5,132.52), more than double its value just a year before. The NASDAQ fell slightly after that, but this was attributed to correction by most market analysts; the actual reversal and subsequent bear market may have been triggered by the adverse findings of fact in the United States v. Microsoft case which was being heard in federal court. The findings, which declared Microsoft a monopoly, were widely expected in the weeks before their release on April 3.
One possible cause for the collapse of the NASDAQ (and all dotcoms) were the massive, multi-billion dollar sell orders for major bellwether high tech stocks (Cisco, IBM, Dell, etc.) that happened by chance to be processed simultaneously on the Monday morning following the March 10 weekend. This selling resulted in the NASDAQ opening roughly four percentage points lower on Monday March 13 from 5,038 to 4,879—the greatest percentage 'pre-market' selloff for the entire year.
The massive initial batch of sell orders processed on Monday, March 13 triggered a chain reaction of selling that fed on itself as investors, funds, and institutions liquidated positions. In just six days the NASDAQ had lost nearly nine percent, falling from roughly 5,050 on March 10 to 4,580 on March 15.
Another reason may have been accelerated business spending in preparation for the Y2K switchover. Once New Year had passed without incident, businesses found themselves with all the equipment they needed for some time, and business spending quickly declined. This correlates quite closely to the peak of U.S. stock markets. The Dow Jones peaked on January 14, 2000 (closed at 11,722.98, with an intra-day peak of 11,750.28 and theoretical[10] peak of 11,908.50)[11] and the broader S&P 500 on March 24, 2000 (closed at 1,527.46, with an intra-day peak of 1,553.11);[12] while, even more dramatically the UK's FTSE 100 Index peaked at 6,950.60 on the last day of trading in 1999 (December 30). Hiring freezes, layoffs, and consolidations followed in several industries, especially in the dot-com sector.
The bursting of the bubble may also have been related to the poor results of Internet retailers following the 1999 Christmas season. This was the first unequivocal and public evidence that the "Get Rich Quick" Internet strategy was flawed for most companies. These retailers' results were made public in March when annual and quarterly reports of public firms were released.
By 2001 the bubble was deflating at full speed. A majority of the dot-coms ceased trading after burning through their venture capital, many having never made a net profit. Investors often jokingly referred to these failed dot-coms as either "dot-bombs" or "dot-compost" or dot-shells.
Global Financial crisis of 2008/09 – Total eclipse on 1 August 2008
On September 16, failures of large financial institutions in the United States, due primarily to exposure of securities of packaged subprime loans and credit default swaps issued to insure these loans and their issuers, rapidly evolved into a global crisis resulting in a number of bank failures in Europe and sharp reductions in the value of equities (stock) and commodities worldwide. The failure of banks in Iceland resulted in a devaluation of the Icelandic Krona and threatened the country with bankruptcy. Iceland was able to secure an emergency loan from the IMF in November.[6] In the United States , 15 banks failed in 2008, while several others were rescued through government intervention or acquisitions by other banks.[7] On October 11, 2008, the head of the International Monetary Fund (IMF) warned that the world financial system was teetering on the "brink of systemic meltdown".[8]
The economic crisis caused countries to temporarily close their markets.
On October 8, the Indonesian stock market halted trading, after a 10% drop in one day.
The Times of London reported that the meltdown was being called the Crash of 2008 and older traders were comparing it with Black Monday in 1987. The fall this week of 21 percent was not as bad as the 28.3 percent fall 21 years ago. But some traders were saying it was worse. “At least then it was a short, sharp, shock on one day. This has been relentless all week.”[9]. Business Week also referred to the crisis as a "stock market crash" or the "Panic of 2008."[10]
The Black Week: Beginning October 6 and lasting all week the Dow Jones Industrial Average closed lower 5 out of 5 sessions. Volume levels were also record breaking. The Dow Jones industrial average fell over 1,874 points, or 18%, in its worst weekly decline ever on both a point and percentage basis. The S&P 500 fell more than 20%.[11] The week also set 3 top ten NYSE Group Volume Records with October 8 at #5, October 9 at #10, and October 10 at #1.[12]
It has been noted that recent daily stock market drops are overall nowhere near the severity experienced during the last stock market crash in 1987.[13] Others have suggested that the media is manipulating and over-inflating stock market drops and calling them "crashes" in order to create the perception of a great depression.[14][15]
After having been suspended for three successive trading days, i.e. October 9, October 10, and October 13, the Icelandic stock market reopened on 14 October, with the main index, the OMX Iceland 15, closing at 678.4, which corresponds to a plunge of about 77% compared with the closure at 3,004.6 on October 8. This reflects the fact that the value of the three big banks, which form 73.2 percent of the value of the OMX Iceland 15, had been set to zero.
On October 24, many of the world's stock exchanges experienced the worst declines in their history, with drops of around 10% in most indices.[16] In the US , the Dow Jones industrial average fell 3.6%, not falling as much as other markets.[17] Instead, both the US Dollar and Japanese Yen soared against other major currencies, particularly the British Pound and Canadian Dollar, as world investors sought safe havens. Later that day, the deputy governor of the Bank of England , Charles Bean, suggested that "This is a once in a lifetime crisis, and possibly the largest financial crisis of its kind in human history."[18]
CONCLUSION & UNDERSTANDING SOLAR ECLIPSE:
If the market moves down sharply within 25 days of total solar eclipses, we normally see recovery quite fast within six months. However, if the recovery fails to occur within one month after the solar eclipse and markets keep moving up, there is usually a big crash within six months or before then next solar eclipse. Data from eclipses in the last hundred years reveals a similar pattern, and last week’s eclipse should therefore bring about a mini-crash within the next two to three weeks. Indeed, this will be healthy for the markets, and we shall be on the way to achieving our dream prediction of the DOW reaching 38000, the Shanghai 18000 and the BSE 41000.
If the stock market doesn’t fall within the next four months, then my prediction of markets hitting new highs will not come true. On the contrary, we may actually see a worse correction than was experienced in 1929, 1987, 2000 and 2008 two weeks before lunar eclipse of 31 December 2009 or four weeks before Jan 2010 Solar annular. I am a devout student to astrology and nature, and I shall take my time to guide you about this. Strange as it may sound, a mini crash or weak trend in the market during the month of August will make me a very happy man because it will mean a major step towards fulfillment of our prediction. I hope that everyone is clear and understands what I have predicted.
THIS WEEK’S FINANCIAL NEWSLETTER, 27TH TO 31ST JULY
GOLD/SILVER
There will be a major downward trend in gold prices from 4th of August, followed by weakness that will persist for quite a while in gold and silver prices, therefore trade carefully. We have been concerned about metals for the past few months and something’s up since we don’t predict just for fun. I know that a large metal community follows my work, and I am also aware that if gold doesn’t remain weak for the next one year, my reputation could suffer greatly because those who have been following my work believe and respect our longer term predictions 100%.
This week the trend in metals will remain uncertain. There will be some weakness in gold and silver on Monday, followed by some recovery from Tuesday onward. There will be a false trend on Thursday and Friday and I therefore don’t recommend trading on both days as they are astrologically negative. Indeed, decisions made during both days are likely to be proved wrong. Each month I warn people to avoid financial, business and relationship decisions whenever the Moon gets into Scorpio. Each month, the Moon comes into the house of Scorpio for sixty hours, and this is the most negative time for making any kind of decisions.
Conclusion – Those who are short in metals for the medium term can hold their position. New traders can wait and watch, but one can sell before 4th August. On the other hand, long term investors should get away from positions in metals and metal stocks.