US government shutdown hammers markets

(25 December 2018) The US government shutdown is just the latest development to sideswipe the stock market.  The month of December has seen the Dow lose 4000 points as investors are re-evaluating their risk appetite against the background of an increasingly chaotic White House.   Markets fell in early December as hopes dimmed for a US-China trade deal and then selling accelerated last week after Fed Chair Jerome Powell issued an unexpectedly hawkish statement about rate hikes in 2019.  Then on Friday the US government shut down due to a disagreement over funding for the US-Mexico border wall, a key Trump election promise.  President Trump has now made a bad situation worse through his repeated criticisms of the Fed Chair Powell and his stated desire to fire him.  

All this chaos and uncertainty was too much for many investors as they rushed to the exits rather than waiting for a happy ending to the latest episode of The Trump Show.  In last week's post, I mistakenly thought there was a plausible case for some upside following Wednesday's Fed meeting.    However, I didn't have high confidence in that forecast given the presence of some significant offsetting energies.  The Full Moon of Saturday the 22nd was a potential red flag in that respect as Full Moons tend to coincide with periods of market weakness. 

But now that the Full Moon is behind us, what are the prospects for the stock market?  In the short term, a lot will depend on when the US government shutdown will end. While I haven't made a thorough study of US government shutdowns, one astrological pattern I have noticed is that Mercury tends to be destabilized at the time of the shutdown.  One main reason is that Mercury rules the 10th house (Virgo) of government in the USA national horoscope (6.30 p.m. 4 July 1776).  When it is afflicted by transit, government is more likely to be dysfunctional in some way. 

We can see that Mercury (3 Cancer) is currently conjoined by transiting Rahu (North Lunar Node).  Rahu is often a disruptive influence as it is associated with interruptions of the status quo and the seeking of new solutions, irrespective of consequences.  As it happens, we have another disruptive influence now, as Uranus (4 Aries) forms a 90-degree alignment with Mercury as well.  In Western astrology, Uranus has similar symbolism of sudden changes and upsets, especially when in hard (90,180) aspect to other planets.  So that is a double dose of disruption and dysfunction for Mercury-related activities such as government.  And we should note that since commerce and stock trading are also in the purview of Mercury, its affliction here aptly reflects the current sell-off in the markets.

We can also see that Mars, the planet of conflict and frustration, was front and center at the time of the shutdown on Friday night as it exactly squared its natal position at 0 Gemini.  The fact that Saturn (16 Sagittarius) is now opposite all of those Gemini planets, especially Jupiter, is not helpful for any speedy resolution to the entrenched animosity in Washington. 

By way of comparison, we can see some similar patterns at the time of the famous Clinton-Gingrich shutdown in November 1995.  Amazingly, the Lunar Nodes and Uranus are again aligned with Mercury.  This time Rahu is square to Mercury within one degree while Uranus is exactly opposite Mercury.  The 1995 shutdown only lasted for five days but marked the beginning of a very dysfunctional period in US politics as Republicans sought to undermine the Clinton presidency at every turn.  Indeed, there was a second shutdown just four weeks later that lasted three weeks.

But while there are some planetary correlates for a shutdown, it is less clear how to spot a resolution.  The 1995 shutdown ended as the Sun and Mercury aligned with Rahu and hence with natal Mercury.  The apparent completion of the Rahu-Mercury energy by the Sun and Mercury could be seen as positive, although there were no obvious benefic aspects in play.  Similarly, the end of the second shutdown on January 6, 1996 lacks clarity.  Mars had just moved past its opposition aspect to Mercury a day or two prior as if to signal a level of maximum frustration.  Once it moved past Mercury, the shutdown ended.  I would have expected some benefic transit involving Jupiter or Venus to symbolize a level of peace and cooperation between the two sides.  But it's not really here.

This time around we can spot an interesting parallel with Mars.  Mars will align with Rahu and that natal Mercury on Wednesday and Thursday this week.  On the face of it, this is a negative influence on the USA's Mercury which is likely to translate into more downside in the markets.  And yet if the 1995-6 shutdown patterns hold true here, Mars will only have move a little past Mercury for the negativity to diminish and for a resolution of the shutdown to occur.  This could mean a resolution is possible as early as Thursday-Friday this week, although I would not say I had high confidence in that expectation.  It seems more likely that next week's alignment of Venus and Mercury with Rahu-Mercury is a safer and more prudent position to take for timing of the end of the government shutdown. 

In market terms, I would think we could see additional declines Wednesday but Thursday looks more positive, even if it may not signal a formal shutdown deal.  The upcoming Jupiter-Neptune alignment in January suggests that a significant rebound is approaching.  All of which suggests we are probably getting very close to a bottom in the markets, even if it proves temporary.

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