Merriman Weekly column 4/30/12

http://www.mmacycles...april-30,-2012/
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This is a crazy world and a crazy time we live in.


On Thursday, after USA markets closed, the S&P ratings agency downgraded Spain’s credit rating for the second time this year. It is, of course, completely consistent with the forthcoming Uranus-Pluto waxing square aspect that makes its first of seven passages on June 24, 2012. They are close enough to this aspect now to have an influence, and have been since late July 2011 when the USA’s own Triple AAA credit rating was downgraded a notch for the first time ever. So how did stock markets around the world react? Well, at first they sold off modestly. But then many – including the USA – continued to rally to new multi-week highs. Likewise the USA Treasuries continued to rally near their all-time highs. Go figure.


Well, wait minute. Maybe you don’t have to go figure. Maybe it won’t do any good to go figure, because when Uranus is dominant, no amount of logic or rational thought will work. If anything, Uranus tends to be illogical and irrational, albeit very innovative and unconventional. It pertains to the unexpected, and it probably has more to do with “contrary thought and behavior” than any other planetary dynamic. We are going to see a lot of that in the next three years. Come to think of it, we have already seen a lot of that since 2008 when Uranus first came into opposition to Saturn, setting off the 2008-2015 Cardinal Climax. This is just the next layer of this ongoing Twilight Zone saga.


I think it is quite safe to say there will be more downgrades of various nations’ credit ratings in the next three years. Maybe equity and Treasury markets will continue to rally on such great news. But I wouldn’t bet on it. More likely than not, in my opinion, is that eventually these downgrades will have a chilling effect on many financial markets. After all, the same thing happened in 1873-1878, which was the longest economic depression in the USA history, and the last time Uranus was in a waxing square with Pluto. That is, the USA stock market was making all-time highs, and staying quite close to those highs until 1876, when the Uranus-Pluto square commenced its first exact passage. The country was in an economic depression but the stock market was strong. In the next two years, however, as the Uranus-Pluto square was fully in force, the stock market finally collapsed. Irrationality and illogic finally caved in to another Uranus dynamic: panic and loss of control. It doesn’t have to be negative, but when it is, that is how it often materializes. Things are just very different, and we have to learn to adjust quickly.


Speaking of illogic and irrationality, many of the stock markets of the world were under pressure for the first half of last week. On Wednesday, April 25, The NASDAQ Composite was at its lowest level since March 8, in anticipation of a poor earnings report about to be released by Apple. But in typical Uranus fashion, Apple’s earnings were anything but poor. They were spectacular and stock indices all around the world shot up sharply. By Friday, the Dow Jones Industrial Average had reached 13,266, only 31 points off its three-year high of 13,297 achieved on April 2. In Europe, the German DAX and Netherlands AEX indices were at their lowest levels since December-January on Monday, April 23. But that was not the case in the Zurich SMI or London FTSE. All of these markets rallied nicely into Friday, setting up an excellent case of intermarket bullish divergence signals, a condition which also exists in the USA as well as Asia and the Pacific Rim. The biggest losers of last week were in Argentina and Moscow, whose stock indices continued to plunge all week. In Argentina, the Merval index is about to break below its lows of October 4.


Gold and Silver had an interesting week too. Both were depressed into mid-week. Silver fell to 2992, its lowest level since January. Gold fell to 1623.60, which was above its recent low on our April 4 critical reversal date at 1613. Thus this was another case of intermarket bullish divergence, and both metals rose smartly into the end of the week, suggesting that their primary cycle lows may be in. There are a couple of resistance areas that have to be surpassed to confirm this bias, but we will cover those in our weekly subscription reports due out tomorrow.

TM