This is truly a retrograde period in terms of how world stock indices are behaving. Some indices are strong, some are very weak, and others are trying to decide which way to go as they vacillate between bullish and bearish nearly ever other day.

In the Far East, the Australian All Ordinaries Index advances to its highest level since August of last year, as it reaches 3142.30 on Friday. It closed strong too, just slightly off those highs at 3135.70. This is rather remarkable considering that just recently, on March 13, it was trading at its lowest level since 1998. The Hang Seng stock index of Hong Kong also started the week off strong, right near its highest level in the past year, at 10,291. But for the remainder of the week, it sold off, closing at 9945. And in Japan, the Nikkei Index was weak all week, falling to a low of 9224 on Thursday, and closing at 9327. This is off considerably from its 10,070 high that formed on July 10. The All Ordinaries and Hang Seng indices look like they are near an important top, while the Nikkei an important bottom, as we move towards the full moon early this coming week.

In Europe, none of the indices we track made new multi-week highs last week. Nor did they undergo significant declines. The German Dax index closed at 3332, up slightly from the weekly low of 3299.80 on Thursday. The London FTSE fell to 4044.90 on Wednesday, but then rallied smartly to 4160.70 on Friday, almost eclipsing its recent high of 4183 registered on July 28. Both the Swiss stock index and the Netherlands AEX drifted downwards to a weekly low on Thursday at 4961.90 and 305.70 respectively. That may have been a major cycle trough in each, as our technical momentum levels have fallen from overbought to neutral.

In the United States, the Dow Jones Industrial Average dropped slightly below 9000 during trading hours on Wednesday. That was the first time in a month it broke under 9000. But it immediately bounced back above to close the week at 9191.10, right at the high of the day on Friday. So for the past month or so, the DJIA trades in a congestion zone between 9000-9350. But the NASDAQ Composite just continued falling all week, and closed at 1644, just slightly above the weekly low of 1640.90.

Mars retrograde in Pisces represents dynamics of opposite types. Whereas Mars is assertive and possibly combative and aggressive, Pisces is passive and tends towards retreat. When Mars is retrograde, there is difficulties encountered in sustaining activities that are initiated. Pisces has the wish that everything will work out for the good, or the fear that everything will fall to ruin. And so it is reflected in the marketplace – and elsewhere - that trends start to reverse but are quickly snuffed out, or trends fail to develop at all and prices simply flail between the forces of hope and fear. In the T-Bond and T-Note markets for instance, there has been a precipitous decline in the past month. As recently as late June, interest rates and mortgage rates were at 40+ year lows. But then the trend changed, and rates rose sharply (especially in the U.S.A.) and bond prices fell. Refinancing of homes suddenly came to a screeching halt, and that had provided the capital that driven the economy in the past year. Housing, and the spending capital it provided through refinancing, was the last “bubble” from the late 1990’s that still existed. But it broke. And yet hope springs eternal with Mars in Pisces, and traders kept trying to look for signs that it was oversold and would bounce back. But every rally in the T-Bond and T-Note market is short-lived. It is snuffed out.

This is one of the ways we see Mars retrograde in Pisces working in the marketplace these days. This retrograde phenomenon is in effect through September 27. It may become very strange indeed (for traders anyway) when Mercury also enters its retrograde period, August 28-September 20. Whenever Mercury, Venus, or Mars are in retrograde, you can pretty much throw technical analysis and pattern recognition studies out the window. They become highly unreliable. The rules don’t work any more, and least not with any degree of consistency as they do when these planets are all direct. Since the marketplace is but a reflection of human activity and collective psychology, the same is true with us as human beings. The rules don’t work the same. People do not behave according to their past scripts. They become more unreliable, hence unpredictable. In the case of Mars retrograde in Pisces, we get a heavy dose of passive-aggressive tendencies, the urge to do something forceful, but perhaps without the advantage of clearly thinking through what the possible results or reactions might be. Bravado and confidence suddenly give way to uncertainty and doubt. “What we were thinking?” is a question oftentimes asked during this type of combination.

In the major news stories of last week, we can see plenty of cases of Mars retrograde in Pisces, besides just the vast differences in various markets throughout the world that would normally trend in stride with one another. They didn’t do that last week. In California, for instance, the governor of the state is now facing a recall election, and popular movie star Arnold (“The Terminator”) Schwarzenegger enters the race. The Episcopal church elected their first openly gay bishop after clearing him of last minute accusations – and some Episcopal delegates walk out of a legislative meeting in protest. U.S. Attorney General John Ashcroft announces that he wants “…federal prosecutors to report on judges who don’t toe an increasingly inflexible line on sentencing, and bring more appeals against those (judges) considered soft,” according to Wednesday’s Wall Street Journal. The judicial field is in an uproar. And Palestinian leader Abbas calls off a summit meeting with Israel Prime Minister Sharon. What are these people thinking? And what will they say when they encounter a backlash, or results, that they hadn’t considered? Maybe they should ask Admiral Poindexter of the Darpa Unit of the Pentagon, who proposed a new futures contract on Terrorism the prior week when Mars started this current retrograde motion.

What is Mars retrograde in Pisces good for? It is good for helping people, for reaching out (Mars) and giving comfort and understanding (Pisces) to those who are uncertain and in doubt. It is a good time to listen to one another, but not to take things as absolute. Generally speaking, people do not mean what they really say, or they do not do what they really intend to do right now.

But even in the midst of Mars retrograde, we are soon to embark upon another overlapping period of a several Jupiter transits. Starting the week of August 18 and lasting through the end of the month, the Sun and Venus will conjunct Jupiter and all will oppose Mars and Uranus. If one thinks that “hope springs eternal” now, just wait another week. I think the stock markets might respond in kind with much “hope” during this period. There might be several big days in world stock markets. The DJIA may have more than one 200+ point days. But then the thought arises: What happens when all that Jupiter influence leaves at the end of this month, and we are left with both Mars and Mercury in retrograde at the same time for the following three weeks? It is a good time to be a short-term trader.

Announcements: For those interested in pre-ordering next years Forecasts for 2004 book, you may now do so. Information is available on our website at www.mmacycles.com. The pre-publication special price is in effect for only a very few weeks.

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Disclaimer: No guarantee as to the accuracy of this report is being made here. Any decisions in financial markets are solely the responsibility of the reader, and neither the author nor the publishers assume any responsibility at all for those individual decisions. Reader should understand that futures and options trading are considered high risk.