By the time you read this week’s column, it will be a New Year, in the middle of the first decade of the new century. And as I have stated many times before, I think this may be the moist important decade of this new century.

On behalf of all of us at MMA, and the staffs of the 8 web sites that carry this weekly column in 6 different languages throughout the world, may you have a very joyous and prosperous New Year!

Review:

Last week’s report stated, “The bullish seasonality of this holiday period comes to an end this week. And as it ends, a very powerful – and potentially dangerous – Level 1 geocosmic signature takes place… Mars in a square aspect to Uranus can be an explosive situation, both figuratively and literally. It is considered an accident-like dynamic in astrology.” In retrospect, that was an understated description of the tragic reality the world experienced. The earthquake and Tsunami of December 26 in the Pacific Rim rank as the greatest natural disaster in history in terms of loss of human lives.

Although I did not specifically forecast an earthquake or Tsunami in this column, the Mars-Uranus signature of December 30-31 certainly has a dynamic that fits within the realm of such a possibility. It is especially apropos because Uranus (shocking, earthquakes) is in Pisces (the ocean, and tidal waves) through 2010, and Mars (accidents) is in a square formation (tension) to it. This particular aspect can have an orb of influence of up to two weeks. But the possibility of such a shocking event could have been (was) especially pronounced on December 26 in that region of the world, as it was the day of a full moon and Mars making its ingress into Sagittarius. As stated last issue, “Mars is now ingressing into Sagittarius, December 25 through February 6. Historically this has coincided with increased dangers and hostilities in the Middle East, especially in regards to Israel and her neighbors.” But the dangers during this period don’t have to be limited to just Israel and her neighbors, although we certainly see this geopolitical tension unfolding as well, especially with the increased insurgency attacks in Iraq.

For the record, page 55 of Forecasts for 2004 book stated: “December 30-January 2: fires, high winds, possible earthquakes or hurricanes.”

In terms of equity markets around the world, the end-of-the year seasonality kept most near their highs of the year, as expected. In Europe, the German DAX and London FTSE made new 2-1/2-year highs last week at 4272.20 and 4826.20 respectively, and closed not far from those highs. The Netherlands AEX matched its high of July 1, 2004 at 348.70 last week, but is still below the highs of earlier in the year. The same with the Swiss stock index, which rose to 5713 last week, a shade below the 5720 level of November 15, and well below levels of the first half of last year. Even though all these indices closed near their recent highs, there remains the case of Intermarket bearish divergence, as some made new yearly highs last week, and others did not. This is important given the fact that this is now a geocosmic critical reversal zone.

In the Pacific Rim, the Australian All Ordinaries index rallied to yet another new all-time high last week, reaching 4057, and closing at 4053. The Japanese Nikkei soared to 11,501 last Wednesday, its highest level since July, but still below its yearly high of 12,196 last April. The Hang Seng of Hong Kong got to 14,333 on Wednesday, which is virtually a double top to the 14,339 level of December 2. All of these indices closed near their highs of the week.

In America, the Dow Jones Industrial Average made a new 3-1/2-year high last week when it touched 10,868 on Monday. So did the NASDAQ Composite, as it hit 2182.40 on Thursday. And S&P futures made a new multi-year high on Friday, before all sold off into the close of the week, thus creating a solid case of intermarket bearish divergence, in a critical reversal zone. The Argentina Merval index also made a new decade high at 1408 last week as well.

In other markets, the Euro also made a new all-time high last week, and the Dollar fell to a new 20+-year low. But the Euro started to sell off on Friday, giving a bearish trigger for the coming week. Gold and Silver did not fare so well, as Gold fell to its lowest level in 3 weeks. Gold will generally follow the currencies (opposite the U.S. Dollar).

Short-Term Outlook:

Looking at past years, there are several instances where currencies rallied to new multi-year highs into the end of a year. In almost all cases, those rallies ended between the last week of the year, and the first two weeks of the New Year, and were followed by substantial declines. It will be interesting to see what happens to all of these markets next week, as the first trading day of the New Year is the midpoint of a current geocosmic cluster. A sharp decline in both stocks and currencies (vis-à-vis the U.S. Dollar) is possible, as suggested by these signatures.

The major geocosmic signature in effect is the Mars-Uranus waning square aspect of December 31. As stated last week, this signature “has a 77% historical correlation to primary or greater cycles within 13 trading days (and 64% correlation within 11 trading days). It also begins a series of signatures that lasts through January 13, making this a legitimate “cluster zone.” Thus, the holiday rallies may be coming to a screeching halt in the first few days of the New Year.”

Also next week we find Venus conjunct Pluto on January 3, and the Sun in a waxing square to Jupiter on January 7. Venus-Pluto signatures relate to issues of debt, which typically has a direct impact upon treasury and currency markets. It is another reason why I believe currencies may be close to a substantial reversal. This Sun-Jupiter is a Level 1 rated signature, and has a 67% correlation to primary or greater cycles in U.S. stock indices. Psychologically, it relates to the dynamic of over-estimation and exaggeration. Perhaps investors will realize that stock values are too high, and this period correlates with a primary cycle crest. If so, look for a rather sharp 2-5 week decline to commence, and the early part could contain rather big range down days.

On January 9, both Venus and Mercury leave the bullish sign of Sagittarius, and enter the more sobering and realistic sign of Capricorn for a few weeks.

Long-Term Thoughts:

Mars is now in Sagittarius, December 25 through February 6. Historically this has coincided with increased dangers and hostilities in the Middle East. Amidst such signatures, crude oil prices are vulnerable to sudden and sharp spikes up in price. Volatility may also be noted in both precious metals and equity markets. It is a dynamic of trying to do too much, of over-reaching, and a temptation to take great risks. Actions of leaders can be very bold and brazen, which can lead to unfounded boasts and then aggressive actions and confrontations. It would not be wise for leaders to goad one another into conflicts, for tempers can suddenly escalate out of control. On the positive side, this period can witness records being broken in sports, and it can coincide with many opportunities for fun and enjoyment. So the message is… enjoy yourself, but don’t take foolish risks. This is a time of potentially great danger but also great fun. For traders, there are apt to be large price swings, so this can be an extremely profitable – or dangerous – time for short-term trading, in almost all financial markets.

Announcement: Forecasts for 2005 books will remian available at $39.95 (plus $5.00 postage USA and Canada, or $12.00 elsewhere), while supplies last. These may be ordered through our website at www.mmacycles.com (click the banner on ORDERS or BOOKS). Or you can order via email at ordersmma@msn.com, or by fax at 1-248-427-1994, or by phone at 1-248-626-3034.

Disclaimer and statement of purpose: The purpose of this column is not to predict the future movement of various financial markets. However, that is the purpose of the MMA (Merriman Market Analyst) subscription services. This column is not a subscription service. It is a free service, except in those cases where a fee may be assessed to cover the cost of translating this column from English into a non-English language. This weekly report is written with the intent to educate the reader on the relationship between astrological factors and collective human activities as they are happening. In this regard, this report will oftentimes report what happened in various stock and financial markets throughout the world in the past week, and discuss that movement in light of the geocosmic signatures that were in effect. It will then identify the geocosmic factors that will be in effect in the next week, or even month, or even years, and the author’s understanding of how these signatures will likely affect human activity in the times to come. The author (Merriman) will do this from a perspective of a cycle’s analyst looking at the military, political, economic, and even financial markets of the world. It is possible that some forecasts will be made based on these factors. However, the primary goal is to both educate and alert the reader as to the psychological climate we are in, from an astrological perspective. The hope is that it will help the reader understand these psychological dynamics that underlie (or coincide with) the news events and hence financial markets of the day.

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.