World stock indices were again mixed last week, with the U.S., Japan, England, and Switzerland posting new highs for the years. However, other countries that we track did not make new highs.

In Europe, the German DAX index got as high as 3629.60 on Friday before closing on the low of the day at 3578.70. This was considerably off from the high of the year which occurred at 3676.90 on September 5, which was within our big geocosmic cluster period of August 21-September 10. The same was true with the Netherlands AEX index. The yearly high occurred in a double top formation on September 4 and 9 as prices hit 344.20. Friday’s high of 340.70 was slightly off, and the market closed at 334.80. The London FTSE made a new yearly high of Wednesday, September 17, at 4329.60, but sold off somewhat sharply to close the week at 4257. The strongest European index of all that we track was the Swiss stock market, which recorded a new high on Friday at 5445.20. But like the other European markets, it too sold off quite a bit into the close. It ended the week at 5387. Most of these markets looked technically weak by Friday’s close, with various sorts of oscillator divergences. But, as we have seen throughout this Mars and Mercury retrograde period, such technical sell signals have not proven to be reliable. The markets continued to rally in spite of the internals showing signs of weakness.

In the Far East, the Japanese Nikkei index continues to be the stellar performer. After dropping to a 22-year low at 7604 on April 28, the Nikkei soared to a new yearly high of 11,160 on Friday, before settling back to close at 10.938. The Hang Seng Index in Hong Kong could only reach 11,205 on Friday, slightly below its yearly high of 11,242 back on September 9 (and within our geocosmic reversal zone). It ended up closing the week at 10,968, with bearish looking technicals. The Australian All Ordinaries index made a double top to its yearly high on Friday, reaching 3249.40, less than one point off the high of 324980 on September 9. But then it sold off and closed on the low of the day at 3223.40. A double top is a bearish chart pattern. To remain bullish, the market has to take that high out very soon.

But most of the week’s stock market news focused on the United States, where all the major indices posted new highs for the year on Friday. The Dow Jones Industrial Average soared to 9686, and closed the week at 9644.80. The NASDAQ Composite was over 1900 for the first time since March 2002. The S&P futures also traded to new yearly highs on Friday.

The question on most financial astrologer’s mind is probably, "What happened to the expected reversal between August 21-September 10?" Or, why didn’t the Jupiter-Uranus opposition of August 29 coincide with a stock market reversal within 12 trading days (ended September 17), as the history of this signature suggested? It is a valid question, and it brings to light the reason why astrology must be used in concert with other market studies to be effective as a trading tool.

First of all, one must understand that the correlation of geocosmic signatures to important market turns is a study in probabilities. The correlation of Jupiter-Uranus to primary or greater cycles in the U.S. stock indices has an 82% correlation, given an orb of 12 trading days. That is extremely high – the highest of any geocosmic signature in effect this year. But it is not 100%. Applied to the U.S. (and Japanese and Swiss stock indices), this signature will be judged a failure as a stock market timing reversal in this instance. The judgement is still out in the other markets, which witnessed highs that so far have held within this 12-day orb.

But more importantly, one must understand the concept of cycles, and especially primary cycles. Very briefly, primary cycles in U.S. stocks tend to last 13-21 weeks, as measured from trough to trough. These cycles are usually broken into three phases that last 5-7 weeks each or two phases lasting 7-11 weeks each, or both. The first phase (early part) of any cycle is almost always bullish, especially if the underlying trend has been up for the previous cycles of the same type. Now the U.S. stock market – particularly the S&P – was in the early phases of a new primary cycle, having just bottomed August 6. The period surrounding the Jupiter-Uranus opposition of August 29 thus occurred in the early stages of this new primary cycle, which is almost always bullish. The probability of a primary cycle crest forming here was not very high, according to cycles’ theory. Had it been late in the cycle, when a primary cycle crest or trough would more likely be due, the probabilities would have been much higher.

Now, let’s look at this Jupiter-Uranus opposition period in reference to other markets whose primary (or greater) cycle was due. Here we will see the power of this signature in its full force. Take the U.S T-Bond market for instance. The week of August 29 was the 23rd week of the primary cycle. It was late. September 1 was also the start of the 18th month of an 18-month long-term cycle. And what happened? The nearby contract made a low of 103/28 on September 2, the very next trading day after the Jupiter-Uranus opposition. This was the end of the very sharp decline from the all-time high of 123/02 registered on June 16. And since that low, the T-Bonds have rallied all the back up to 109/15 as of Friday, and are still rising.

The same thing happened with the Euro (and other European) currency against the U.S. Dollar. Again, it was very late in the primary cycle, and also the 13.5- and 26-month cycle lows were due. The time band for all of these cycle lows was in effect as Jupiter formed its opposition to Uranus. And again the market turned right around from a low that formed just 2 trading days after the aspect, at 1.0732 in the nearby futures. Since that time, the Euro has advanced to a high of 1.1358 as of Friday, up nearly 6% since the aspect, and consistent with both the history of this geocosmic signature and the phase of the primary (and greater cycle) that was in fact due. So, the point is to know where you are within a cycle. If you are at a point where an important cycle top or bottom is due, then the geocosmic signatures will be a great aid in timing that turn. But if a market is not in a time band when such a cycle would ordinarily be due, it may appear as if the signature failed. It didn’t fail. You and I may have just been looking at the wrong market, at a market whose time for a major reversal was not yet ideally in effect.

For this week, Mercury will turn direct on September 20 and Mars will do the same on September 27. Thus we can expect a week that will highlight the principles of these two planets. Mars, as many know, is given to great impatience and quickness to act. It can be war-like. Mercury is the principle of communication, and like Mars, also tends towards impatience. Thus we can expect a very skittish market, one that reacts quickly to words of leaders that are spoken in haste and even anger. As traders, we must also learn to either be patient with our positions, which may seem to get rocked quickly back and forth ebtween bullish and bearish. Or we must continue to trade very short-term, learning to take quick and possibly even smaller profits than usual. Mars turning direct on September 27, and Venus squaring Saturn on September 25, are both Level 1 types of signatures (the strongest correlation to reversals in U.S. stock indices). Thus it is still possible for a crest of some type to form in the U.S. stock indices, from which a corrective decline follows. In fact, with every week that passes in which the market makes a new high, the probability increases that a sharp correction will soon occur. And when it does, the probability is high that the decline will last 4-12 weeks, and be between 8-20% off the high that preceded it. The entire corrective decline is due to end no later than December 19. That means the high has to unfold at least 4-12 weeks before this date. My guess is that it will happen anytime between now and late October. Many ask what type of event would cause such a decline? We never know for certain. But Israel’s insistence on removing Yasser Arafat could certainly do it. Israel made the statement under Mercury and Mars retrograde, then retracted it under the retrograde. Let’s see what happens as these two planets turn direct, with Mars – the planet of potential war - so close to the Uranus, the planet of potential extremist activity.

Pre-publication orders for the Forecasts for 2004 are now being taken. For discounts on this book ordered prior to October 1, please go to www.mmacycles.com.

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.