Tag Archives: Dow Jones Industrials

Mercury & Pluto at the Fed Announcement: Big Action for Stocks, the VIX, and the Dollar, Too!

In spite of the fact that one of our readers has dubbed the comments posted here on the Fed’s announcement today “the worst call out there”, it’s still interesting to see exactly what the markets actually did in the final hours of trading today– and to anticipate what the action in equities will look like tomorrow.

Throughout most of the trading day prior to the 2:00 p.m. announcement, stock prices were churning in a somewhat apprehensive market with a decidedly bearish bias.

But when the Fed announcement was released, it immediately became apparent that Mercury’s conjunction with the Fed Pluto was having exactly the kind of dramatic impact we had anticipated. The major market indices all rallied, breaking into positive territory and pushing to new heights by the end of the trading session.

Fed Indices Response
The S&P 500, the Dow Jones Industrial Average, and the NASDAQ Composite all rose after the Federal Reserve’s Open Market Committee made its announcement on June 18, 2014.

The S&P not only rallied, it also managed to hit yet another all-time record high by the time the closing bell on Wall Street rang. Note as well that both Gold and the Euro showed significant strength for the day.

It was also worth watching the VIX during the trading session. This measure of market volatility took a sharp plunge right after the Fed’s announcement, confirming the old “buy the rumor, sell the fact” adage– once the facts were known about the Fed’s intentions, a lot of the uncertainty that had roiled the market action earlier in the day began to fade away.

Fed Announcement VIX Response
The VIX reaction to the Fed’s announcement was quite dramatic.

In looking at the VIX chart, it’s worth observing that the index had already risen to the higher levels we had forecast last week as a potential response to Mercury’s retrograde passage over the cardinal axis. We’re still looking for more action in this Fear Index during the coming weeks, with a return to higher levels of volatility as we approach the July 4 Independence Day holiday.

This dramatic action in the VIX was further confirmation of the power of the Mercury/Pluto combination that made the timing for this event so noteworthy.

But even though the Mercury/Pluto action bore out the forecast, I had also looked at the Mars transit to the Fed chart and had assumed that the market’s reaction to the announcement would be “less than enthusiastic,” based largely on the activation of the Moon/Saturn midpoint in the Fed horoscope.

Things didn’t turn out that way.

We certainly didn’t see a negative reaction in equities during the remainder of the trading day. But Mars moves more slowly than Mercury, so the impact of its transit is likely to carry on a little longer. That’s one of the reasons why we’re still anticipating a pull-back in stock prices before the end of the week– and why our Gold-Plus Elite members at FinancialCyclesWeekly.com are planning to add to the short positions in our Model Portfolio before the market closes on Friday..

Remember, too, that the influence of the Federal Reserve goes far beyond just the price of stocks. The Fed’s announcements have a big impact on currencies, of course, which is why it was particularly interesting to see what happened to the dollar this afternoon:

Dollar Reacts to Fed
The U.S. Dollar Index had been trending lower before the Fed’s announcement on Wednesday afternoon, but as soon as the official word was released the Greenback started going through wild swings. Volatility remained high for the rest of the day, with the dollar pushing sharply lower.

 

These Markets Got Whacked By The Solar Eclipse

As we looked at the U.S. stock market in the weeks prior to yesterday’s solar eclipse, my analysis indicated that we were likely to see a sell-off between the peak of the Cardinal Grand Cross on April 23 and the solar eclipse on April 29, followed by a rebound into a modest rally right after the eclipse.

As it turned out, the pre-eclipse selling wasn’t quite as intense or as sustained as I had anticipated, but it did help define a support zone for the S&P 500, providing a springboard for a lively upward move. That bullish impulse is currently at play in the equities market — at least in U.S. stocks, where the Dow Jones Industrials closed at a new record high again today.

It’s important to note, however, that not all markets respond to eclipses in the same way.

In this case the Taurus solar eclipse actually brought some markets down fairly sharply, instead of giving them a boost like U.S. equities got recently.

What’s interesting to note is that the markets that started selling off instead of going into rally mode were in the part of the world that’s under the partial area of the shadow of the solar eclipse– Australia and Indonesia.

April 2014 Eclipse Path
The Path of the Solar Eclipse on April 29, 2014

Here are the trading charts that show these strong alignments at work in altering the market action just prior to and after the Solar Eclipse.

2014 April 29 Solar Eclipse Effect on All Ordinaries
The Solar Eclipse on April 29, 2014 had a strong impact on the All Ordinaries Index in Sydney, Australia.

 

2014 April 29 solar eclipse impact on Jakarta Stock Exchange
The Indonesian Composite Index on the Jakarta Stock Exchange started its sell-out as the April 29, 2014 solar eclipse approched.