Had an interesting experience at the first Forecasts for 2004 talk that I am giving this year. It took place last Saturday evening in Ann Arbor, Michigan, to a group that I have given this talk to over the past three years. As I walked into the lecture hall, one of the attendees from last year approached me and stated that I did a disservice to a poor old lady last year when she asked about her stock mutual fund. Apparently I mentioned that I could not recommend stock mutual funds at this time (the beginning of 2003). This gentleman thought that I "blew it," because the greater U.S. stock market was up a whopping 25% last year!

Needless to say, his confrontation took me aback. I am not used to being confronted in a public forum. But I thought back to that speech of over a year ago, and I do remember the woman who asked the question, and I do remember telling her I cannot advise being in stocks as we entered 2003. But then I remembered what I did recommend, and which this gentleman failed to mention. And so I said to him, in front of the crowd that was gathering to see how I would respond: "You are right. I did not recommend to this woman that she stay in stock mutual funds. But do you remember what I did recommend to her instead?" He thought a moment, and couldn’t remember, until I reminded him. "I recommended that she place her investable monies in a money market mutual fund based in Euros, Australian Dollars, and Canadian Dollars, and about 10-20% of those same funds in Gold mining funds."

"Oh, yes," he said. "I do remember. I forgot that you did recommend that." And in retrospect, how did they perform last year? Well, in December 2002, when the speech was given, the Euro was trading at about .9700, the Australian Dollar about .5400, and the Canadian Dollar about .6200. Today there are trading around 1.2800, .7700, and .7850 respectively. Or, one could say they are now up 33%, 42%, and 26% respectively, not including the 2-5% interest they would have accrued being in a money market account. And how have Gold mining stocks done? Well, the XAU, the leading index of Gold and Silver mining stocks, was trading around 70.00 last December. Today it is about 110.00, or up 57%.

What is the purpose of sharing this story? Well, it is not so much to point out how great I am (that’s a topic of debate itself!). But merely to point out the obsession with stocks being the only vehicle in which to invest. Even though I recommended foreign currencies and gold mining stocks last year as my preferred investment vehicles, and I did not recommend basic equities, all the common person remembers is the lack of recommendation on equities. It doesn’t always matter that what you did recommend instead of equities outperformed equities. And why did I recommend foreign currencies and gold mining stocks? Because Jupiter was in Leo and Virgo (favorable for Gold) and Saturn was in Cancer, on the U.S.A. Venus-Jupiter conjunction (not favorable for the U.S. Dollar and equities). It retrospect, the year was unfavorable for U.S. stocks until March. But then U.S. stock indices rallied strongly afterwards, although not as strongly as foreign currencies and Gold Mining stocks for the year.

Which now brings us to today’s markets. As stated last week, "Not only was (the stock market) rally typical of end-of-the-year markets, but it also fits with the multiple Jupiter signatures coming up this next week. On Sunday, Jupiter will turn stationary retrograde, and on January 9, the Sun will make its waxing trine to Jupiter. In astrology, Jupiter is considered the planet of hope and optimism. When financial markets rally into a time band consisting of more than one Jupiter signature, it oftentimes represents the "climax" of that optimism. Consequently, the euphoria grasping investors at this time may be peaking anytime in the next few sessions. This doesn’t mean that the final top to this primary cycle is coming up under these Jupiter transits (but it might). It simply means that at least a temporary top may be forming." Indeed, the U.S. and world stock indices rallied strongly last week throughout the Jupiter signatures that were in effect. But by Friday, the rally was over, and the DJIA fell 135 points, it biggest down day in several weeks. Friday’s employment report showed much weaker gains than expected, suggesting that job growth may be a problem in this recovery.

But this week we could begin to see some more changes of investor sentiment. Planets changing signs rules the concept of "investor sentiment". On Wednesday, January 14, Mercury (buying and selling) will leave the optimistic and risk-oriented sign of Sagittarius, and begin a 3-week trek through the much more conservative and cautious sign of Capricorn. On the same day, Venus will leave the futuristic and independent sign of Aquarius, and begin a 3-week trek through the much more emotional and sensitive sign of Pisces. The last few weeks have seen a very positive stock market throughout the world, which fits with the euphoria of Sagittarius and Aquarius. It is doubtful that the same degree of euphoria can be maintained in world equities during the period that these two planets enter the more worrisome signs of Capricorn and Pisces.

In addition to the ingress of Mercury and Venus, Uranus has also just left Aquarius for it’s 7-year journey through Pisces. On Thursday, Venus will conjunct Uranus in 0 Pisces. The Venus-Uranus conjunction is a Level 1 type of geocosmic signature (the strongest correlation to reversals, according to The Ultimate Book on tock Market Timing Volume 3: Geocosmic Correlations to Trading Cycles). Within 9 trading days, it has a 68% historical correlation to primary or greater cycles. Within 4 trading days, there is a 76% correlation to 4% or greater reversals from an isolated high or low in the Dow Jones Industrial Average.

So once again, we are about to enter a period where geocosmic signatures suggest a multi-week decline in U.S. and world stocks could begin. Yes, I am aware that we have been looking for such a decline in 3-4 other instances since late August, and so far each decline has been limited to two weeks or less. We got corrections in the periods we were looking for, but we did not get that 8-20% decline that is still due by the end of March. Perhaps this will be the start of such a decline. Unfortunately we will not know until certain technical conditions are also met, such as the break of the 25-day moving average, something that has not happened in two months. But this is the value of astrology and the limitation of it too. It can identify with great accuracy when reversals are likely to happen. But the extent of that reversal requires 1) confirmation by certain technical studies that occur within 2) certain phases of the cycles of each market. With stocks, we know an intermediate-term 50-week cycle crest is due. We also know that the "Pre-Presidential Election Year Cycle Trough" is due, probably by March, and no later than May. Whether the top occurs with this geocosmic reversal zone, or the one coming up in late January, early February, or even one after that, cannot be determined yet. But it is due, and once it is in, a 3-12 week decline to the primary, 50-week, and "Pre-Presidential Election year Trough" will likely commence. And that will be a buying opportunity.

On the "News of Interest" front last week, a front page headline in Thursday’s Wall Street Journal stated "The IMF (International Monetary Fund) said surging U.S. deficits will drive up interest rates world-wide by up to a percentage point, hampering growth." Shades of the downside of the Saturn-Pluto cycle that has been discussed several times in this column (in effect 2002-2020). You see, I am not the only one who is concerned about the rapidly rising U.S. deficit and its potential to cause a major recession in the last half of this decade. The major difference, however, is that I see this possibility from the forthcoming T-square of Saturn-Uranus-Pluto in late mutable, early cardinal signs. The last time we saw that configuration was in 1930-1931.

I will be lecturing in Melbourne, Australia over the next two weeks. If I am able to write this weekly report and send it out, I will. Otherwise, please know there is a possibility that there will be no updates of this column for the next two weeks. If you are in Australia and would like to attend the MMA Cycles Market Timing Seminar, please contact "Trading Edge" at 61-39-879-8155, or email judy@tradingedge.com.au. It looks like it will be a good-size group. The following week I will be a keynote speaker at the Federation of Australian Astrologers biennial conference, at the University of Melbourne. For more information, please go to www.AstroSynthesis.com.au, or contact Brian Clark at 61-3-9419-4566. I will be presenting the Forecasts for 2004 speech at the opening of this conference.

For those who are interested, the Forecasts for 2004 book is now completed, and received back from the printer today (Friday, December 12). For those who have pre-ordered, you should be receiving it this coming week. If you wish to order, please go to our ordering pages. However, we cannot guarantee you will receive any new orders before Christmas, though we will try our best. We also cannot guarantee that we will not run out of books in the next few weeks, for orders in the past two weeks have far exceeded our expectations. We will run out this year, and there will not be a reprint. It should be an interesting year, and there is a great deal of information (forecasts) on the 2004 U.S.A. presidential election, as well as various stock and financial markets.

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.