WELCOME TO THE MONKEY HOUSE: RIDE THE ROLLER COASTER:

What happened this week so far in the equities is far more frightening than the big drops in the stocks last week. Monday the DOW went up 1,200 points, the single biggest point gain in history up to that point. Tuesday the FEDS lowered interest rates 50 basis points as an emergency measure supposedly to stimulate the stocks and ensure a quick recovery. At first the stocks went up momentarily, but soon collapsed again and closed down another 700 points, giving back much of Monday’s gains.

The markets went up more than 1,200 point on Wednesday. Some believe it was a delayed result of the FEDs cutting interest rates, others that it was because Biden took the wind out of Bernie’s sails and Wall Street breathed a sigh of relief. As I point out below, the fundamentals underneath this market are nowhere near as strong as many would like to pretend. Remember, the markets do not move on real fundamentals or even on reality. They react to the psychological atmosphere that exists. Right now we are all scared. Many fear the viral pandemic. Many others fear the political pandemic. And it really doesn’t matter which side of the political aisle you sit on, each is looking across the great divide fearing an invasion by something we believe is so foreign to our concept of normalcy that we can’t even recognize our neighbors and loved ones. That is the underlying problem with the stock market.

What makes this so scary is that as I’ve been saying all along that the fundamental problem isn’t the Coronavirus, which is acting as the trigger to this bear market. What’s wrong is that the entire philosophy that is currently being implementing into the financial markets is a sham. There are only so many tools that can be used to stimulate a lethargic economy and playing with the interest rates is one. When that doesn’t work and the bond yield is at an historic low (below 1%), panic sets in. Had they left things alone and just let the markets play out there may have been some follow through from Monday’s rally on its own and we would see less fear and the sense of immediacy wouldn’t be so great. But by using this short term “sugar-highs” for stimulation there is little more they can do. We may be heading into a debt-fueled recession that will be deep and long lasting.

In my writings, webinars and my lecture series through the end of 2019 I predicted that through much of 2020 the markets would be violently volatile with the DOW moving 1,000 points both up and down as the foundation began to crumble. There would be a sense of instability and we would feel as though we were standing on quicksand. That would be followed by a massive crash and a deep recession at the end of 2020 into 2021 that will take years to recover from. We are of course already seeing that volatility I expected and, while I didn’t predict a pandemic, the astrology led me to believe that whatever the trigger was, the foundation upon which this seemingly endless bull market was standing would no longer be able to hold the weight of fear and distorted truth.

Whatever the coming weeks and months present us, whether the stocks rally back up to new highs or stay in bear territory, it’s just a matter of time before the rotting underbelly can no longer sustain a foundation that can hold this all up. I would be extremely wary of any sudden explosion on the upside of these markets. That’s exactly what happens right before a crash. Please view my webinar, come to my lectures, or listen to my audio recordings of past presentations that are available on my website: www.michastro.com

While I believe I am right in my interpretation, I also hope that I’m not, or that it won’t be nearly as bad as it could become. I have no problem being wrong in my astrological interpretations if it means that events will run more smoothly and problems can be avoided. But I don’t believe in sticking my head in a honey jar like our old friend Pooh trying to lick out the last little bits of sweetness only to find that it’s stuck and I can’t get free.

Peace to you all. Mitch