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The Wall Street Astrologer Weighs in on the Financial Markets

Crains reports on the predictions of Wall Street astrologer Henry Weingarten in this article:

I like my crystal balls clear, so I’m sick and tired of being sick and tired of wishy-washy forecasts that prevaricate on where markets are going.

So I was pleased last week to get an unmistakable reading on stocks from one of the best tools in the pundit’s trade: the Shiller price-to-earnings ratio. It’s signaling bleak times, but that’s OK because, if social media has taught us anything, you get more attention being certain than being right.

The Shiller PE ratio measures the current price for the S&P 500 divided by the index’s mean earnings per share during the past 10 years. That smooths out fluctuations in corporate profits and values stocks based on their historical earnings power. The Shiller ratio usually floats between 10 and 30, and a high number means the market is happy. It has reached above 35 only three times: in 1929, during the late 1990s tech-stock bubble and now. It’s currently 38, for those scoring at home.

The good news, says DataTrek Research’s Nick Colas, is the Shiller ratio is a poor predictor of where the market is headed in the next 12 months. High as it is now, the ratio is well below the 2000 peak of 44. The ratio measures back to 1872, and history shows when it gets this high the market produces negative returns during the next 10 years.

But I want a crystal ball to tell me what will happen much sooner.

For that, I turn to my favorite Wall Street forecaster, Henry Weingarten of the Astrologers Fund. Your eyes might roll, but Weingarten’s star-charting techniques are no more absurd than the market soothsayers using “technical analysis” and related mumbo jumbo. Weingarten warns that a combination of inflation, higher taxation and all the newbies swatting around GameStop is creating a toxic brew.

“It is almost certain (92%) that markets will correct before October options expiration,” he warns.

What to do? He recommends gold because it has “entered its favorable seasonal cycle.”

We report. You decide.

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