Grace K. Morris, MA, is editor of the Astro Economics Stock Market Newsletter.

“The ‘fiscal cliff‘ is a term used to describe a bundle of momentous U.S. federal tax increases and spending cuts that are due to automatically take effect at the end of 2012 or early 2013 if Congress fails to reach agreement on a combination of revenue hikes and spending cuts,” she explains.

If agreement isn’t reached, automatic tax hikes and budget cuts will slash about $503 billion from the federal budget for the 2013 fiscal year.

“Economists inside and outside the government have warned that such significant budgetary austerity in the midst of a still-fragile economic recovery could lead to a double-dip recession and rising unemployment in 2013,” she says.

While there’s no telling what actions a polarized and contentious Congress might take, Morris thinks there are reasons to be optimistic a deal will be struck.

For one thing, a double-dip recession is not the outcome predicted by an 18.6-year cyclical pattern that has reliably called economic recessions and recovery periods for more than a century – including the prediction that 2008 would mark the low point for the current cycle, she says.

Morris says the highly researched 18.6-year cycle first described by financial astrologer Louise McWhirter in 1935 is based on transiting lunar nodes. The mathematically calculated lunar nodes are sensitive points in space where the moon’s orbit around the earth intersects the earth’s orbit around the sun – the ecliptic.

The north or ascending node is where the moon’s orbit crosses north of the ecliptic. The descending or south node is where it crosses the ecliptic to the south.

Moving in a clockwise direction, it takes the nodes 18.6 years to travel through the 12 astrological signs.

“According to McWhirter’s theory, at this point the north node is in the sign of Scorpio and the U.S. economy should be starting an upward trend that will reach its peak in 2017. A double-dip recession doesn’t fit a pattern that has predictably tracked economic ups and downs for more than a century,” Morris said.

For those looking for other reasons to remain optimistic, the planet Jupiter will enter the sign of Cancer in June of next year and remain in the sign until July 16, 2014.

“This is significant because archetypal Jupiter is the planet of expansion and Cancer the sign symbolically linked with home building and real estate. An improving housing market should help the economy continue to grow.

“We’re also repeating a previous 14-year Neptune cycle (1956 – 1970) when low interest rates and low inflation helped the economy grow in the post World War II era,” she said.

But it’s not uncommon to hear those who fail say timing errors were largely to blame.

Financial astrologer Bill Meridian consistently ranks among the leading stock market timers in the country. He thinks the kinds of timing errors that often befall startup businesses – or occur when owners take private companies public – can usually be avoided.

Meridian has advised companies on incorporation dates, initial public offerings (IPOs) and other strategic timing issues. The founder of Cycles Research Ltd. has been forecasting markets with cycles for 40 years and is the author of Planetary Stock Trading, Planetary Economic Forecasting and The Predictive Power of Eclipse Paths.

It matters greatly how the planets, sun and moon are aligned at the time a business makes a critical corporate move. In the West, the number of businesses making this discovery appears to be growing dramatically in recent decades, he noted.

Meridian says timing errors made by businesses are relatively easy to spot. For example, astrologers were quick to point out where Facebook went so badly wrong when offering its shares to the public for the first time.

Facebook made its initial public stock offering on May 18. Three months later the shares were selling at half their original value.

According to Meridian, the company ignored the most obvious cyclical pattern in the heavens, the lunar cycle, and chose to bring the company public two days before a major solar eclipse. This was a major mistake.

“Events immediately before and after a solar eclipse are important. But events before an eclipse take on the added attribute of being unpredictable and fated.

“In the period prior to an eclipse we are in a shadow, not seeing the complete situation. If one is forced to make a decision or to take action prior to an eclipse, significant alterations in plans will be needed to reach the original objective,” he said.

It’s best to postpone a major corporate decision until the week following a major eclipse, he explained.

There were other problems for the social media behemoth. Astrologer Grace K. Morris says the chart set up for the exact time of the first trade indicates very difficult business challenges, most particularly in the area of financial accounting.

Morris writes the Astro Economics Stock Market Newsletter. The first trade chart for the Facebook IPO indicates the possibility of deceptive practices or at least confusion and misunderstanding, she says.

“There are indications the stock can still be a success but the company will need to work hard to overcome the unfortunate perceptions the public has as a result of its first public trade.

“The problem could have been avoided by picking a better time,” she said.

“Solar eclipses tend to move the market in new directions. But companies or projects started or initiated before an eclipse – especially a solar eclipse – are greatly handicapped and will probably not live up to expectations,” she said.

The Facebook stock opened at 11:30 a.m. on Friday May 18 and only managed to break slightly better than even on opening day, a bad omen for IPOs.

On Monday, the first trading day after the partial solar eclipse on Sunday, May 20, the price of Facebook’s stock dropped 11 percent by the close of the day.

Following an eclipse, Morris says the market tends to reverse itself and the trend is in the opposite direction. After 12 down days, the market was poised for a projected turnaround that was expected to push prices generally higher until the next lunar eclipse on June 4.

But it’s no sure thing that Facebook (FB) will be along for the ride, she said.

Morris has worked with clients for more than 20 years setting up successful incorporation dates, IPOs, and first trade dates. She writes and publishes two newsletters, The Right Time and The Astro Economics Stock Market Newsletter, which recommends stocks by sectors according to their favorable cycles.

A new cycle beginning in June will favor transportation, education, communication, media, telecommunication, travel and pharmaceuticals. She expects stocks in these sectors to generally outperform the market in the next year.

Morris’ record has included COOG, up 266 percent since 11/04; BIDU, up 938 percent since 6/07; NTES, up 140 percent since 4/09; CERN, up 189 percent since 5/09; EBIX, up 133 percent since 6/09; PCLN, up 405 percent since 9/09; MELI, up 206 percent since 9/09; SXCL, up 323 percent since 10/9; VRX, up 273 percent since 12/09; RAX, up 253 percent since 12/09; AAPL, up 209 percent since 1/10; LULU, up 436 percent since 1/10; FFIV, up 119 percent since 4/10; ALXN, up 25 percent since 7/10; and SWI, up 135 percent since 9/11.

In the first FB trade chart a favorable Sun/Jupiter conjunction is dominantly placed and the Facebook IPO did in fact get lots of action and attention on opening day.

But the stock may have accountability problems because Mars and Neptune are aligned in a stressful 180 degree opposition aspect, made more challenging because timing for the opening trade angularly placed the aspect where its effect will be more intense.

Other stressful aspects suggest the company may spend too much based on unrealistically high expectations for cash inflow. Or, as some analysts have suggested with hindsight, the IPO’s asking price may have been too high with too many shares hitting the market at the same time.

Citing a cyclical trend in home values that has been tracked since the American Civil War between the States, astrologer Grace K. Morris, M.A., says the worst almost certainly is behind us.

According to the 18.6-year Real Estate Values cycle first described by the late research astrologer Alice Reichard, home values were projected to bottom in August 2009 and trend upwards towards the next high point in June 2020.

“There’s been a lot of sideways movement in America’s housing markets as the number of home foreclosures have continued to rise. But things appear to be getting back on track after the subprime mortgage crisis plunged the housing industry into chaos,” she said.

Morris writes and publishes the Astro Economics Stock Market Newsletter. She says the Real Estate Values cycle is keyed to the motion of the moon’s north and south nodes.

The mathematically calculated nodes are sensitive points in space where the moon’s orbit around the earth intersects the earth’s orbit around the sun – the ecliptic. The north or ascending node is where the moon’s orbit crosses north of the ecliptic and the descending or south node is where it crosses the ecliptic to the south.

Eclipses can only happen when the moon is aligned with its nodes. This phenomena was observed and noted at least 2,600 years ago by the ancient Chaldeans, who called these two points the Dragon’s Head (north node) and Dragon’s Tail (south node).

Every astrological tradition since then has identified the nodes as powerfully influencing both the affairs of nations and the lives of ordinary people. In the Western tradition, the north node is generally identified with opportunities for personal growth and expansion while the south purportedly illuminates personal limitations that need to be addressed.

Like everything else in space, the nodes are continually on the move, progressing together in tandem but 180 degrees apart in opposite astrological signs. During the 18.6 year cycle each node spends more than a year trekking through each of the 12 astrological signs.

Reichard theorized that the transiting Dragon’s Head (north node) might positively influence home values as it transited through the astrological sign of Cancer. Symbolically, Cancer deals with feelings and the emotions but also is strongly linked to domesticity and matters related to hearth and home.

Reichard further reasoned that if home values cyclically peak with the north node in Cancer they should bottom about 9.3 years later when the north node, trending downward, has moved half-way around the zodiac to the sign of Capricorn. Home values should then begin trending upward on the way to their next high point in Cancer.

How is this working out?

The cyclical pattern is highly susceptible to economic nuance and may sometime appear to be flat or uneven. However, over time, the trend line has consistently moved in the expected direction, Morris says.

In the current era, home values peaked in 1962 with the north node in Cancer and the average U.S. home price climbing to $20,000. Values remained virtually unchanged as the cycle trended downward to the next cyclical low point in 1973, but average prices rebounded robustly to $80,000 by the time and the next cyclical high point was reached in 1981.

Home values dipped to another low point in 1991 when, on cue, a recession arrived to moderate earlier gains. Only this time, when the trend line pointed north, there was no stopping the rapidly ramping home prices that arrived with the new century.

“Home values were projected to peak in 2000 but subprime mortgages fueled and extended an incredible surge in home values for another six years before the housing market began to implode,” Morris said.

The good news is the Real Estate Values trend line appeared to be was back on track in August 2009. The north node was back in Capricorn and home values had abruptly returned to their cyclical lows in many U.S. housing markets.

“The timing could hardly be more auspicious for those who can consider buying a house at this time. Interest rates are near historic lows and home values at a low point as well.

“A home purchased now should prove to be an excellent long-term investment,” she said.

Rapoza interviewed financial astrologers Ray Merriman, Robert Gover and Grace Morris, and produced a balanced overview on financial astrology for the uninitiated: Can Planets Affect Your Portfolio? He also wrote a sidebar piece: Lucky Guess or Lucky Stars, Astrologer’s Top Stock Picks Beat the Market.

Some observations by the astrologers interviewed:

“Astrology is not some fortune cookie bullshit.” — Robert Gover.

“This is a crossroads year. It’s not the end of the world for the U.S. economy and the planets tell us it’s going to be a good first half for U.S. stocks.” — Grace Morris.

“With Saturn moving into Scorpio later this year it will be a time of reckoning and not only for the U.S. but for Japan and also Europe.“ — Ray Merriman.

The Astrology News Service (ANS) asked the Forbes reporter the following questions:

ANS: Are you a Forbes staff writer or freelancer?

Rapoza: I’m a contracted employee, which is one step above freelancer, one step below staffer. I write for them daily and am one of the top 10 international news writers in terms of traffic.

ANS: How did this article come about?

Rapoza: Intellectual curiosity really. Plus, I personally know Robert Gover (one of the astrologers featured in the coverage).

ANS: Business magazines appear to be more open to covering this topic than head-in-the-sand scientific publications. Why do you think this is so?

Online Forbes article illustrated with stock image of crystal-ball gazing fortune teller.

Rapoza: I think because a financial and business publication — especially a mainstream one like Forbes — has more room to at least “appear” to be tongue in cheek than a professional journal of science. Although I was not poking fun as financial astrologers in any way, I used an image that was more mainstream in order to attract a more general audience — a woman reading a crystal ball.

I would also say that for a mainstream business magazine like Forbes, or even a weekend article in the Wall Street Journal or the New York Times, that people might be curious to know about the subject as they would be curious to watch any “out there” type program on The History Channel; such as Decoded or Ancient Aliens. It interests people. And on the investment side, people want to look at the data — see just how well your stock picks have worked using financial astrology at least in part to make those decisions to buy or sell. Investors, both retail investors and licensed professionals, know how to judge whether an investor’s calls are working or not: is the stock going up, or has it gone down? In the examples I gave from Grace’s large cap stocks, they have all gone up. Of course, lots of stocks have gone up this year, but still, people interested in investing would be curious about how that call was made. Lucky guess? Or lucky stars? I don’t think you’re going to get away with that in a scientific journal.

ANS: Do you or your broker utilize astrological methods when timing/picking stock investments?

Rapoza: No.

ANS: What answer do you give those who ask for your honest opinion about astrology?

Rapoza: I’ve never been asked that question. I would say that I have personally used astrologers in my personal life. In fact, I plan on seeing one next week! Not for stock picking though.

ANS: Is there anything else you think we should know?

Rapoza: I think that’s it. I’m glad people (in the astrological community) liked the article.

The system he calls the Technical Aspect Oscillator (TAO) is described in the April/May issue of The Mountain Astrologer magazine. It is designed to scientifically measure and predict the impact of orbiting planets on investor sentiment and, by extension, price moves in the marketplace. Schulz says continual tracking has revealed close statistical correlations between the global psychological indications predicted by the technology and bullish and bearish stock market sentiment. There’s less than a one in 10,000 probability that the observed correlations occurred by chance.

“The research supports the astrological premise in two important ways. It confirms that the various archetypal energies astrologers have traditionally identified with the orbiting planets can be rigorously observed impacting human affairs. And it confirms that changing planetary alignments or patterns predictably influence outcomes in measurable ways,” he noted.

Modern astrologers believe that archetypal energies associated with transiting planets are both distinctive and dualistic in nature. For example, Saturn is positively identified with such qualities as stability and sound philosophical judgment and negatively with fear, separation, restriction and physical limitations. Jupiter represents the principle of expansion, optimism and success, but is negatively identified with extravagance, inflation, excessive overconfidence and the like. In a similar vein, Martian energy is positively identified with action and initiative and negatively with anger and frustration, Schulz said.

Changing Angular Relationships

“For centuries, astrologers also have claimed that the changing angular relationships between orbiting planets powerfully impact events on earth. Whether the various planetary archetypes will be expressed positively or negatively largely depends upon the way they are aligned with each other at any given time,” he explained.

As viewed from the earth, orbiting planets appear to be moving at different speeds. The reason for this is because some planets are a lot farther from the sun than others and have move celestial distance to cover in their elliptical orbits. As a result, faster moving planets (including the sun and moon) appear to continually overtake slower moving planets, forming what astrologer’s call applying and separating “aspects” as part of predictable cycles. Because the mathematics of celestial mechanics are well understood, astronomers and astrologers can quickly determine precisely where in the heavens the sun, moon and every known planet in the solar system can be found. Also known is the exact number of astronomical degrees separating the planets as they travel through the various zodiacal signs.

Some aspects between planetary pairs are deemed to be stressful while others promote harmony and ease. For example, planets forming aspects of 60 and 120 degrees (the sextile and trine) are believed to influence the human psyche in positive or productive ways, while the stressful square and opposition ( 90 and 180 degree) aspects have the opposite affect. Aspects are said to be “in orb” or operative a few degrees before and after the angle is exact. Schulz says the zero-degree conjunction is a powerful aspect that begins and ends the cycle and can be experienced either positively or negatively depending upon the psychological characteristics of the planets involved in the aspect.

“Scientists have ridiculed this idea since the 17th century, arguing that no mechanism exists to plausibly explain how planetary energies could manifest in this way. However, new evidence impressively supports the astrological position,” Schulz maintains. In physics, an oscillator is a measurement between maximum and minimum values. More than two decades of research went into development of the TAO 2 technical aspect oscillator Schulz created to analyze investment sentiment in the financial markets. On a continual basis, the TAO 2 system computes the changing angular relationships between nine different planetary pairs. The planets Saturn, Jupiter and Mars are prominently featured in these pairings.

Moving Average Compared

Schulz says the TAO 2 technology continually calculates a weighted positive or negative value for every degree of angular separation between the planetary pairs. Also compiled is a composite score and moving average that can, over time, be statistically compared with moving averages for the various stock market indexes. Simply, like the market averages, when TAO 2’s average score is rising people’s attitudes and outlook are hypothesized to be more optimistic. Conversely, when the number is falling, pessimism persists.

Because TAO 2 and the various stock market indexes are independent variables with known and constantly changing numerical values, they can be compared with each other using the Pearson product-movement correlation coefficient, a common statistical test used to scientifically determine whether a linear relationship exists. This method creates correlation values (the Pearson r) between -1.000 and +1.000 with r = +0.30 the threshold for statistical significance. In a series of tests conducted between January 1, 1999 and June 30, 2008, the TAO 2’s moving average was compared with the Dow Jones Industrial Average (DJIA) and S&P 500 Index twice a week on Tuesdays and Fridays over the 117-month period — a total of 990 separate comparisons for each index. The correlation value for TAO 2 and the Dow Jones Industrial Average was r= +0.72, which is well above the threshold for statistical significance. A similar comparison with the S&P 500 Index produced an even higher r = +0.81 correlation.

“Correlation is not causation. Stocks can and do move against the TAO 2 average for indeterminate periods of time. But the statistics suggest an extraordinary connection between the aspect oscillator and stock indexes that cannot easily be explained away by astrology’s critics,” he said. Schulz believes the results are difficult to dispute because the technology effectively blends applied mathematics with astronomy in a quantitative numbers-in, numbers-out type system that automatically produces raw scores from data input into mathematical formulae. Subjective human interaction is not involved in any way.

Another test for the TAO technology examines its effectiveness as a stock market timing device. Schulz routinely relies upon the technical analytical tools used by insiders in the business, but doesn‘t make a move in the marketplace without first checking directional indications predicted by the TAO system.

While trillions of dollars in paper assets were vanishing from the stock portfolios of agonized investors around the world, a portfolio of Exchange Traded Funds (ETFs) posted on the www.schulzonmarketcycles.com website between May 5, 2006 and April 1, 2009 were up a robust 395 percent.