In the wake of last week's turbulence which saw new intraday lows below 11,000, fear and loathing remain the prevailing sentiments in world markets. The Dow begins the week at 11,100 and the S&P at 1239. While the Mars-Saturn conjunction did not bring a clear capitulation, the growing anxiety about the long term viability of mortgage lenders Fannie Mae and Freddie Mac certainly reflected the tension and injury (Mars) inflicted on economic structures (Saturn). As forecast, the market did decline last week, although not quite as much as expected. The current level above 11k is a kind of purgatory that is neither low enough to generate a sense that the selling is over, and not high enough above the new lows to create a sense of security. So we need to come to a better understanding of just where the bottom is here. My thinking was that the time around the Mars-Saturn conjunction would mark an interim bottom, wherever it occurred. And yet without the capitulation sell off that pushed the market close to the 10,500 support level, I am uneasy with the thought that there is no more downside risk.
While volatility will likely characterize much of the upcoming week, I don't foresee a large decline. Monday looks fairly bullish as Sun trines Uranus and Mercury is trined by the natal Jupiter in the S&P Futures natal Jupiter. If we see a significant up day Monday (>1%), then the week may well be positive. Wednesday and Friday both look more bearish, so I'm reluctant to say there will be any big rallies here. Mercury, the planet of commerce, is transiting Ardra which is ruled by Rahu and generally creates an unstable foundation for action. But the bias seems more to the upside here. If the Monday rally is weak, then I would still hold open the possibility that we might close below 11,000 on Friday. Beyond that, the last chance for support levels to be tested would be the first week of August which looks quite negative. The crucial point there is that the last week of July will feature a trine between Mars and Jupiter that will create upward momentum that will likely move the market well enough above where we are here that any subsequent declines will not breach previous support levels.
Bombay held up well last week to remain unchanged and opens at 13,469. While the Sensex may flirt with 13,000, especially after Monday's catch-up, I don't foresee a weekly close much below current levels. Next week looks more difficult with some tense aspects forming in the IFN chart. A new interim low is more likely to form around the 23rd.
As predicted, Tokyo fell last week and opens this week at 13,039. With transiting Saturn now separating from its aspect to the natal Venus in the TSE chart, I think there's isn't a lot of downside pressure left here. Similarly, transiting Venus comes under the aspect of Jupiter while Sun applies to the ascendant. Overall, this suggests an upside bias for the week.
As predicted, the Euro is coming off a good week, and opens Monday at 1.5947. I somewhat underestimated the extent of the rise last week, as Venus transited through the sweet spot of the 11th house of gains. Monday looks like another good day as transiting Sun comes under the aspect of natal Jupiter. This may push the Euro over 1.60. Overall, I think early in the week looks favourable, but selling pressures may emerge towards Friday. Overall, I think we will end the week close to where we are now, perhaps a little higher. Next week looks like another high, especially around Tuesday.
Despite a pullback early in the week, Oil hit new highs and closed at $145 against our expectations. I still believe Oil will be susceptible to sharp sell offs going forward although it may not be a consistent move to the downside. I don't think we'll see $150 here and look for intraday lows down to $130.
Gold is coming off a big up week and opens Monday at $960. While our forecast was correct to call for lows below $920 which were achieved in early week intraday trading, I did not expect to see a rally so soon. Gold may retrench next week back below $940 before resuming its march back to $1000 in late July and August.
