Despite the continuing correction in commodites and the new-found strength in the US dollar, New York equities were unchanged last week. This is perhaps a sign that we've reached the upper limits of this immediate rally and another dose of good economic news is needed before the next step is taken above 12,000. The Dow closed Friday at 11,659 and the S&P stood at 1298. This confirms last week's forecast for a holding pattern of current levels. The intraweek trends unfolded more or less as predicted as we saw some significant pullbacks midweek below 11,400 with Mercury conjoining Saturn and the end of the week saw gains.
There are a couple of key aspects to watch this week. The potentially damaging Mars-Pluto square perfected on Sunday but this may have enough punch to push prices down, particularly early in the week, especially Tuesday, when the transiting Moon completes a fairly close t-square. Monday's open may be very positive as the Moon conjoins the natal Venus in the SPX Futures chart in opposition to both transiting Mercury and Venus. I would not be surprised to see a 150 point rise in the Dow in the morning. Tuesday runs the risk of erasing all of Monday's gains with the t-square. The other key aspect is actually a multi-planet affair involving the Mercury-Venus conjunction on Thursday. While the conjunction is a combining a positive energies, the problem is the close opposition to destablilizing Uranus. It's very possible that these three planets could make for sudden movement towards the end of the week. Certainly, trade volumes will rise and we will probably see some wide swings in prices and a major move. Overall, the week has an upward potential but much depends on Friday's trading. If Friday turns out to be positive, then the market may well get to 12k. If, however, Friday turns out to be negative, then the market will end up lower than current levels. A defensive posture is probably the most prudent course as I think the downside risk, though not at all certain, is potentially large.
The Sensex lost 2% in a shortened trading week and stands at 14,724. While the forecast correctly identified the intraweek pattern of gains earlier and losses later on, I had expected a better outcome in Mumbai. This pattern will likely repeat this week as Monday and Tuesday appear favourable as transiting Mercury and Venus come under the benefic influence of Jupiter in the Nifty natal chart. 15,000 - 15,300 is a reasonable mid-week target but by week's end, however, look for sentiment to turn negative. While it's possible that Mumbai may delay the decline until next Monday, I think Friday's action looks problematic so we may end the week not far from where we started.
The Euro fell through its long term support level of 1.48 last week and opens Monday at 1.4689. While I had forecast some intraweek probing below this support level, I underestimated the strength of bearish sentiment. The retreat of the Euro will continue this week as the transiting Sun moves into the 12th house of loss in the natal chart. By Thursday, I would not be surprised to see it below 1.42. Friday's action presents an opportunity for a respite, however, as the Venus-Mercury conjunction lines up nicely in aspect to the Euro's Jupiter. If Friday's gain doesn't pan out, it may be delayed until Monday. It is doubtful if any gains made Friday, no matter how large, will retrace the losses earlier in the week, however.
Oil lost about 1% last week and opens trading Monday a little under $114. My forecast was largely correct in calling for crude to stay above it's long term support at $110 and for midweek gains. We did see some trades at $117, however briefly. I had thought we'd finish a little stronger but the rally in the US dollar was not to be denied. I think there's a very good chance Oil will breach it's support at $110 this week and fall back to perhaps $107-109. Transiting Sun comes under troublesome influence of natal Ketu early in the week so that may be the most difficult time. Some bounce back rally is possible at the end of the week that may put crude around that $110-112 level.
Gold suffered the greatest last week and opens at $792. What looked cheap and attractive last week, now looks precariously perched above the abyss. Last week, it was clear that August was going to be tough sledding for bullion as long as stationing transiting Ketu was locked onto the subperiod lord Mercury in the GLD ETF chart. That said, I was not fully expecting Gold to tumble as quickly as it has. The new reality for Gold is that it's far below its support level of $850 and with the US dollar rising, it enjoys very little appeal. Astrologically, things look fairly gloomy for the next couple of weeks. Monday may see another shocking sell off as the Mars-Pluto square forms around the GLD ascendant. $750 or lower is not out of the question in the early going next week, but the Mercury-Venus conjunction should boost prices by Friday and perhaps next Monday. It's hard to imagine the week will finish positive, but the late week action may at least cut the losses of the early week. It's also possible that Tuesday may be the new interim low and a rally ensues after that. Subperiod lord Mercury moves into Virgo on Sunday the 24th so that ought to give a little more support to Gold prices generally. But longer term, I think Gold still has to make new lows before making a meaningful rally back to where it was in early 2008. As a worse case scenario, I think we may see Gold hit as low as $650 by December.
