Sunday, September 14, 2008
Market Forecast -- week of Sep 15 - 19
Stocks in New York finished slightly higher last week overcoming continuing anxiety over the viability of the financial sector in the wake of the credit crisis. While I had been more bearish last week, much of my forecast for caution was based upon the assumption that the decline would begin with Friday's session which ended up being neutral. The negative potential of the Mars-Rahu aspect has yet to be played out however, so the decline will likely take place on Monday and perhaps carry over into Tuesday. Perhaps the failure to save Lehman Bros. may be the news required to send the market back under 11,000. The Dow opens Monday's session at 11,421 and the S&P at 1242.
This week looks negative overall as Monday and Tuesday's gloomy sentiment will likely override any offsetting gains later in the week. The Sun moves into Virgo late Tuesday, so that may generate a little positive energy as it leaves the company of Saturn in Leo and joins somewhat more auspicious company of Venus, Mars and Mercury in Virgo. But by week's end, Venus moves into Libra thus leaving Mercury to fend for itself against Mars. Friday, therefore, could see another decline. The Sun is applying to square Pluto by Friday and over the weekend, while transiting Mars is moving closer to oppose the natal Moon in the NYSE chart so that's another reason to exercise caution this week. Wednesday and Thursday look like the best chance for gains this week. Nonetheless, there's a real possibility the market could end up below 11,000 here. This retesting on the downside is preparation for a substantial decline in late September or more likely the first week of October that will take the market decisively under 10,000.
As predicted, Mumbai lost ground last week as the Sensex opens Monday at 14,000 even and the Nifty at 4228. I was also correct in calling the early week gains and the erosion of confidence towards Friday. Look for more declines, perhaps even larger ones this week as transiting Mars conjoins natal Rahu and squares Jupiter in the Nifty natal chart. While I don't think there will be a retesting of the July lows (12,800; 3800) this week, we could get half way there, at least on an intraweek basis. Some bargain hunting may bring things back up a bit midweek, but we'll probably finish well off these levels. By early October, there will be a global market retreat that will pull the indexes down sharply.
Tokyo was unchanged last week as the Nikkei opens trading Monday at 12,212. Since the Friday sell off did not occur as predicted, stocks managed to stave off losses on the basis of Monday's predicted gains. There's a chance of the Nikkei retesting its March lows of 11,800 early in the week, although I think the rest of week will see some recovery. Next week looks worse so those March lows will likely be knocked out then.
As predicted, Shanghai declined another 5% last week as the SSE opens at 2079. While Friday's session was not negative, Monday's will likely be quite bearish as the transiting Mars aspects the natal Rahu in the SSE Composite chart. It's difficult to see much upward strength here, so we may see prices below 2000 for the first time since October 2007. Once Chinese stocks correct fully over the next month or two, there will be an excellent buying opportunity near 1500.
As predicted, the Euro did trade below 1.40 midweek. It recovered by week's end to 1.4217, down half a cent on the week. While there is a chance for some early week gains, by Wednesday the Euro is likely to trend downward. The decline could be severe to the point where it may be trading well below 1.40 by Friday. Look for the Euro to fall very sharply in the coming weeks.
As predicted, crude oil held above $100 last week, but just barely. Overall, market sentiment was more negative than forecast as it closed above $101 on Friday. There's a chance of more upside early on this week, but generally this looks like a down week. There's a very good chance oil will close well below $100 by Friday, perhaps down to $95. Oil looks quite negative over the next two weeks as Venus and Mars move into Libra and hence come under the malefic influence of the natal Saturn and Mars in the Futures chart. I would not be surprised to see crude tumble below $90 in the short term.
As predicted, Gold dropped below $780 last week and opens Monday at $764. I was still overly optimistic in my forecast and thought there would be more of an early rally than there was. Also I did not foresee the downside probing into the $740 range. Gold this week looks volatile, and we may see daily $20 moves in both directions. I would not be surprised to see bullion drop below $740. As Venus and Mercury approach the MC of the GLD chart later in the week, there is a chance for some upside here, although next week looks better overall.