Wednesday, October 29, 2008

US rally fails at the close

New York closed down 1% after the Fed cut its prime lending rate 50 basis points to 1%. The Dow had been up over 9300 but sold off sharply in the last 15 minutes and ended the day at 8990 while the S&P closed at 930. Indian stocks were up modestly on the day with the Sensex at 9044 and the Nifty at 2697.

I had thought the market might hang on to more of its gains today, but it was not to be as bearishness returned at the close. This sets up a more negative sentiment Thursday and Friday and going into next week. There is a veritable Sword of Damocles hanging over this market as Mars moves under the exact aspect of Saturn in the next few days just as Saturn and Uranus are set to oppose one another early next week with the money planet Venus getting caught exactly in the middle. Look for volatility to increase here and we will likely see 8100-8500 intraday by Friday on the Dow. A retest of 7773 is more likely Monday or Tuesday. The Sensex will likely trade below 8000 on Friday, with closes below 7500 next week.