Sunday, December 21, 2008

Market Forecast -- week of December 22 - 26

Our bearish forecast notwithstanding, US stocks were mostly unchanged last week as the Dow closed Friday at 8579 and the S&P at 887. I had thought we would see more downside with the alignment of malefic planets, particularly the Mars-Saturn aspect. Monday saw stocks fall but they did not come close to even the 8400 support level. Tuesday's rally was not unexpected either, as Venus conjoined Rahu. But the late week decline was also a rather tepid affair as the market remains stuck in a fairly narrow trading range between 8500-9000.

It's important to note that the negative energy of the aspect between slow moving Saturn and Neptune has not disappeared. It is likely to be manifest sometime soon and is awaiting the proper planetary trigger. I mistakenly though the Sun-Mars would be sufficient, but as always astrology, the science that is not one, is rarely as straightforward as it seems. This week doesn't appear to have anything that will break us out of this trading range, although a rally is possible midweek on the Mercury-Venus aspect. Friday may be a harbinger of steeper declines to come, however, with the approach of the Mars-Pluto conjunction. Given the violent potential contained within these planets, it is possible this may be related to a geopolitical event that shakes market confidence. In any event, I think we will likely see the low around the first week of January 2009.

Stocks in Mumbai continued their winning ways last week as the major indices rose 5%. The Nifty closed at 3077 and the Sensex at 10,099. The late week Mars transit to the NSE ascendant did not bring declines but rather actually saw some gains. I'm a little puzzled by this market strength but remained convinced that this is another bear market rally that cannot be trusted to go much higher. Nifty 3150 seems like a solid resistance level.

While some gains are possible Tuesday or Wednesday, Indian stocks are likely to finish near or slightly below current levels this week. The Mars-Pluto conjunction early next week has the added feature of exactly aspecting the natal Mars in the Indian independence horoscope. This is a combination of planetary energies that speaks to sudden or even violent actions that may fall outside of the financial arena. The natal Mars in the India chart is in the 2nd house of finances however, so the most likely expression of this energy is simply more financial turbulence. Nonetheless, we should be open to all possibilities.

I think the US dollar will recover further in the coming weeks, with corresponding losses in gold.