Sunday, January 11, 2009
Stocks succumb to bad economic news
Markets headed south last week with the approach of Mercury to Rahu and the impending Mercury retrograde cycle as the Dow ended Friday at 8599 and the SPX at 890. The bearish sentiment was punctuated by a difficult Mercury-Saturn aspect that was in hindsight the more immediate cause of Wednesday's substantial decline. The general picture of a shift to pessimism was largely in keeping with our expectations laid out last week.
With Mercury turning retrograde this weekend, we are entering a zone of transitional energies where Mercury, the planet of trading, is slowing separating from the disruptive influence of Rahu and moving towards the warmer embrace of Jupiter's optimism. This shift will take time, and we may see prices fall further this week before they move up again and stage some kind of rally. Look for some kind of bounce up Monday or Tuesday, after which the market will sell off as Mercury again aspects Saturn and move back down towards 8400/870. The late week could go either way, but by Friday we may finally see Jupiter's favourable influence become manifest. The subsequent rally next week may be short-lived but it could be substantial and return the market to its November highs. A sharp turn downwards is likely in the last week for a variety of astrological reasons, not the least of which is a solar eclipse on January 26. This eclipse features several strong aspects, including a close Jupiter conjunction to the Sun and Moon. Jupiter's influence is offset by two important factors: 1) a close Saturn aspect to the eclipse point and 2) a powerful alignment of Venus, Saturn and Uranus straddling the MC-IC. While different interpretations of this configuration are possible, I think the negative outweighs the positive and the Jupiter influence may only manifest as a magnification of the bearish mood.
Mumbai also had a down week as markets sold off sharply in the wake of the Satyam debacle on Wednesday. The Sensex closed Friday at 9406 and the Nifty at 2873, as the indices once again failed to break through their key resistance levels (Nifty 3150). The Mercury-Saturn aspect was mostly responsible for a sharp sell off, which activated the natal Saturn in the NSE chart. Overall, markets moved according to expectation, although the downside was somewhat greater than anticipated. Look for the market to move lower this week, after a gain early on, perhaps on Tuesday. Indian markets may not see the rally begin until next week but it should be fairly strong and push the Nifty above 3000. It's possible we could see 3100 again by the 23rd but this seems like a bit of a stretch. The eclipse of January 26 will likely decisively break the bullish mood. The eclipse point falls at 12 Capricorn and this will once again activate the NSE Saturn at 12 Aquarius. Given transiting Saturn's placement in aspect to this degree, it seems likely that Indian markets will head down substantially in the weeks following the eclipse. A retest of the October lows of Nifty 2525 seems the most likely scenario.
The US dollar gained some ground last week against most currencies as crude oil sold off hard to $41 and gold slipped back to $855. This week looks more equivocal for the dollar and commodities without a strong trend although I would think the dollar remains weakly bullish which means that commodities will trend somewhat lower.