Tuesday, February 10, 2009

Geithner fails to impress; New York plunges 5%

In what must be seen as a bracing, if rude, welcome for the new Treasury Secretary, Timothy Geithner's bank bailout plan was greeted with a huge stock sell off as the Dow lost 400 points to close at 7888 while the SPX ended near session lows at 827. The drop reversed the prevailing optimism that moved Asian markets on Tuesday as Mumbai rose modestly with the Sensex closing at 9647 and the Nifty at 2934.

I had thought we would see more upside this week, but Monday's failure to generate any new highs above SPX 870 convinced enough investors that the time to sell was nigh. A couple of planetary observations here may suffice as an explanation. First, I had wondered if the movement of several planets into Jupiter-ruled sectors of nakshatras might change the overall equation. It did change the equation, and for the worse. Even though I called for some early week upside, I knew that the Jupiter influence here was a little shaky due to Jupiter's close conjunction with malefic Rahu and its debilitated state in sidereal Capricorn.

An additional negative factor was the 135 degree aspect between Mars and Saturn. Given my discussion in the weekly forecast of the potential role of Mars as a trigger in releasing the Saturn-Uranus energy, it seems that some of that energy has now been realized. My previous hypothesis focused on Mars' full strength quincunx aspect that will become stronger towards the end of February. Certainly, the drop today suggests that some of that energy has been manifested with today's trading.

The best the bulls can hope for is probably not much more than a fairly weak technical bounce for the rest of the week. Tomorrow may well start out fairly negative as well. Asia should be quite negative also tomorrow since the Mars-Saturn aspect does not perfect until after the trading day in Mumbai. The trend continues to be down, so next week still looks worse, so we could retest the Fall 2008 lows then.