Sunday, July 12, 2009

Markets continue decline as eclipse approaches

Markets fell across the board last week on fears that the much anticipated recovery may have to wait until next year . In New York, the selloff began in earnest on Tuesday's sharp loss, as stocks dropped over 2% on the week as the Dow closed at 8146 and the S&P at 879. In Mumbai, the damage was much worse, as investors were disappointed by Monday's budget that offered greater spending initiatives (and attendant high deficits) and little in the way of significant market reforms. Stocks fell 9% as the Nifty closed at 4003 and the Sensex at 13,504. This bearish outcome was largely in keeping with expectations as the selloff commenced with the exact alignment of Mars with Jupiter and Neptune within a day of the Full Moon. Thursday's Moon-Sun-Saturn alignment did broadly coincide with some modest gains as forecast, although they were not sufficient to break the negative trend for the week. The markets are now in full-blown correction mode as stocks search for a solid bottom.

With the approach of the total Solar Eclipse of July 21, we may continue to see the predominance of caution and pessimism. The key aspects this week suggest a mixed outcome with high volatility and a possible further downward bias. Monday will see the tail end of a very nasty Mars-Rahu-Pluto alignment that might be enough to push down markets in Asia, at least in the early going. Recovery seems more plausible later in the day and into Tuesday as the Sun will conjoin with a very strong Mercury in late sidereal Gemini. As the week progresses, we see Thursday's apparently positive Mercury-Uranus aspect that normally might push markets higher. But given Mercury's proximity to malefic Ketu, I am not confident that this aspect can produce gains. By Friday, Mercury will be almost fully in the clutches of Ketu (the South Lunar Node) and this is more likely to put a lot of pressure on investors (as represented by Mercury) as Ketu's penchant for otherworldliness and spiritual release could make the stock market into an unpopular place.