Stocks continue to rise on Solar Eclipse

With the solar eclipse showing no immediate effects, markets continued their winning ways last week as stocks rose 4% on more good earnings reports. The Dow closed at 9093 while the S&P stood at 979. It was much the same story in Mumbai, as the Nifty climbed to 4568 and the Sensex to 15,378. While the eclipse correlated with modest declines Tuesday and Wednesday in India (but only Wednesday in New York), the apparently unstoppable ebullience highlighted the ongoing influence of the Jupiter-Neptune conjunction. While the late week gains fell in line with expectations for a bump up from the Sun-Moon parivartana yoga, I thought the eclipse might have claimed more victims. As I have previously noted, eclipses are not atomic clocks and cannot be relied upon to dictate market moves. They are probabilistic instruments not unlike road signs that notify the traveller of trouble ahead ("Construction Zone: next 10 miles"). Just when the trouble will manifest isn't always clear, but that Venus-Saturn square of July 22 does not portend a happy ending to this rally.

This week's planets would appear to offer more bullish fuel to investors as Venus forms an aspect with the Jupiter-Neptune conjunction (and later Uranus, too) while Mercury follows suit Wednesday and Thursday. Monday's positive alignment has a large asterisk however, since Mercury is in a close minor alignment with Saturn and that has the power to take markets down on at least one day in the early going. Nonetheless, the balance of energy would seem to favour the bulls here as we can expect to see stocks to bounce back from any losses they might incur. This seemingly bottomless reservoir of well-meaning but ultimately deluded hope will likely also push oil and gold higher. In the wake of the positive Mercury-Jupiter aspect late week, there is increased risk of a hangover-like reaction that follows the completion of a triggering aspect by a fast moving planet (Venus, Mercury) to a larger configuration of slower moving planets such as Jupiter, Neptune and Uranus. In investment parlance, this reaction is known as profit-taking.

The planetary weather in August looks conducive to more gains on optimism over the prospects for recovery, at least at the outset. By month's end, however, the folly of our ways will be revealed.

Stocks rally on Sun-Mercury conjunction

Stocks rallied strongly last week on positive US earnings reports and favourable economic data coming out of China. In New York, the Dow gained 7% to close at 8743 and the S&P finished at 940, as markets rose back towards their June highs. In Mumbai the rally was no less impressive as the Nifty gained 8% to end the week at 4374 while the Sensex once again pushed toward the 15k level as it closed at 14,744. Although I allowed for some up days on the Sun-Mercury conjunction, my forecast was far too bearish last week. Interestingly, the Mars-Rahu aspect did indeed push the market down Monday in Asia with recovery coming in the afternoon in New York as stocks moved higher on the Sun-Mercury conjunction in late sidereal Gemini. As it turned out, both the Mercury-Uranus aspect and the Sun-Jupiter aspect later in the week overwhelmed whatever bearishness was contained within Friday's Mercury-Ketu aspect as stocks moved higher. The bullish momentum from last week is perhaps an indicator of the resilience of the market here so there is likely a little more upside to come as we move into August before the status quo is upset. Jupiter enters sidereal Capricorn on July 31 where it will remain until December. As the planet of optimism and confidence, Jupiter will be weakened by its transit into the sign of its debilitation. This is another reason for being skeptical about the staying power of any rallies in this market.

And speaking of upsetting the status quo, this week features a total solar eclipse on Wednesday (GMT) which will be visible in central India and China. The eclipse will occur at the same time Venus (24 Taurus) is in square aspect to Saturn (24 Leo). This not only can create feelings of caution and pessimism (Saturn) around money (Venus) during the early and middle part of the week when the aspect is closest, it may also foretell a significant decline in the world economy in the weeks and months to come. Eclipse effects usually take days or weeks to manifest (and many astrologers would also say months in some cases), so that is an indicator that the optimism over the economic recovery may wane in the near future. As this lengthy Jupiter-Neptune conjunction finally separates, we will likely see a major decline in stock prices, starting sometime in August and continuing into the fall. In terms of other aspect specifics, Mercury and Mars form a minor aspect on Monday and Tuesday and this is another possible source of nervousness that could cause some investors to exit the market. Some bounce is more likely toward the end of the week on Thursday and Friday as the Moon enters Leo and forms a parivartana yoga with the Sun in Cancer while Venus applies to aspect Jupiter.

Stocks rise on earnings reports

Stocks in New York rose sharply after Intel reported stronger than expected earnings. The Dow closed up 3% and closed at 8616 while the S&P ended trading at 932. The rally got started in Asia as Mumbai also bounced off last week's lows as the Nifty closed at 4233. So much for the much-ballyhooed head-and-shoulders pattern that was portending lower prices. Markets have broken above the "neckline" at Dow 8550 and are rapidly approaching their June highs.

This uptrend is largely in keeping with our weekly outlook given the Sun-Mercury conjunction and the Mercury-Jupiter aspect, although I admit it's somewhat stronger than I expected. I still see a good chance some substantial profit taking for tomorrow and especially Friday on the Mercury-Ketu conjunction, although it seems that we will finish higher on the week.

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.

Stocks slip in New York on separating aspect

Stocks in New York sold off sharply Thursday and ended down by more than 2% for the week. After approaching 8600 Wednesday, the Dow closed at 8280 while the S&P ended at 896. Mumbai ended a little higher on the week, mostly on the strength of some buying late Friday in anticipation of Monday's budget announcement. The Nifty closed at 4424 while the Sensex finished the week at 14,913. I had expected more of a rise last week given the Mercury-Venus-Jupiter-Neptune alignment so this outcome was somewhat surprising. It nonetheless provides a useful clue that the strength of the Jupiter-Neptune conjunction may now be fading. I had thought we might see some weakness especially given the separation of the Mercury and Venus aspect to Jupiter after midweek and Thursday's sell off in New York coincided nicely with that phenomenon. India fared somewhat better although Thursday and much of Friday was fairly flat and uninspired. Interestingly, the rally in the last two hours of trading Friday occurred just as the Moon was moving into exact square aspect with the Jupiter-Neptune conjunction. Although the Moon was debilitated in Scorpio, aspects to benefics will often trump other considerations.

This week features a Full Moon on Tuesday at 21 Sagittarius which may incline markets towards caution especially earlier in the week. On Monday, Mars will be in alignment with the Jupiter-Neptune which may conceivably maintain the enthusiasm for stocks early but the separation of this aspect may bring out sellers in force later. The Full Moon occurs close to the Mars-Rahu aspect in the NSE chart so that increases the likelihood of a decline around that time. On a more positive note, there is a three-way Moon-Sun-Saturn aspect on Thursday that may also move the markets significantly. Since Saturn is in the Sun's sign of Leo, this Sun contact may possibly correspond with a rise. Transiting Venus will conjoin the ascendant of the S&P500 natal chart (11 Taurus) later in the week so that also bodes well for higher prices then.