Sunday, January 24, 2010
Mars aspects dominate this week
Storm clouds gathered over the financial markets last week as China tightened lending rules and Obama's new banking plan put things in a new light. Much of the new reality in the US was brought about by the upset victory of Republican Scott Brown in the special Massachusetts Senate election. This has meant a loss of the Democrats 60 seat supermajority and has forced Obama to adopt a more populist anti-Wall St stance. The new-found Republican confidence will also likely mean increase concerns over the growing government deficit and will therefore diminish any future stimulus measures. The new political reality in Washington has also jeopardized the confirmation of Fed Chair Ben Bernanke for a second term as more senators are reluctant to be seen to be too close to Wall St in a mid-term election year. The net effect was negative on stocks as investors wondered if the days of easy government bailout money was now over.
The Dow closed down 4% on the week to 10,172 while the S&P closed at 1091. The story was similar in Mumbai as the Sensex backed off its recent highs to close at 16,859 with the Nifty finishing at 5036. While I did not foresee the extent of the decline I correctly noted last week that we could see new highs put in early in the week on Jupiter's influence. I also warned about growing pessimism later in the week on the Venus and Sun aspects to Saturn. Since Saturn is a planet of caution and limitation is seems that these aspects have played an important role in the losses.
This week may well extend the dark mood as Mars forms a series of aspects through the week with Mercury, Venus and the Sun. Given the proximity of the aspects, declines could occur on any day this week. Gold is also likely to come under further pressure since both Venus and the Sun, two planets that symbolize gold, will come under the malefic aspect of the debilitated Mars in sidereal Cancer. Despite the heavy Mars influence, we should still see some up days this week. But the overall tone of the market will likely reflect the sense of Mars -- urgency, quick action, agitation and possibly more fear.
Last week's sell-off and the prospect of all those Mars aspects this week increases the chances that we saw an important top in the market with the Solar Eclipse and twin reverses of Saturn and Mercury on Jan 13-15. Whether or not it can stand up as high water mark in the medium term will depend on how low the market corrects in the coming weeks. With Mars staying retrograde until March 10, there is some reason to remain cautious here. And we will also have to integrate the effect of Jupiter aspecting both Saturn and Pluto in the first week of February. This is a very close three planet alignment that could provide additional input into sentiment.