Market Forecast -- week of December 1 -5

Stocks in New York rallied over 10% last week amidst a growing sense that a solid bottom was reached the week previous at 7400. The Dow ended the holiday-shortened week at 8829 while the S&P closed at 896. The rally was largely expected although I had thought we might see more declines later in the week. As it happened, the potential negativity contained within the Moon's transit of Scorpio was offset by the approaching conjunction of benefics Venus and Jupiter.

Monday's triple conjunction of Moon-Venus-Jupiter may coincide with a big rise as the rally enters a more difficult phase. The Sun and Mars will conjoin at 20 degrees of Scorpio on Friday and this may also shift sentiment away from rehabilitated optimism to a more jittery and alarmist orientation. The coming Saturn-Neptune aspect will likely bring back a significant amount of fear and pessimism to the market. In addition, the New Moon of November 27 was quite afflicted and also suggests that December will not be kind to equities. Although the Venus-Jupiter conjunction is fairly close in that chart, Mercury is in a tighter conjunction with Mars and both are aspected by unstable Ketu. This suggests that prices will be volatile through December with sudden ups and downs. To make matters worse, the New Moon in New York features Neptune rising with Saturn in the 8th house of obstacles. This is additional evidence that the markets will see a significant move down this month, perhaps revisiting Dow 7400 or even going below it.

Indian markets made more modest gains last week as the terror attacks in Mumbai shut markets on Thursday. While I had expected higher prices in the early going, stocks ended the week fairly close to forecast levels. The Nifty ended Friday's session at 2755 while the Sensex closed at 9092. The rally will likely be extended this week as the Venus-Jupiter conjunction occurs almost exactly on the natal Uranus of the NSE chart in the 2nd house of wealth. A very rapid rise is possible so Nifty 3000 seems quite doable here. The rally is unlikely to last very long, however, Saturn is moving into a particularly dominant position in the NSE chart. As already noted, the New Moon of November 27 is not a good chart. Moreover, in Mumbai, the New Moon occurred with malefic and unpredictable Ketu rising. While Ketu can simply mean quick and sudden actions, it is also very much an anti-materialist energy that is often at odds with higher stock prices. With Mercury conjunct Mars in this chart, it presents a fairly bleak picture for stocks in December. The only question is how low will they go. I think a retest of Nifty 2525 is inevitable, and stocks will likely trade well below that level for a time.

Rally on Wall St continues

The rally continued on Wall St today as the Dow shook off a negative open and finished at 8726 while the S&P ended at 887. Asian stocks were also up by 3% as the Nifty ended at 2752 and the Sensex at 9026.

Wall St is closed for Thanksgiving Thursday but stocks globally seemed destined to pullback somewhat Thursday and into Friday. Given the shocking terrorist attacks in central Mumbai, one can't be sure if that market will even open Thursday. If it does, it will certainly move down. All in all, the rally is well under way here and will continue into next week.

US stocks rise for third straight day

Stocks in New York were modestly higher today on news of new government bailout money for the economy. The Dow again traded near 8600 today and ended at 8479 while the S&P closed at 857. Most Asian markets were higher, but India sagged towards the close and the Nifty was down over 2% to 2654 while the Sensex finished at 8695. This is the second day that markets in Mumbai failed to hold onto significant gains.

Wednesday is shaping up negatively both in India and in North America. The Nifty may even retest 2525 at some point in the next couple of days. The US is likely finished its winning streak and may probe below 8200 Wednesday.

US stocks soar on Citigroup bailout

Stocks in New York rose 6% today on news that beleaguered banking giant Citigroup would receive government assistance. The Dow closed at 8443 while the S&P ended the session at 851. The rally was more modest in Asia as the Nifty was only up 0.5% to 2708 while the Sensex was actually fractionally down at 8903.

The trend appears to be up here and tomorrow may well build on today's gains in advance of the Sun-Mercury conjunction.

Market Forecast -- week of November 24 - 28

Stocks markets worldwide continued their downward spiral last week amidst the growing sense that the recession will be a long and painful one. Despite Friday's impressive rally on the news of Timothy Geithner's appointment as Obama's Treasury Secretary, the Dow was off 5% for the week and closed at 8046 while the S&P stood at 800. On Thursday, the Dow retested its 2002 lows of 7400 while the S&P revisited lows set back in 1996. While I had expected a possible retest, I thought the markets might be content with Dow 8000 and then bounce back from there. I also mistakenly thought the low for the week would occur earlier, in advance of the perfecting of the Jupiter-Saturn aspect. As it turned out it was only the day the aspect perfected, Friday, that saw the market turnaround.

This market is clearly on its last legs of this phase of the bear market. With the passing of the Jupiter-Saturn aspect, the next major aspect is Saturn-Neptune. This is a more clearly malefic influence and will likely be felt with full force in December when those two planets are in their closest harmonic resonance. Despite the gloom that hangs over the market, however, there may well be enough time left for some modest gains over the next week or two, particularly in light of approach of the triple conjunction of benefics Moon, Venus and Jupiter on December 1. Nonetheless, the market is likely to be extremely volatile during this period so any gains are unlikely to last long and may be confined to intraday highs as skittishness will intensify as time goes on. It's possible the Dow could go to 9000 at some point here, but it's not anything one should put a large stake in. The Sun and Mercury conjoin on Tuesday so this may well have a hand in some optimistic trading patterns in the early part of the week.

Markets in Mumbai followed the rest of the world last week as Dalal Street saw losses of 6%. Thursday saw a retest of October's closing lows (2525/7700) but Friday's rally saved the day as the Nifty closed at 2693 and the Sensex at 8915. As the world slips deeper into recession, there will be no escape for Indian markets from December's decline. In the meantime some modest gains are possible this week but they will be fleeting. Even with the helpful Sun-Mercury conjunction on Tuesday, the Moon's transit of Scorpio, its sign of debilitation, late in the week may bring significant losses. High volatility in the next two weeks impose limits on any gains. From a longer term perspective, I am increasingly pessimistic about a market recovery in 2009. Rallies will occur and they may have considerable force, but they are very unlikely to return the market to levels seen in the first half of 2008. This is not a good time to own stocks for the long haul as it may be years before they return to 2008 levels.

With the ongoing turbulence last week, crude oil sold off sharply and even traded below $50. While some bounce back is possible this week, crude is headed lower into December, probably below $40. Gold rallied nicely last week to $800 and things continue to look quite positive for gold as the Sun transits Anuradha this week and into the early part of next week. I expect it to climb higher. The US dollar once again was the beneficiary of fear in the market as it rose against most currencies. The Euro managed to hold its own at 1.26, however, and it may gain a cent or two here before heading down sharply in December. The Rupee lost ground last week closing at 49.9 and is going to be on shaky ground for the next month or so and may trade in the 52 range.

US stocks rally on Geithner appointment

US stocks rallied strongly at the close on news that Timothy Geithner would be the new Treasury Secretary in the incoming Obama administration. The Dow ended the day at 8046 and the SPX closed at 800. The rally followed a similarly strong rally in Asia that saw Indian stocks rise 5% as the Nifty rose to 2693 and the Sensex at 8915.

While I expected this bounce earlier in the week, better late than never. This sets up the prospect for more gains next week.

Swimming in a sea of red

US stocks slid another 6% today to 5-year lows as the Dow closed at 7552 and the SPX at 752. Asian markets were similarly bearish as the Nifty closed down 3% to 2553 while the Sensex closed at 8451.

So is this the low for the 2008? That is the question now that the Jupiter-Saturn aspect will become exact tomorrow at 9 a.m. EST just before the open in New York. Since most energy is released in advance of major aspects, there is even more reason to believe that we are on the verge of another bear market rally. As the aspect separates during Friday's session in the US, there is a very good chance that sentiment will finally shift.