Halloween treats on Wall St as stocks rise again

US stocks rose 1.5%, as the market posted its largest weekly gain in over 30 years. The Dow finished the session at 9325 while the S&P closed at 968. Global markets continued their rally earlier in the day, as Indian stocks soared 7%. The BSE Sensex closed at 9788 while the NSE Nifty stood at 2885 at the close of trading. I was clearly mistaken in my expectation for weakness here as the the market has put together several consecutive up days for the first time in several weeks.

Nonetheless, I remain convinced that next week will see another sharp move down as the tense Venus-Saturn-Uranus configuration sends a shock to the markets. The aspect becomes exact on November 4, and as I've said previously, it's very possible that the market may have to react to some unforeseen developments in the US election. While I would not rule out another up day Monday in the US, I do think we are headed down over the next two weeks, probably to a retest of 7773 on the Dow and 7697 on the Sensex.

US rally fails at the close

New York closed down 1% after the Fed cut its prime lending rate 50 basis points to 1%. The Dow had been up over 9300 but sold off sharply in the last 15 minutes and ended the day at 8990 while the S&P closed at 930. Indian stocks were up modestly on the day with the Sensex at 9044 and the Nifty at 2697.

I had thought the market might hang on to more of its gains today, but it was not to be as bearishness returned at the close. This sets up a more negative sentiment Thursday and Friday and going into next week. There is a veritable Sword of Damocles hanging over this market as Mars moves under the exact aspect of Saturn in the next few days just as Saturn and Uranus are set to oppose one another early next week with the money planet Venus getting caught exactly in the middle. Look for volatility to increase here and we will likely see 8100-8500 intraday by Friday on the Dow. A retest of 7773 is more likely Monday or Tuesday. The Sensex will likely trade below 8000 on Friday, with closes below 7500 next week.

US stocks stage huge rally

In a stunning and dramatic rally, stocks soared amidst growing signs that the worst of the credit freeze was over. The Dow was up over 800 points and closed at 9065 while the S&P finished at 940. The rally was a continuation of a rally that began overnight in Asia and specifically, Hong Kong, where buyers rushed in to buy up bargains.

I did not foresee this rally, although I was fairly tentative about the market sentiment in advance of tomorrow's Fed meeting and that that some gains midweek were likely. In my weekly forecast I also noted the possibility of a Tuesday afternoon rally ahead of the Sun-Moon conjunction, although I had no inclination that we would witness such as huge upswing. While I am still cautious about this market, I do think that the strength of this rally should not be underestimated. A retest of the 2003 lows in November seems improbable now, and even a retest of 7773 is going to be a purely speculative play. Tomorrow will likely see another plus day ahead of the meeting and some selling afterwards but likely positive overall. 9500 is possible. But Thursday and Friday still look quite negative to me, so I think the market will once again trade down towards the 8500-9000 range. For those thinking of closing out short positions, that might be the a good opportunity. Monday also seems negative from here, so I would be reluctant to take on any large long positions this week. The market will likely continue to be volatile for another week or two. But on balance I think November will be positive, especially in the second half of the month.

Rally fails as stocks slide 3% at the close

After spending most of the day in positive territory, stocks in New York fell sharply at the close and ended down across the board. The Dow lost 200 points and ended the day at 8175 while the S&P closed at 848. While today's session did not retest the Oct 10 lows, it was somewhat noteworthy in that it was the lowest close yet. The negative mood followed mostly bearish global trading as Indian markets fell over 2%. The Nifty continued to probe the downside getting as low as 2252 intraday before closing at 2524. The Sensex similarly dipped below 8000 before rallying to finish at 8509.

In the end, my call for a retest today was overstated, although the day did end up negative. I am maintaining my basic position here that a significant retest is imminent and may come as soon as tomorrow, although I am not holding my breath on it. We may well see a close below 8000 and an intraday retest of 7773. I think the retest of the 2002-03 lows may have to wait until Friday or perhaps next week. And indeed, there is a chance they may not come at this time at all. Look for Indian markets to retest their intraday lows by Friday and into next week.

Market Forecast -- week of Oct 27 - 31

Global stock markets continued their downward spiral last week as investors weighed the implications of a prolonged worldwide recession. US stocks lost 6% as the Dow closed Friday at 8378 while the SPX stood at 876. This was largely in keeping with last week's mostly bearish forecast as the market prepared itself for a retest of the Oct 10 lows this week with Friday's harried decline.

This week I think it is certain we will see a retest of the recent lows and in all likelihood the 2003 lows also. This may occur as soon as Monday the 27th as the Moon conjoins Mercury in a negative alignment with both malefics, Mars and Saturn. Indeed, Monday looks like the most negative day this week so it is likely we will see a close below 8000 on the Dow and 840 on the SPX. I would not be surprised to see 7500 on an intraday basis. Tuesday will probably begin negatively but there is a good chance for a rally in the afternoon in advance of the Sun-Moon conjunction later in the day. The market may rally on Wednesday but the end of the week looks quite unstable and probably negative as Mars comes under the exact aspect of Saturn.

In terms of when the interim low will be reached, I'm still not certain if it will occur this week or next week. While this week's planets look worse than next week's, it is possible that this reflects a greater percentage decline rather than the bottom of the market. Monday will probably see the larger loss and it may well prove to be the interim low, but that may also occur Friday the 31st or even sometime next week, albeit will less dramatic single day drops. More cautious investors would do well to consider covering some short positions Monday just in case Friday does not quite return to Monday's levels. And with some kind of modest rally likely in November, it may be worthwhile to take some speculative long positions during the down days this week and next.

Indian markets were savaged last week after the RBI left rates unchanged Friday. The Nifty lost 12% in a single day and closed at 2584 while the Sensex ended Friday's bloodbath at an unbelievable 8701. My forecast had been fairly bearish about last week and correctly noted that Friday (and this Monday) would be the worst day(s). I also wondered aloud if 2000 on the Nifty was a possibility now. What seemed unrealistically gloomy last week, now seems much more plausible. This is a level with some technical support dating back to 2005 and given the probable volatility over the next two weeks seems more reachable. That said, I think that the greater portion of the declines have already taken place with the Mars conjunction to the BSE Rahu. Even with the likelihood of a decent November rally, investors should be cautious as December looks quite negative again. If the Nifty manages to stay above 2000 here, say, with lows in the 2200-2400 range, it may ultimately test that support level in December. With a shortened trading week for the Diwali holiday, look for another big down day Monday with a gain Wednesday, followed by another down day Friday.

With the ongoing financial turmoil creating high levels of fear, the US dollar has taken flight. As predicted, the Euro fell below 1.30 last week and opens Monday at 1.2624. With the Moon-Mercury conjunction occuring right on top of the natal Euro Mars on Monday, look for another huge sell off, perhaps as low as 1.20 by Tuesday morning. Friday may see the Euro fall below 1.20, perhaps decisively. Even with a rally later in November, the US dollar will likely rally again against the Euro and most other currencies in December with the greenback hitting a high around December 12. The trend will likely reverse after that. In all likelihood, the above pattern will apply to the Indian Rupee also with further declines in the next two weeks of 5-10%.

Crude oil also plunged last week amidst fears of economic slowdown and the US dollar appreciation and closed at $64. This conformed well with last week's forecast for crude below $70. $60 seems inevitable this week as the Futures chart is still heavily afflicted. Transiting Sun conjoins Saturn early in the week while transiting Mercury opposes Mars at the end of the week making for very bearish bookends. Look for an interim low in crude next week somewhere in the $50-55 range.

Gold also experienced sharp declines last week on the US dollar rally and closed Friday at $730. This was in keeping with our expectations that gold is headed to the $650 support level by December, perhaps sooner. Look for gold to plunge Monday as transiting Mercury is in tense aspect with the Futures natal Saturn. I would not be surprised to see it fall below $700 then, or perhaps later in the week. With transiting Ketu conjoining the natal Moon in this chart, look for gold to fall further in the next two weeks. The retest of these early November lows (perhaps around $650) will occur in mid-December.

US stocks drop 3% on global recession worries

It was another losing day on Wall St. as stocks probed ever closer to the Oct 10 lows as investors contemplated the grim possibility that the US recession may go global. After falling below 8200 at one point, the Dow closed at 8378 while the S&P ended trading at 876. The New York decline followed an even more negative session in other world markets. In India, the RBI unexpectedly left rates unchanged and the markets sold off precipitously as the Nifty lost 12% and closed at 2584 while the Sensex finished at 8701.

India's disastrous decline was somewhat foreshadowed in the Mars conjunction to natal Rahu in the NSE chart I had mentioned earlier. While I was calling for a generally day negative across the board, I wasn't quite prepared for the extent of panic in Indian markets. I still think we're at least another week from the bottom, but India may have seen the worst of this decline with this 12% loss today. Still with a lot of support near the 2000 level on the Nifty, one wonders if it can go all the way there in the next two weeks. Monday is shaping up to be very negative globally and in the US in particular. I'll post more details in my weekly forecast.

US stocks rally 2% at the close

After yet another mostly bearish day of trading, US stocks rallied near the close as the Dow closed at 8691 while the S&P finished at 908. The optimism borne in New York followed a negative day in Asia as the Nifty closed below 3000 to 2943 and the Sensex likewise broke below another major psychological level of 10,000 and ended the day at 9771.

With the long-awaited up day now behind us, we can look towards tomorrow for an indication of next week's trends. With Mercury applying towards Rahu's aspect while Mars simultaneously applies to aspect Rahu, it is hard to make a convincing case that this rally will continue. While I think Monday's planetary influences are clearly worse, Friday's also seem somewhat negative.

US stocks plunge 6% on corporate earnings outlook

The full-fledged gloom returned to Wall St today as stocks sold off sharply on an increasingly bleak profitability outlook. The Dow closed at 8519 and the S&P ended the session down 6% at 896. The mood in Asia was also negative as the Nifty closed down 5% to 3065 and the Sensex at 10,169.

It seems the market is accelerating its pace for a retest of the Oct 10 lows and will in fact get there by Monday Oct 27. While I had thought we would see more upside this week, the overall trend is more or less in keeping with our expectations. I'm even less certain about tomorrow's session than I was about today's (which was incorrect) as there are some divergent indicators both ways. With the Moon moving into aspect with the Sun and Pluto near midday, one might be tempted to say that the morning might be higher, with more selling in the afternoon. But even with the possibility of gains, this is no time to be long. By contrast, Friday and next Monday look more clearly bearish.

US markets slide 3% on earnings worries

Stocks in New York dropped today as investors began to chew over some lower earnings forecasts. The Dow closed at 9033 while the S&P finished at 955. Earlier in the day, Asian stocks surged higher as the NSE Nifty gained over 3% and stood as 3234 at the end of trading.

That "negative tinge" I mentioned yesterday completely overwhelmed whatever optimism there was that the banking system was now on more solid footing. I still think we have at least one more up day in the market this week, and Wednesday in the US (Thursday in Asia) is the best bet, as the Moon is in Ashlesha. At this point, Thursday seems like a toss-up.

NY rallies over 4%

Stocks rose sharply today on growing confidence that the worst of the banking crisis had passed. The Dow closed up over 400 points and ended at 9265 while the S&P finished the day at 985. In Mumbai, the Nifty added 2% to close at 3122 while the Sensex once again rose above 10,000 and ended the day at 10,223.

While I had thought we might have a big down day here, it seems that the expected midweek rally has arrived early. Tomorrow may have a negative tinge to it, but I'm not sure it will be enough to stop the rally momentum that is taking hold here. So look for more upside is this week, maybe back up to last week's highs. However, I remain committed to my view that by Friday, we will again be moving down.

Market Forecast -- week of October 20 - 24

US markets rebounded somewhat last week but remain highly volatile amidst continuing fears of a deep recession and global banking uncertainty. The Dow finished Friday's session 5% higher on the week and opens Monday at 8852 while the SPX sits at 940. While I had not expected the extent of last week's bounce, it's clear that the markets are indeed trying to form a bottom at this point and that some retest of the Oct 10 lows at 8000/840 is imminent.

This week looks mixed again although I think Monday and Tuesday looks more negative. It's even conceivable we could see a retest of those lows then, although I'm not sure there's enough malefic energy available to move the markets down another 10% in such a short time. Monday starts with the Moon aspecting Jupiter, a normally helpful influence. But with Jupiter is close aspect to Saturn and Rahu, I think Jupiter's impact here will only amplify the fear of investors and push the market down. Some up days are likely midweek, as the Moon transits Cancer Tuesday and Wednesday where it may alleviate anxiety. Some key indicators turn more clearly negative by week's end, however, as Mercury moves into bad aspect to Mars once again. If the retest does not occur this week, then a more probable date for it would be next Monday Oct 27, when many of the malefic aspects line up more exactly. Mercury will be quite close to Mars' influence, while Mars aspects malefic Rahu. I think we will see a close decisively below 8000 by then, perhaps as low as 7500.

It's possible that we will see some kind of meaningful bottom as soon as next week, so investors who are short may consider closing out some of those positions then. I still think we will see more down days than up days until at least the first week of November, so lower prices are still very possible after Oct 27. The date of the US election stands out as another possible lower low below 7500, as Saturn exactly opposes Uranus while Mars simultaneously squares Neptune. This configuration may represent an exogenous political event that could affect the markets very negatively.

Indian markets lost more ground last week as the Sensex closed below 10,000 for the first time in two years. The Sensex opens trading Monday at 9975 while the Nifty stands at 3074. While I had predicted a down week, I erroneously reversed the intraweek trend so that the positive days were actually in the early part of the week. This week looks quite uninspired although overall I think losses may not be as severe. Transiting Mars is approaching an aspect to the already afflicted natal Mars and the natal Rahu in the BSE chart so it's really only a matter of time when this explosively negative aspect manifests. My guess is that the worst of it will be Friday and then again next Monday Oct 27. The downside potential from this aspect is very large and I think we will see another big drop over the next two weeks, certainly well below 3000 on the Nifty. There's a lot of technical support at 2000 but that seems too large a drop to consider seriously. In the meantime, the start of the week looks negative as the Nifty may dip below 3000 with some rebound rallies possible into Wednesday or Thursday.

With stock markets bouncing back last week, the Euro managed to close the week mostly unchanged at 1.34, as late week pessimism erased the early week gains. With stocks preparing to fall again this week and next, I would look for the Euro to easily break below 1.30. We could see a big drop of 2 cents or more early in the week as the transiting Sun opposes the natal Saturn in the Euro chart. Friday and next Monday also look very bearish and likely reflects a further gain in the US dollar as a safe haven amidst volatile stock markets.

As predicted, crude oil traded below $70 last week although it rallied slightly on Friday to close at $72. I think we are likely to see more trading below $70 this week although there will still be some strength in the prices. Sentiment will turn very bearish by the end of the week, however, as transiting Mars opposes the natal Venus and the Sun conjoins natal Saturn in the Futures chart. In all likelihood, crude will be below $65 by next week, perhaps as low as $60.

Gold prices collapsed further last week as bullion closed at $788. While I had expected to see prices below $800 by November, this early extreme bearishness was a little unexpected. Any rallies will be very short lived this week as the major move down in gold will continue for the foreseeable future. Tuesday and Wednesday look best for gold this week as transiting Mercury conjoins the natal Jupiter in the GLD chart..

NY stocks fall at the close

It seems that even Warren Buffett can't save this market. After the billionaire investor (or perhaps philanthropist?) announced he was buying US stocks, the markets valiantly attempted to rally but ended the day down once again. The Dow lost 127 points and ended the day at 8852 while the S&P finished at 940. Indian markets once again got hammered and declined 6% as the Nifty closed at 3074 while the Sensex closed below 10,000 for the first time since June 2006.

Today's ingress of the Sun into Libra, its sign of debilitation, has certainly not changed investor sentiment. In fact, I would argue it is a sign that sentiment will get worse in the short term, particularly as Mars comes under the aspect of Saturn over the next two weeks. But more immediately, Monday is looking quite negative and we could see a sudden retest of 8000/840 then, or perhaps carrying on into Tuesday.

New York up 4% on late day rally

After a day of huge price swings, US markets finished strongly higher as the Dow closed at 8979 and the S&P at 946. This came on the heels of a generally down day on other world markets as the BSE closed near last week's lows and ended down 2% at 10,581 and the Nifty at 3269.

Yesterday I had wondered if the Dow might see 9000 today and as luck would have it, I wasn't far off. But the operative word there is luck. As previously suggested, Asian markets are likely to follow suit Friday as Moon is in its sign of exaltation in aspect to benefic Venus. I would expect a move up to 3400 here. But Friday in the US may be another matter altogether. That's partially because the Moon-Venus aspect perfects before the markets open so its influence will be diminishing by 9.30. The Sun's ingress into Libra tomorrow is another possible negative influence since its dispositor Venus is in malefic Scorpio. Overall, I'm not certain but the energy seems more negative here. Monday looks decidedly worse so we may be on track to retest the Oct 10 lows (8000/840) at that time.

New York markets slide 9% on retail worries

Stocks in New York succumbed once again to the growing realization there will be no quick fix to this economic downturn on the release of some very bad retail numbers. The Dow plunged 733 points and ended at 8577 while the S&P lost 9% and ended the day at 907. Indian stocks also lost ground earlier in the day as the Nifty was down 6% closing at at 3338 while the Sensex finished at 10,809.

The volatility this week has been incredible and has made mincemeat out of my daily predictions. Nonetheless, our overall bearish stance has been borne out by the failure of Monday's rally to gain a foothold. Yesterday I wondered if Thursday would be the best day for a rally. I think this is all the more likely now in light of today's drop and the better than expected Ebay earnings posted after the bell. I would not rule out 9000 tomorrow on the Dow. Friday in the US looks less favourable and Monday looks even worse. It is possible we will be retesting the Oct 10 intraday lows sooner than I thought, although next week looks like there may be a two or three day rally off the Monday lows so that might keep us in the 8500-9000 range. As always, I will refine my forecast as time goes on. But overall, I think we're still on track for a low in the first week of November, possibly between 7500-8000 on the Dow, and perhaps below 3000 on the Nifty, and maybe 9000 on the Sensex.

New York fails to hang on to gains, Dow down 1%

After a strong opening rally to 9750, the Dow lost ground the rest of the day and closed lower by almost 1%. At the close it stood at 9310 while the S&P ended the day at 998. This pattern echoed similar intraday patterns in other markets. In Mumbai, the Nifty opened sharply higher at 3650 but ultimately failed to sustain the rally and closed slightly up on the day at 3518.

I think there is still a possibility for gains tomorrow and Thursday, although Thursday's Moon-Jupiter trine looks like a more reliable indicator of a higher close. This will likely translate to a rise on Asian markets on Friday. It's possible we will again see 9750 at some point, with 10,000 as a genuine, if less likely, outcome. Overall, I think we are within 5% of the top of this rally.

New York gains 11%; Dow has biggest single point gain in history

New York markets surged today on renewed optimism that further global cooperation between governments and banks could avert disaster and minimize the damage from an imminent recession. The Dow closed up 936 points to 9387 while the S&P rose 11% to end the day at 1003. The rally built upon gains made in other world markets as the Nifty closed up 6% to 3490.

While I expected a rally to occur in the next couple of weeks, this explosive rise caught me totally off guard. I think we will likely see more upside tomorrow but watch for more tentative rallies later in the week with a negative close by Friday. Next week looks more negative than positive, although there will be at least two up days.

So everyone is asking: have we seen the bottom? I would say no. From a technical perspective, the relatively low volume of 1.5 billion shares is a clue that this is not a durable rally. I think this rally may top out at 9500 to 10,000 on the Dow, (perhaps 3800 on the Nifty) but we will be headed down soon enough. Watch for the low to take place in the first week of November. It may well be a retest of the Friday low, although I'm not certain of that. Another possible retest will occur in the first half of December.

Market Forecast -- week of Oct 13 - 17

Global stock markets crashed this week on fears the ongoing financial crisis will lead to a deep and prolonged recession. Most bourses lost between 15-20% of their value as the Dow finished at levels last seen in 2003. At the end of Friday's session, the Dow stood at 8451 while the S&P closed at 899. The New York indices bounced off key support levels (8000/840) during Friday's trading and thus prevented a full-blown market panic. While there was no single day decline that warranted the term "crash", it's clear that these markets capitulated this week. This confirms my prediction over the past weeks and months that early October would see a crash or crash-like event. Specifically, as far back as early September, I had isolated October 9-10 as the most likely dates for the most serious decline. Thursday October 9th saw the biggest single day drop in this current slide as American markets fell over 7%. On the 9th, Saturn's exact tense aspect with Rahu was punctuated by close aspects of the Sun and Moon and provided the downside energy for the markets to sell off hard.

Markets will now attempt to form some kind of bottom over the coming weeks through a process of rally, failed rally, and retesting of the the Oct 10 intraday lows.
This week looks mixed at best as the early part of the week may see more downside probing of 8000/840. Although the aspect is now separating, Saturn is still quite close to Rahu's influence so some negative hangover effects may be present Monday and Tuesday. I would not be surprised to see 8000 breached intraday and a lower close from current levels is likely. Monday's close looks especially weak, so that might be the temporary bottom. Tuesday's Full Moon occurs in Pisces but fortunately is largely unafflicted, a possible sign that the next 29 days may not see significantly lower low. Mercury turns direct Wednesday afternoon so that is another possible indicator that sentiment may be improving. Overall, I think the market will finish near current levels although a downside bias seems more likely. Next week looks somewhat better although I don't foresee any major rallies until November.

As predicted, India's markets got clobbered last week as the Sensex shed 16% and Nifty posted a 14% loss as the credit freeze went global. The Sensex closed at 10,527 while the Nifty ended Friday at 3279. I'm not optimistic about prospects this week since Mercury's direct station occurs in fairly close tense aspect with the NSE's natal Saturn. This will make rallies fizzle fairly quickly and give more courage to those who are shorting the market. I think some intraday trades below 10k/3100 is quite possible although I do not expect any kind of massive decline here. By Friday, we'll probably be modest lower from current levels.

With all the fear in the markets, most currencies fell against the US dollar which acted as a safe haven against uncertainty. Although I was partially correct in calling for a stronger Euro last week, Friday's mayhem erased the midweek gains and it ended slightly above 1.34, down over 3 cents on the week. The Euro is going to fall further this week as the Sun comes under the influence of natal Ketu. I think 1.30 is very possible at some point this week as the US dollar rally will continue for the foreseeable future.

Last week's prediction of a huge decline in crude oil prices was correct, as crude was sideswiped by recession fears and closed Friday at $77, down from $94. This was even lower than my low range target of $80. Crude will probably go below $70 this week although I think there may be some strength later on and into next week that may bring it temporarily back above $70, perhaps even to $75.

Gold's safe haven status came into question as it sold off Friday and closed at $854. While gold fared better on the week than I expected, its sell off Friday was in keeping with our forecast. Gold listlessness here amidst the financial chaos ought to be food for thought for gold bugs. It is very unlikely to rally as long as banking fears are front and centre. It is likely to be flat at best or go lower in the early going, with Friday perhaps as a gain leading into higher prices next week. Depending on how low it gets this week, we may see $900 briefly again next week but not much more. Early November looks very bearish.

Stocks in freefall; Dow below 9000

In the face of a torrent a bad economic news including global bank nationalizations, investors lost hope late this afternoon as markets sold off over 7% in New York. The Dow closed below 9000 for the first time since 2003 and finished the day at a bracing 8579 while the S&P ended trading at 909.

While not quite 'crashworthy', this was more or less in keeping with my standing prediction for a large percentage decline (5-10%) for today, October 9th.

I believe there is more downside tomorrow, although my sense is much of the negative planetary energy has already been expressed. It's possible we will see a further decline to the much-talked about support level of 7500-8000, but I think there will be a lot of buyers at 8000 so we should expect a lot of intraday volatility. Of course, it's conceivable that the Dow goes below these levels, but it's not probable and even if they do, they won't stay there very long.

I think Friday will be the much-sought after capitulation and near term bottom after which we will rise into next week. We are now facing a two month bottoming process where there will be some retesting of the lows we likely make tomorrow. Early November is the first probable retest, and then again in the first two weeks of December.

Markets teeter on the edge

Markets in New York were volatile but ultimately negative today in the wake of this morning's coordinated 50 point rate cut. The Dow closed down almost 200 points to 9258 while the S&P 500 lost over 1% to end the day at 984. It's clear that the sentiment is sufficiently negative that not even an across the board cut from the Fed, ECB, BOE, and other central banks around the world spurred investors to believe in the immediate viability of equities.

For the past several weeks and months, I have been writing about the likelihood of a major decline in the second week of October and so far that prediction has been fulfilled as the Dow has broken decisively below 10,000. However, I had reserved a special place for the end of this week, particularly for October 9th. According to my understanding of the planets, this time window showed the greatest potential for a sell off. The Sun is moving under the influence of Rahu while conjoining the natal Saturn in the USA chart. Tomorrow morning, the Moon conjoins the natal Ketu of the USA chart. Previously I had suggested that a worse case scenario had been 9000. I now think I was being overly conservative in order to avoid seeming alarmist. While I had thought we would be retesting the 2002 lows of 7500-8000 by November, it's very possible that we might see those levels as soon as tomorrow or Friday. So will this crash actually happen tomorrow? Yes, it could although I acknowledge a margin for error that extends over the weekend to next Tuesday (the US markets are closed Monday). Alternatively, it's also possible a full blown crash may be averted for a few weeks until November and we may only see another big down day on the order of 5-10%.

Rate cut spurs weak morning rally

Markets have reacted half-heartedly to the coordinated rate cuts of 50 basis points this morning. The Dow was up over 100 points in early morning trading.

I think we may be in the red again by this afternoon as Moon is in hard aspect with Saturn. This peaks in the last two hours of trading in New York. Look for a late day sell off.

Markets continue to bleed red; Dow closes below 9500

After a small rally on the open, markets in New York resumed their downward spiral despite strong hints of an imminent cut from Fed chair Ben Bernanke. Stocks fell over 5% and broke through some important psychological support levels as the Dow closed at 9447 and the S&P at a shocking 996. We're clearly in uncharted waters here. While I had wondered if we would see a rise today, the bearish mood shows no signs of lifting. Even if there is a relief rally tomorrow, Thursday still looms as a possible big down day that could take us down to 9000.

Indian markets similarly started off in the green on the strength of the RBI rate cut, but succumbed to selling pressure and ended unchanged. It seems that Nifty 3400 may be breached quite soon before any kind of rally. Look for 3000 by November.

After the smoke clears this weekend, I think the market will stabilize from about Oct 15 to 23. This might be enough reason to try to cover some short positions this week. Another move down is likely after that. It seems that we may get to 8000 by November. Wow.

Oil is moving with stocks and closed mostly unchanged at $89. Another move below $85 is in the cards.

As suggested in our forecast, the Euro had a nice bounce today and finished at 1.3612. Any rallies here are potentially lucrative shorting opportunities.

Gold had a good day and closed up 2% at $886. Rallies may be cut short in the days ahead especially with the approaching Sun-Rahu aspect.

World markets slide on recession fears

World markets continued last week's sell off today as European markets fell over 7%, Asian markets over 5%, and NewYork finished down almost 4%. At its worst, New York was down 9% as the S&P dipped to 1001 intraday. This decisive break of 10,00 on the Dow is a stark confirmation of our forecast for today's action. Tomorrow may see a relief rally but this is definitely no time to go long. Look for another big sell off Thursday or Friday that puts markets closer to 9000. As a basic position, I would stay short until mid November at least.

Gold finally got a boost from this turmoil and closed at $866. I think there may be intermittent rallies to $900 but long positions should be handled with care as gold will decline precipitously very soon. Gold over $900 might be a good short term shorting opportunity.

As predicted, oil continued its downward trend and closed down $7 to $86. My forecast for $80-85 is now looking overly conservative. There is a lot of downside potential to crude over the next few weeks and so I would stay short.

The Euro also continued to move down as it closed at 1.3511. I had thought the bear market in the Euro would take a bit of a breather this week. Let's see how the rest of the week plays out. I would stay basically short on the Euro over the next 60-90 days at least.

Market Forecast -- week of Oct 6 - 10

The markets took it on the chin for yet another week on growing fears that the bailout bill will not prevent the economy from sliding into a deep recession. For the week, the Dow fell 7% to finish at 10,325 while the broader S&P500 declined 9% to 1099. While I correctly predicted noteworthy declines for Monday and Friday, I was far too sanguine about the week overall and underestimated the extent of the negativity. I will note that I was correct in calling for some kind of midweek rally, although it sputtered at 11,000, which was well below upper level expectation. Nonetheless, our default bearish stance has positioned us well as we head into what will likely be another difficult week after the markets sold off Friday on news of the passage of the bailout package.

We're now entering what I believe is the most bearish period so far as the Sun conjoins Mercury under the influence of Rahu on Tuesday while Saturn and Rahu are in tense aspect. A number of bearish hits to pertinent natal charts reinforce the notion that we may be facing an even larger decline this week. Taking it as a proxy for the whole market, the Nasdaq chart, for example, has transiting Mars conjoining the Descendant early in the week. This is a very bearish indicator and completes a t-square with the natal Moon-Mercury opposition. At the same time, the Sun-Mercury conjunction occurs atop the natal Uranus in that chart. Meanwhile, transiting Venus exactly opposes the natal Saturn on Tuesday. So there's no shortage of potential difficult energies there, although it is significant that they appear to focus on earlier in the week, mostly on Monday and possibly Tuesday as an indicator of larger declines. I expect the Dow will break decisively below 10,000 by intraday Tuesday at the latest, although the Tuesday close and Wednesday's trading might see a decent recovery back above 10,000 or higher.

I still think there is a potential for a more serious decline later in the week, especially on Thursday as the Moon conjoins Rahu and increases the intensity of the larger planetary configuration. While I've written previously about the possibility or even likelihood of a crash-type scenario in this time period, I don't want to fall into the common trap of 'astrological sensationalism' here. (or maybe I already have!) It's conceivable that the larger decline may be delayed until early November, as October sees high volatility and more downward probing below 10,000. That is a very real possibility that would not surprise me. But we may also be on the verge of the largest one-week decline here, perhaps over 10% and 9000 on the Dow, and investors should be aware of this potential. In a nutshell, I'm predicting a very (i.e. >5%) negative week , the only question is how negative it will be. I still think the markets are eventually headed down to 8000 or below by November, or December at the latest.

Mumbai lost 5% last week as Monday's afflicted New Moon in Virgo set up a negative pattern that proved to be too much for markets. The Nifty begins the week at 3818 while the Sensex opens at 12,526. There's little reason to be optimistic this week as Ketu bears down on the NSE natal Mars, and we could see a decline that pushes the Nifty back to 3600 or below. Friday looks terrible.

With Chinese markets were closed for the week, Tokyo could not escape the bearish mood as the Nikkei plunged 8% and stands at 10,938. It's very hard to imagine how the Nikkei will go anywhere but down this week with the double barrelled affliction to the natal Mercury from Saturn and Rahu. There's a good chance of breaking below 10,000 at some point. On Thursday and Friday, transiting Mars will aspect both Jupiter and Venus in the natal chart, which may be an indicator that the larger decline for the week. This is a hugely afflicted horoscope.

As predicted, last week the Euro collapsed below its support level of 1.38 as it lost 6 cents and closed Friday at 1,3784. While my outlook on the Euro remains hugely bearish, declines this week will be more modest and we may even see some gains. The weekend moves by European governments to shore up the banking system will likely help support the Euro somewhat this week as Venus conjoins the MC of the Euro ETF chart although any upside will likely be confined to early or mid-week.

Oil prices plunged last week on recession fears and finished below $94. While I had forecast prices below $100, I had thought they would not occur until this week. I expect this major decline of crude to continue and even accelerate this week, perhaps as low as $80-85, as significator Saturn is in tense aspect to Rahu with Sun and Moon playing supporting roles. In the Futures chart, transiting 12th lord Mars takes aim at the Moon-Saturn conjunction with lower prices as the most likely outcome. Even if there is some kind of relief rally towards the end of October, I wonder if we've seen the last of $100 crude for a while.

As predicted, gold continued its decline last week, although I underestimated the bearishness at it fell back over $50 to $833. As I wrote in my market updates this week, I no longer think there is enough upside in gold to push it back to $1000. There will be some smaller rallies that will likely hit $900 over the next few weeks but gold will start to move more negatively as we head into November. This week looks bad, especially towards the end of the week and we may see gold fall below $800 once again. If we manage some up days earlier, it may somewhat offset the declines that are likely for Thursday and Friday. Next week looks much better for gold.

Stocks sell off after bailout bill passes

The mood turned sour in Friday afternoon's trading after the House passed the bailout bill. The Dow dropped over 300 points in the afternoon and closed at 10,325, revisiting Monday's previous lows. The S&P finished at an anemic 1099.

In my weekly forecast, I had been uneasy about Friday's action given the position of retrograde Mercury in aspect to Rahu. This expectation was largely borne out given the sharp reversal that occurred. The New York market had been up 3% in advance of the House vote, and ended up over 1% in the red.

Oil declined with stocks while the Euro and gold were little changed.

So another week, another 4% shaved off equities. Now it seems clear that the bailout can no longer save the market. The stage has been set for next week's possible carnage, which seems to centre around Thursday or Friday. Breaking through 10,000 seems to be a certainty, and it will likely be a lot lower than that. We could be down another 10% before there's a relief rally.

The Gloom Descends

Markets in New York stumbled again and lost 4% today on growing recession fears as a bad employment report nullified any possible bounce from the successful Senate vote on the bailout plan. The Dow closed at 10,482 and the S&P finished at 1114. It is becoming increasingly clear that the bailout plan will not be enough to right the sinking ship. Although it is possible there might be a small bounce if the House of Representatives passes it Friday, this likely won't amount to much. It's possible that Monday and Tuesday of next week may be positive but our orientation should be short here as risk increases as time goes on. I'm expecting a decisive move below 10,000 on the Dow next week. 9000 is a worst case scenario for October.

Perhaps more important is the flight to the US dollar that is crushing all comers including the Euro, crude and gold. As predicted, the Euro is in free fall here and ended the day barely hanging onto support levels at 1.3809. And as fears of a major slowdown grow, crude oil fell back $5 to $93. Gold was hammered and lost 4% today and closed at $840. Gold is quickly losing its safe haven status now, and the US dollar has reaped the rewards of the current crisis. I believe this trend is likely to continue for the next few months. It seems that my forecast for $1000 gold will not be realized. We might see $900 at the end of next week, but rallies should be treated as exit points and opportunities for going short. This also holds for crude and the Euro.

By the end of the year, we may see gold at $650, the Euro at 1.20 and crude at $70. This is still in keeping with my previous medium range forecast. The only significant revision is that the short term upside potential has largely already been realized.

Markets flat in advance of Senate vote

New York ended largely flat today as traders avoided commitments in advance of the Senate vote on the financial bailout bill. Oil backed off to $98 while gold held firm near $890 in the day's trading. As I write this, the Senate has just voted in strongly favour of the bill and oil has gained a dollar while gold has dropped $13 to $874.

While the bill was widely expected to pass the Senate, the margin was encouraging for nervous investors (74-25) and should push markets higher tomorrow and likely into Friday. I'm still not convinced the rally will extend to the close on Friday, but certainly we should see some decent gains here. Gold may become a great buying opportunity at $850.

As predicted earlier in the week, the Euro has fallen below 1.40 and may go lower. It closed today at 1.3967.