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.
