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.
