US markets staged an impressive rally last week as the Dow powered above the 9000 mark by Friday and finished at 9034 and the S&P at 931. While I had wondered if the Mercury-Jupiter conjunction might provide enough of a midweek lift for 8800, Friday's rally was surprising. In retrospect, there some good rationale for the rise given the proximity of the aspect from transiting Jupiter to the natal Sun in the NYSE chart. This aspect comes exact Monday so it's possible there may be a little more optimism left to be expressed although I think it is not at all clear with the difficult Mars-Saturn aspect on Monday. As the Jupiter aspect runs out of juice, we will see more profit taking, with Thursday and Friday perhaps being more clearly negative. Overall, I think the mood will shift to bearish this week, particularly with the approach of the Mercury retrograde station on Saturday the 10th. This station will bring volatility and uncertainty in the markets due to the close conjunction with unpredictable Rahu (North Lunar Node).
I had thought we'd have a clearer low here below Dow 8400 but now I'm not so sure. January's rally may be a very choppy affair with relatively little upside. 10,000 is only a possibility here, with 9600 a more likely target. The period immediately following the inauguration on the 20th may be the high as Sun conjoins Jupiter. Look for markets to sink lower in the last week of January as the Mercury retrograde cycle comes to a very bearish end as Mercury will conjoin malefic Mars at that time. February and March now look like the time when the market will finally go below Dow 8000 before starting a stronger rally for the summer.
Indian markets also rose strongly last week as Indo-Pak tensions eased and the RBI cut interest rates. The Nifty gained 6% to 3046 and the Sensex closed Friday at 9958. Again, the upside from the Mercury-Jupiter conjunction wasn't entirely unexpected but I wished I had surrendered a bit more to the logic of it in last week's forecast. This week may move the Nifty back below 3000, as Monday may be negative with the Sun-Ketu aspect in the NSE chart. Some gains are possible by midweek but with the holiday closing Thursday, Friday may see some major selling pressure which pushes markets lower. It seems that my previous forecast of 2700 on the Nifty may not become a reality this month and may only come to pass in February and March when markets will begin a longer trend down. The upside in January is likely to be quite limited, and it's possible that Nifty 3150 may remain a significant resistance level. Nifty 3500 seems a little too ambitious. Overall, January looks very changeable with short rallies followed by quick sell offs.
