After slumping early in the week, markets edged a little higher last week on some positive earnings news and the prospect of more economic 'green shoots'. In New York, stocks approached their February highs as the Dow closed at 8212 and the S&P at 877. Indian stocks were mostly unchanged last week, and did not participate in some of the late week advance due to a Thursday and Friday closing. Bullishly staying above their 200-day moving average, the Nifty finished Wednesday's session at 3473 and the Sensex at 11,403. The early week declines were very much expected in light of the malefic alignment of Mars-Ketu-Pluto, although the bearishness was fairly mild. The bounce later in the week coincided with Jupiter's ingress into sidereal Aquarius and the approach of Venus to the Ketu-Pluto configuration which was noted in last week's forecast.
This week's action may also be somewhat mixed at best as the early part of the week seems more positive as the Venus aspect comes exact on Monday. While some pullback is likely on either Tuesday or Wednesday, the latter part of the week may see the bears assert themselves more forcefully as Mercury turns retrograde on Thursday morning. Interestingly, the results of the banking stress test will be released on the same day. While we should be aware that Mercury may not exert its influence immediately, this coincidence would tend to indicate some second thoughts by some investors. Mercury's influence is a very important potential ingredient for any significant correction in this recent rally. There is no guarantee that Mercury's backwards cycle (May 7 -31) will push the market lower, but it definitely inclines the market to second guessing, non-committal sideways movement, and outright bearishness.
As we've seen over the past seven weeks, the approaching Jupiter-Neptune conjunction has created a very powerful reservoir of optimism and hope that has helped to move markets higher by 30% in a very short time. It will require a significant amount of negative planetary energy to offset this bullish alignment. Retrograde Mercury, even if it is afflicted by Rahu as it is this week, may not be enough in itself to force a major correction. For that reason, we may have to wait for some of that excess Saturn energy to seep into the collective consciousness once it turns direct on May 16.
