US stocks stay strong; Mumbai rises to new high

World markets continued to defy gravity last week new yearly highs were established on many bourses, including US and India. After trading around 9600 in the week, stocks in New York closed mostly unchanged as the Dow ended at 9544 and the S&P at 1028. Mumbai was even more bullish as markets rose in all five sessions, as the Nifty closed Friday at a 2009 high of 4732 while the Sensex finished at 15,922. I had expected more downside on the Mercury-Mars-Rahu-Pluto pattern but it seems the offsetting Venus-Ketu conjunction on Wednesday may have been stronger than anticipated. As expected, we did see some more gains later in the week, especially in India, as transiting Venus improved the overall energy in the Mercury-Mars aspect. And while gold was weaker early on in the week as I had suspected it might be, it also staged a strong recovery by Friday.

This week offers another opportunity for the bearishness of the Mercury-Mars square to manifest, possibly early on when the Moon joins Rahu in Capricorn. By midweek, however, this energy may be redirected by Jupiter's minor aspect to this square. Jupiter is essentially an expansive influence so it has the capacity to enhance whatever trends are already underway. This could conceivably amplify any down move, although given Jupiter's benefic default setting towards gains, one might think it could take stocks higher also. By the end of the week, Venus will be moving into a minor aspect with the Sun, so that is another potential bullish energy source in the face of the negativity of the Mercury-Mars square and Mercury's imminent retrograde station on September 7. As the planet of trading and commerce, Mercury's condition is of critical importance in understanding the market, at least on a short-term basis. When it is strong, markets rise and when it is weak or afflicted, markets tend to fall. Its current placement in sidereal Virgo (which Mercury is said to rule according to astrological tradition) is an indicator of strength and no doubt that is one reason the market has so far been able to continue to rise despite the problematic input from the Mars aspect. But Mercury will likely come under further stress as we move into its retrograde cycle from Sept 7th to 29th.

While the overall planetary picture looks increasingly tense here, I would not be too surprised to see higher highs this week. Much will depend on what role Jupiter is playing midweek through its contact with Mercury and Mars. If Tuesday sees gains, then that will likely tip the scales in favour of more gains overall for the week and a possible new high.

US stocks rise to new 2009 high

Stocks in New York made new highs for 2009 last week as improving housing data supplied the hope necessary to extend the summer rally. After Monday's sharp decline, stocks rebounded and ended 2% to the good with the Dow closing at 9505 and the S&P at 1026. While I have a pessimistic view of stocks right now, this outcome was not that far out of line with last week's forecast -- at least in terms of ebb and flow. Monday's pullback came right on schedule with the Mercury-Saturn conjunction, even if it was fairly mild, at least in the US. I had also suggested that some gains were likely Wednesday through Friday as Mercury and Venus were involved with better planetary company. This bullish script also played out more or less as rehearsed as stocks went straight up after Monday. There was a somewhat different story in Mumbai as stocks fell over 1% for the week, although the basic trends were the same. Monday's decline was steeper (5%) and hence that perhaps better captured the extent of bearishness I was expecting. The rebound was also somewhat more muted especially since Wednesday ended down. Thursday and Friday were positive though so that was solid evidence for the benefic effects of Mercury and Venus.

The planetary focus this week is a fairly rare and powerful four planet alignment involving Mercury, Mars, Pluto, and Rahu. All these planets will be a 6 degrees of their respective signs and will therefore be in mutual harmonic resonance. In addition, Mercury falls under the full strength aspect of malefic Mars and disruptive Rahu. On paper, it's a rogue's gallery of planetary evil-doers all ganging up on Mercury, the quintessential innocent bystander and has all the makings of a bear party for all markets, including oil and especially gold. Since Mercury is slowing down in advance of its retrograde cycle, this alignment could conceivably kick-in at any time in the week, although the early to midweek may be more likely. One interesting twist here is that Venus will conjoin Ketu on Wednesday and this bullish influence could be enough to interrupt the bear party, if only for a few hours. Later in the week, Pluto and Rahu get left behind and Venus moves into the picture, so there may be more opportunity for the bulls to run again then.

Despite these new highs, it's hard to come up with too many more bullish planetary patterns in the coming weeks. Sure, there are a smattering of a fairly good aspect late this week and a potentially significant two-day multi-aspect next week, but these little pools of hope are fast petering out and there will soon be no more oases for the bulls to feed on. And with fewer good aspects and an increasing number of bad aspects, the market will soon begin to fall.

Markets cautious ahead of major planetary alignment

Stocks in New York finished slightly lower last week as disappointing retail sales weighed against improved industrial production data. After trading at key resistance levels on Thursday, the Dow closed at 9321 and the S&P at 1004. Meanwhile, Indian shares managed to move modestly higher after hitting midweek lows of 4400 on the Nifty. While still significantly below recent highs, the Nifty closed at 4580 and the Sensex at 15,411. This middling sort of outcome was more or less in line with expectations as the early week declines on the Mars-Saturn square were offset by the Sun-Mars-Jupiter alignment on Wednesday and Thursday. As is often the case, Friday's decline in New York came on the heels of this positive aspect and was not unduly surprising, particularly since our outlook is generally bearish here.

This week promises to be even more volatile as there are two very potent multi-planet alignments that form exact angles early on. Monday will feature an apparently bearish Mercury-Saturn conjunction at 27 Leo. Generally speaking Saturn contacts are considered bad news for stocks and this one is perhaps more likely to signal a retreat because Jupiter is also involved. Jupiter (27 Capricorn) sits in a tense 6/8 quincunx aspect with this conjunction and that would appear to bode poorly for markets this week. In addition, no less than four planets -- Sun, Mars, Uranus and Neptune -- are all placed at 1 degree of their respective signs Monday and Tuesday. This adds a lot of planetary fuel to the mix and could magnify any moves this week. The most likely scenario here would appear to be early week decline -- possibly a steep one -- followed by a recovery later as Venus forms a minor aspect with Jupiter on Wednesday and Thursday. Mercury's opposition to Uranus on Friday also has the potential to lift stocks, but perhaps only if we've seen real damage inflicted earlier in the week from the Mercury-Saturn aspect. The negative payload of these planets have to be released first before more positive energies can be expressed.

With Saturn approaching its opposition aspect with Uranus in September, it's very hard to imagine the market going anywhere but down. The more important matter therefore concerns how low could this retracement might go. Given all the tense aspects between now and November and the relative absence of positive ones, it seems that this decline may be much bigger than a garden variety correction.

Prepare the lifeboats.

US stocks rise on Mercury-Venus

Stocks powered higher in New York last week on better than expected employment data. Despite some midweek profit taking, the Dow rose 2% to close at 9370 while the S&P finished near a key resistance level of 1010, which was the post-crash November 2008 high. This bullish outcome was more or less in keeping with my forecast last week as the Mercury-Venus aspect provided sufficient optimism to encourage risk takers. More specifically, Monday was up as expected but Thursday's anticipated gain arrived late as markets only rose Friday. In Mumbai, worries over the monsoon trumped global cues as the indexes fell 3-4%. After some early week strength that retested key resistance levels at 4700, the Nifty ended the week at 4481 while the Sensex stood at 15,160. So we did see more upside as forecast although the gains did not hold. Interestingly Thursday was higher intraday but gains disappeared by the close. This was perhaps an instance of a generally favourable transit aspect between Mercury (12 Leo) and Venus (12 Gemini) feeding into the stressful natal position of Saturn (12 Aquarius) to produce a decline instead of a rise.

Now that the triple eclipse series is behind us, we should look at this stock rally as living on borrowed time. The eclipses have lit the fuses and started the timer so it's now only a matter of the right triggering planets coming together to release the explosive bearish energy and push prices down. This week features a couple of very strong aspects which have the potential to move markets in both directions. Mars squares Saturn on Monday but this 90 degree relationship is arguably more effective since they mutually aspect one another according to classical Hindu aspecting rules. Mars casts its 4th house square aspect forward to Saturn and Saturn casts its 10th house square aspect to Mars. Since both planets are malefic, there is a probability for negative fallout here. However, as the week progresses Mars will be influenced by Jupiter's benefic rays so that could change sentiment considerably. This is all the more likely given that the Sun will be part of this multi-planet alignment.

Caveat emptor has never been better advice.

Markets stay bullish; Lunar Eclipse this week

Stocks continued their drift upward last week on better than expected Q2 GDP data in the US. After some midweek bearishness, the Dow closed Friday at 9171 while the S&P stood at 987. In Mumbai, the Sensex touched a 13-month high intraday on Thursday before closing at 15,670 while the Nifty ended the week at 4636. This bullish outcome was mostly in keeping with expectations as the quick succession of Venus and Mercury aspects with Jupiter provided enough optimism to move markets higher. Monday's Mercury-Saturn aspect largely offset the Venus-Jupiter trine as stocks treaded water. As I expected, there was more selling Tuesday and Wednesday in the "hangover" aftermath of that positive configuration. The Mercury-Jupiter aspect on Wednesday and Thursday arrived more or less on schedule, although Wednesday was mostly down. Friday did not see any big declines despite retrograde Jupiter entering sidereal Capricorn, although that is a longer term bearish influence that will be operating for the next several months.

This week we will see the third and last eclipse in this series as a lunar eclipse occurs on Wednesday (EDT) at 19 degrees of Capricorn. Eclipses mark periods of change and instability in the world and this eclipse seems to promise that and more. The previous solar eclipse featured a close Venus-Saturn square which, I argued, foretold of coming problems and losses (Saturn) with financial markets and money (Venus). Well, we will soon see if that interpretation will be borne out by events. This lunar eclipse also has a strong Saturn aspect, this time with Mars. And as (bad) luck would have it, it is also a tense square aspect within three degrees of orb. Mars-Saturn aspects can represent situations of violence, oppression, frustration, and destruction and in the present context may indicate growing geopolitical concerns that could involve military conflict in the coming weeks. On that point, we should note that President Obama's chart is also under a lot of stress in the coming weeks as Saturn and Mercury will conjoin atop his natal Mars. While this pattern may simply represent increased frustration and failure with his health plan reforms (polls indicate he's in trouble on that issue), the Mars factor here opens the possibility of some kind of military or geopolitical problem.

This week the market may well be able to stave off the bears for a little while longer as Mercury moves into aspect with Venus by Friday. We could see some sizable moves in both directions this week, with Monday and Thursday looking the most positive on paper. So I would not be surprised to see more upside here, although with the Mars-Saturn square due to come exact next Monday the 10th and the Mercury-Saturn conjunction on the 18th, all gains should be seen as very temporary indeed. Investors would be well advised to practice their best version of Buddhist non-attachment to any long positions before this rally falls apart.

As the man with the sandwich board sign tells us, the end is nigh.