Stocks staged a modest retreat last week as more investors entertained second thoughts about the sustainability of the rally. After trading below 1000 earlier in the week, the S&P ended the week at 1016 while the Dow finished at 9441. In Mumbai, caution was also the watchword as stocks fell four sessions out of five with only Friday's gains precluding a rout. The Sensex ended the week at 15,689 and the Nifty backed off last week's highs to close at 4680. While I had been ambivalent about the ultimate outcome last week due to the uncertain impact of Jupiter, the basic contours unfolded as expected with weakness early on followed by gains later. Monday and Tuesday saw the bearish effects of the Mercury-Mars aspect prevail while the approaching positive aspect between Venus and Sun at the end of the week coincided with solid gains. In the end, Jupiter's minor aspect with both Mercury and Mars did not provide enough encouragement for bulls to assume long positions but rather served to magnify the selling pressure, as Tuesday's across the board decline in New York was the sharpest in several weeks. While Jupiter is most often a bullish influence because of its optimistic nature, it is also a planet that can sometimes serve only as an accelerator to prevailing trends regardless of their direction.
With US markets shut for the Labor Day holiday, Monday will feature the beginning of the retrograde Mercury cycle on September 7. Since Mercury is the planet associated with trade and commerce, its reverse motion is often indicative of negative or sideways markets as investors take a 'time out' to review their positions and re-assess their portfolios. The Mercury retrograde cycle will last until Sept 29 and should be seen as an additional bearish factor that will tend to work against the markets extending its rally. With Saturn entering sidereal Virgo on Wednesday, we may see traces of its energy manifest in the world as it changes sign. Saturn represents structure, authority, loss and tradition so some of these themes may be more in evidence in the coming days. This needn't have an immediate effect on the market although the early week period may be more prone to selling. We may see stocks rebound strongly Wednesday and Thursday (and possibly into Friday, esp. in Asia) on the opposition aspect between Venus (24 Cancer) and Jupiter (24 Capricorn). This combination of benefics may promote spending and investing and encourage greater risk taking in the marketplace so we could well see stocks approach their previous week's highs. The fact that the Sun (24 Leo) will be in minor aspect to this opposition may increase its bullish potential. Since Sun symbolizes gold, we can expect gold to continue it recent rally, probably above $1000. Given the preponderance of difficult aspects next week, however, this rally seems very short-lived indeed.
