Stocks moved mostly higher last week as growth prospects in emerging economies lifted sentiment. In New York, the Dow was higher by more than 1% closing at 10,606 while the S&P500 finished at 1125. In Mumbai, the atmosphere was almost euphoric as India continued to attract interest from foreign institutions. The Sensex jumped another 4% to close at 19,594 as the Nifty ended the week at 5884. Gold also made new all-time highs closing near $1280. Market sentiment appears to be flourishing under the protective umbrella of the Jupiter-Uranus conjunction as stocks have rallied off their late August lows. While I expected this pairing would act as a sort of insurance policy against any major declines, its ability to block out most other influences has been a little surprising. What was less surprising, however, was the early week strength that coincided with the Mars-Jupiter aspect. If the market was set to rise, this seemed like the combination to do it. However, we didn't get much negativity afterwards despite more aspect activity involving bearish Saturn.
So when it all this Jupiterian optimism going to end? Next week will offer more clues to that question since we will be in the post-conjunction phase of the Jupiter-Uranus aspect. As a rule of thumb, planetary aspects begin to lose their power only after they are exact and begin to separate. Today, September 18, Jupiter exactly conjoins Uranus. By next week, it will slowly begin to move away from Uranus and thereby begin the process through which its energy begins to fade. Well, that's the theory anyway. There are many exceptions here, but it is nonetheless worth considering. And while Jupiter's optimism may be waning, gloomy Saturn maybe ready to assume a larger role. While the aspects with fast-moving Mercury and Venus did not deliver much in the way of caution, Saturn gets another opportunity to strut its stuff thought its square aspect with Ketu -- aka the South Lunar Node. The aspect is exact on September 27 and is perhaps a more reliably bearish influence since Ketu is considered a malefic planet, just as Saturn is. by contrast, both Mercury and Venus are both considered benefic influences. In this case, then, malefic planet + malefic planet = a very negative result! Just when the effects of this aspect will be felt is a little unclear since these distant, slow moving planets often require triggers from faster moving planets.
This week promises to be quite eventful. Not only will we get our first glimpse of what a post-Jupiter-Uranus world feels like, but the Sun will aspect this conjunction on Monday and Tuesday. On paper, this is a very bullish alignment that ought to increase risk appetite and put investors in a buying mood. At the same time, there is a sense that this aspect could act as a final cherry on top of the this recent run-up, since after this aspect is out of the way, there won't be much else Jupiter can do for an encore. This sense of finality is reinforced since Saturn-Ketu looms just two degrees out of range waiting to assume center stage. To add to the excitement, there is also a tight Venus-Ketu aspect in the early part of the week that may distort buying patterns in some way. Fed Chair Ben Bernanke is due to speak Tuesday, so the fate of the markets may well hinge on his comments. If he offers new stimulus measures to boost the sagging economy, there is a chance for a sudden rally. But with Venus harmed by Ketu's aspect, I wonder how long that buying opportunity may last. Days, hours, or even just minutes? There is an instability here that would seem to incompatible with a durable rally, both in the economy and the stock market. Tuesday should be very interesting indeed. I would not be surprised with any outcome, but I do think the market is quite vulnerable here.
"In practice, randomness is fundamentally incomplete information."
-- Nassim Nicholas Taleb
