US Stocks were mostly flat last week as offsetting economic data was enough to maintain the holding pattern ahead of the midterm elections and this week's crucial Fed meeting. The Dow finished slightly lower at 11,118 while the S&P500 remained stuck at 1183. Indian markets fared somewhat worse as the Sensex closed less than 1% lower at 20,032 and the Nifty at 6017. While I thought the heavy planetary traffic might create a little more movement last week, the outcome was not unexpected. Monday's gain coincided nicely with the Mercury-Venus conjunction, while the midweek Sun-Ketu aspect also fit well with Wednesday's decline, even if prices rebounded somewhat by the close. Thursday was also higher as expected on the Sun-Venus conjunction although most of the gains occurred at the open.
This week could see a significant break from the recent narrow trading range as the Fed meets on Tuesday and Wednesday and will likely announce the scope of its latest round of stimulus measures, so-called QE2. As far as stocks are concerned, bigger is better so any amount of treasury buy backs in excess of $1 Trillion will likely spark some buying. This seems unlikely, however, as Fed bankers have been hinting that QE2 will likely be smaller, perhaps closer to $500 Billion. Since this number has largely been discounted already by the market, it could possibly spark a "sell the news" reaction. Interestingly, the Reserve Bank of India also meets on Tuesday so that will be another important piece of information for the market to consider. The consensus view is for a modest 25 point hike as the RBI tries to tame inflationary pressures.
In astrological terms, the early week has a decent chance for gains as Venus, Mars and Pluto form an alignment on Monday. Tuesday and Wednesday look more uncertain as Mars forms a close aspect with Ketu, the South Lunar Node. Mars-Ketu aspects are very unpredictable and are often connected with fast-changing circumstances. Since these are both considered negative planets, there is a greater likelihood that markets will selloff midweek, perhaps in reaction to either the US midterm elections or the Fed announcement. The possibility of a major reaction to the news is boosted somewhat by the fact that Ketu is involved in a close opposition to Pluto. While this opposition will become exact early next week on Nov 9, some of that energy may be released through this Mars aspect here. The end of the week looks somewhat more stable as Thursday's Mercury-Jupiter brings together two positive planets.
"Doubt is not a pleasant state but certainty is a ridiculous one." -- Voltaire
