Stocks edged lower last week as uncertainty over the strength of global recovery continued to weigh on sentiment. In New York, the Dow rebounded at the end of the week but still closed slightly lower at 12,441 with the S&P500 finishing at 1331. Indian stocks followed a similar script as a late week rally wasn't enough to erase previous losses. The BSE-Sensex closed a little lower at 18,266 with the Nifty ending the week at 5476. As expected, we did see declines coincide with the alignment of Mercury, Venus, Mars and Saturn in the first half of the week. Monday's decline was larger as Venus conjoined Mars while in difficult aspect with bearish Saturn. However, I thought we might have had a little more downside on Wednesday's exact Mars-Saturn aspect. As it happened, Indian stocks were lower on Wednesday but the mood changed by the time US markets opened as New York reversed and began to rally off its lows.
Some disappointing US economic data last week saw a broad-based selloff in the Dollar as investors priced in another delay in an interest rate hike, perhaps to 2012. There is increasing chatter among commentators that further weakness in the US will force Bernanke to cobble together yet another stimulus package to keep the sinking ship that is the US economy afloat for another few months. As QE2 winds down at the end of June, rumours of QE3 may become a more important factor in the market dynamic in the weeks and months ahead. As a rule, such stimulus programs are associated with expansionary Jupiter since they aim to boost demand and invigorate economic activity. With Jupiter still taking a backseat to Saturn these days, it seems somewhat unlikely that any hint or formal announcement of QE3 will be immediately forthcoming. Saturn is moving very slowly ahead of its direct station on June 13, so the main focus is likely to remain on Saturn-type issues such as debt, slowdown and general pessimism. After that time, we may see more Jupiterian energy prevail as Jupiter forms a succession of putatively bullish aspects with Neptune, Uranus and Pluto in June and July before it makes its retrograde station at the end of August. This latter time frame is therefore a more likely window when we could see the announcement of some kind of additional Fed stimulus.
This week we may see a bit of everything. The early week again seems bearish as Monday's Mercury-Rahu aspect is quickly followed by a Sun-Saturn pattern on Tuesday and Wednesday. Wednesday is also noteworthy because there will be a solar eclipse at 17 degrees of sidereal Taurus on that day. This is likely to reflect an increase in caution in many markets including stocks and commodities. A minor contact between Mercury and Jupiter on Thursday offers some hope for a rebound, however. Friday may be the most interesting and unpredictable day of all. That is the day that Neptune turns retrograde. What's interesting about this retrograde station is that it will occur while in a tense square aspect with Mercury. This is normally a bearish combination. The complicating factor is that Neptune is sitting very close to its aspect with bullish Jupiter. For this reason, the retrograde station could end up being a positive influence, even with the dubious input from Mercury. While the final outcome is somewhat uncertain, it does suggest that a larger than normal price move is more likely on Friday.
