Stocks volatile ahead of US jobs report

(3 May 2018) Stocks are looking a bit shaky this week.  While the Fed graciously left interest rates unchanged on Wednesday and Corporate America continued to post impressive Q1 earnings, investors are still not entirely at peace with the world.  Bond yields remain in an up trend as inflation threatens to undermine economic growth and the Trump White House hasn't yet figured out a way to avoid a trade war with China.  So it's no wonder that the Dow is down almost 400 points this week as markets look for their next catalyst.

The down week was less surprising to us since the planets looked a bit tense this week.   As I mentioned in the previous market forecast, the early week Sun-Saturn-Rahu alignment hinted at more downside, as did the entry of Mars into sidereal Capricorn on Wednesday.  Today's steep morning sell-off to 23,531 (well below the closely watched 200-day moving average) was likely a hangover of that Mars-into-Capricorn effect but stocks mostly recovered by the close as Mercury tightened its alignment with bullish Jupiter and Neptune.

We can see how the current planetary set up is activating the chart of the Dow Jones Industrial Average (26 May 1896).  On the plus side, Jupiter (25 Libra) is nicely situated in the 1st house while Rahu (North Lunar Node) is well-placed in the 10th approaching its conjunction with Jupiter.  But Saturn (14 Sagittarius) is still quite close to the equal 3rd house cusp at 17 Libra (N.B. the chart inception time and hence the house cusps are approximate so there is a big asterisk there). 

More problematic is that Saturn is now aligning with the Sun (13 Taurus) and Moon (13 Scorpio).  To be sure, this is not a proper full strength Vedic aspect, but I have found that these near-exact alignments are partial strength aspects which can still exert an influence.  The Saturn influence in this chart is bearish and may well outweigh the less-positive Jupiter and Rahu placements. 

The same goes for Mars, now in the first degree of Capricorn.  While it does not aspect either Venus (1 Taurus) or Mercury (1 Gemini), it nonetheless aligns with both of them using 30 degree reckoning and this should be seen as another negative influence on stocks on Friday.  Since Mars moves less than one degree per day, it may also be a factor while stocks had difficult today (Thursday). 

Ultimately, I am uncertain what stocks will do tomorrow after the jobs report.  As always, the planets offer a mixed picture where different scenarios are possible.  The alignment of Mercury with bullish Jupiter and Neptune will still be in effect so that could generate some upside at some point.  Indeed, I had noted that alignment in my previous weekly forecast and thought it could be sufficient to boost sentiment.

But "some upside" may not be saying much given how choppy trading has been this week.  Stocks can be up for a couple of hours and then fall hard later.  The problem for the bullish scenario is that there are some important negative configurations in place.  The bullish influences could outweigh the negatives but that may be wishful thinking.  I would think the downside risks are elevated and hence a negative outcome is more likely.  This is perhaps even a bit more likely given the conjunction of the Moon with bearish Saturn during the trading day.  The opposition of the Sun to the natal Saturn in the Dow chart is another minus.

The fairly high number of aspects in play suggests the moves could be large.  This is likely the case in any event as the monthly US jobs report is often a heavily traded event.  Next week looks somewhat better, however, as the Sun and Venus align with Jupiter early in the week.  Regardless of what happens tomorrow, I would think stocks could rebound early next week.  Whether it happens tomorrow or next week, the risks are real that the Dow will again reach its previous low of 23,344 or lower.

Simplified Planetary Outlook for week of May 7 - 11 (Transits only)
(N.B separating alignments are often weakening; approaching alignments tend to be strengthening)

Mon  Mercury-90-Pluto  bearish (separ)                     -1
Mon  Sun-180-Jupiter  bullish (appr)                          +2
Mon  Moon-Venus-90-Neptune  bullish (appr)            +2

Tues  Sun-180-Jupiter  bullish (appr)                          +2
Tues  Venus-150-Jupiter  bullish (appr)                       +1

Wed  Venus-150-Jupiter-180-Sun  bullish (separ)       +1
Wed  Mercury-90-Mars  bearish  (appr)                       -1
Wed  Moon -60- Saturn  bearish (appr)                       -1

Thurs  Moon-Jupiter-120-Neptune   bullish  (appr)      +1
Thurs  Mercury-90-Mars-0-Uranus  bearish  (appr)      -2

Fri  Mercury-90-Mars-0-Uranus  bearish   (appr)          -3
Fri  Sun-30-Venus-150-Pluto  (appr)                           +1

For more details and analysis on market trends for this week, this month and this year, please check out my weekly MVA Investor Newsletter.  The newsletter is published every Saturday and includes extended discussion of US and Indian stock markets, as well as gold, oil and major currencies.