Weekly Market Forecast January 23 - 27

Stocks rise on Jupiter-Uranus; Mars turns retrograde Monday

It's a good thing the stock market doesn't believe in omens.  After the sinking of the Italian cruise ship the Costa Concordia last week, a superstitious investor might well think that the disaster might somehow symbolize the imminent collapse of the Italian and European economies.  Or maybe that collapse is already happening and the sinking is simply a reflection of a larger pattern of corruption and irresponsibility.  In any event, the IMF stepped in to pledge another $600 Billion last week to stave off further banking problems and the debt talks between Greece and its creditors were reportedly making good progress.  On the basis of those more positive (and tangible) "omens", stocks pushed higher for the third straight week.  In New York, the Dow climbed 2% closing at 12,720 while the S&P 500 finished at 1315.  Indian stocks put in an even better week as the indices gained almost 4% with the Sensex closing at 16,739 and the Nifty at 5048.  The gain was not too surprising given the exact Jupiter-Uranus aspect that I mentioned last week.  This is a very bullish combination that has largely boosted sentiment in January.   I thought we might have seen more downside in the early week on the Mercury-Rahu aspect but that never materialized.  As expected, Friday's Moon-Mars aspect briefly interrupted the positive mood, although most of the intraday losses were recouped by the close.

Now that Jupiter is slowly moving away from Uranus, we may well wonder how long the optimism can continue.  Perhaps not for long.  Bullish Jupiter will gradually be losing some steam here while Saturn is due to increase its bearishness.  To be sure, I thought we might have seen more Saturnian negativity manifested in January.  The sense of caution is palpable as there are a lot of commentators that are not convinced that the EU's problems are going away anytime soon.  The various central bank interventions we have seen may simply be effective postponements of the day of reckoning. But as Saturn approaches its retrograde station on February 7, it seems more likely that this skepticism and disbelief in the market rally will grow stronger.




This week is noteworthy because another malefic planet, Mars, will turn retrograde late on Monday.  While Saturn turns retrograde twice a year, Mars' backward cycles are less frequent and occur once every two years.  It is interesting that we will see the two most malefic planets turn retrograde within a couple of weeks of each other, something that happens very rarely.  Just as Mars begins its retrograde cycle early in the week, it will be in close aspect with Mercury.  This may intensify the immediate effects of the Mars reversal.  It is therefore somewhat more likely that the market could take its immediate cue from this development and see more downside.  That said, Mars retrograde periods rarely operate like clockwork and there are also instances where it has no appreciable effect.  On Wednesday and Thursday, we will have a Moon-Venus conjunction that increases the possibility of some more positive news.

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