3 November 2018 Volume 11, Issue 45. Summary for week of 5 November 2018

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1 3 November 2018 Volume 11, Issue 45 Summary for week of 5 November 2018 Stocks could push higher but late week less positive Dollar may weaken, especially in second half Crude oil looks more mixed with some upside likely Gold choppy but with another chance to breakout higher US Stocks Stocks rebounded last week on positive earnings and hope for a trade deal with China. The Dow gained more than 2% on the week to 25,270 while the S&P 500 finished at This bullish outcome was in keeping with expectations as I thought the Mercury-Jupiter conjunction would likely produce some upside. Monday s steep afternoon decline was a bit shocking, however, even if the Mars-Saturn offered the possibility of some downside. But bulls eventually recovered as the rally went as high as the 200 DMA at 2740 and then pulled back a bit on Friday. With this initial oversold bounce out of the way, it is more of an open question what happens next. Could the rally continue from here and produce a V-shaped bottom or will there be a retest of the low at 2600? Most traders are likely waiting for results of Tuesday s midterm elections before committing significant new money to the market. The market has likely fully discounted the Democrats taking the House while the GOP keeps the Senate. Therefore, only some other unlikely scenario could change things up. If the GOP keeps the House, then stocks would likely rally while a Democrat win in

2 the Senate would be bearish. There is a FOMC meeting on Thursday, the 8 th which could impact stocks. A rate hike is very unlikely but after Friday s strong jobs report which saw good wage growth, there is a possibility of increased hawkishness in Fed language. This would be bearish for stocks, of course. The planetary outlook is mixed for November. Jupiter still looks fairly strong so I would not expect a sudden collapse and quick retest of 2600 in the coming days. It seems more likely that the mixed to bullish bias this week and possibly next week will see stocks try to push higher, even if they may not get very far. As I have suggested previously, the planets look more difficult in the second half of November and early days of December. This is an argument for a retest of 2600 by early December. I m unsure if this will produce an equal, lower or higher low but it does look like a significant pullback off some kind of interim high set in November. Longer term, I think the chances are good that the SPX will rally into January at least. Depending on where we bottom out at, this could reach the September high at 2940 or perhaps go even higher. The technicals look short term bearish but remain bullish for the medium term. Friday s red candle looked like a classic reversal after an intraday high that tested key resistance at the 200 DMA at 2760 and then reversed to close lower. It also reversed at the 20 DMA (middle Bollinger band) is now key support so that any move below that level would likely fill the gap at 2685 at least. Conversely, a move above Friday s high would be bullish for the short term and could mean a push up to 2800 or higher. In the short term, the most bullish scenario would see the SPX rise to test the 50 DMA at 2840 this week. I can t quite see it happening given the mix of planetary influences but it is nonetheless possible. Things would get more bearish if the gap fill at 2685 didn t hold as support. A move below that level could end up quickly testing The weekly Dow chart gives bulls hope that the bottom may be in. After testing the lower Bollinger band, the week ended significantly higher. And with stochastics turning higher after reaching the 20 area, there is another reason for buyers to enter new positions. There is still some risk of more downside as long as the Dow trades below the middle Bollinger bad (20 WMA at 25,500). A close above that would suggest another leg higher is possible. The weekly Dow chart only turns more bearish if there is a weekly close below last week s low at 24,122. NDX and RUT also enjoyed a strong bounce as the bottoming process entered a new phase. Like the SPX, the NDX tested its 200 DMA and really needs to remain above support at 6900 or else risk a retest of its low at Despite Trump s China trade talk, bond yields

3 may become important again after Friday s spike following the jobs report. Any move above resistance at 3.25% would likely be bearish for stocks, even if it may take a few days for the effects to be felt. This could make Thursday s FOMC very important indeed. This week looks mixed and therefore harder to call. The early week carries an elevated risk, especially on Monday as Mars enters Aquarius. This is perhaps a more logical call for a decline given Friday s ugly candle. And yet I would be surprised if we got a big selloff on Monday or Tuesday. Tuesday s Moon- Venus conjunction looks positive and would seem to give bulls a chance to redeem themselves including the very real possibility of negating any preceding downside on Monday. So while I do think a retest of 2600 (or 2532!) is likely over the next few weeks, I don t think the odds are high that it can happen this week. But we shall see. Wednesday leans a bit bearish as the New Moon looks volatile aligned with Uranus and the Lunar Node. Thursday is FOMC day and it could see some buying around the Moon-Jupiter conjunction immediately after 2 p.m. I should note, however, that this isn t a high probability pattern but merely moderate probability. Friday leans somewhat bearish on the Moon-Mercury conjunction. So if 2685 holds as support on Monday, then maybe there is a chance for another positive week. But that s a big if. I would say that the likelihood of two down days this week means that any weekly gain will be more modest. A daily or even weekly close above the 200 DMA at 2760 is possible but I think 2800 would be a reach. I suspect we will finish somewhere between 2700 and Next week (Nov 12-16) looks more bearish. The early week could see some upside or at least choppy trading but bulls should be cautious nonetheless. The higher risk days are Wednesday to Friday when Mars aligns with Uranus and the Lunar Nodes while Mercury squares Neptune. A significant pullback is likely on these patterns and it could well mark a retest of 2600, or if things turn bad quickly, even lower lows. The following week (Nov 19-23) is Thanksgiving week so there will be reduced volume and probably less volatility. The early part of the week (esp. Monday) still has some downside risk as Mars squares Jupiter. Tuesday and Wednesday look more bullish, however, so we could see an oversold bounce around the holiday break. More downside is very possible in the last week of November so bulls should remain on guard. I don t know if this will translate into lower lows (the Feb low of 2532?) but we cannot rule it out. My best guess is that there is a significant low in late Nov or early Dec. Sentiment is likely to improve in early and mid-december as Jupiter moves towards its alignments with Neptune and Pluto. The rally could extend into January 2019 and may give

4 bulls renewed hope for higher highs. I m not sure we will get there but it will seem possible in any event. February will likely see a pullback to a higher low with another push higher possible in March and April. Higher highs are therefore possible as late as April. However, 2019 as a whole is shaping up to be bearish so bulls will need to be careful. I think the biggest move lower is likely between May and August and should mark the beginning of the bear market. A test of the long term rising trend line of 2200 is quite possible sometime in Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) SPX (1 week ending Nov 9) Medium term trend is DOWN bearish (confirming) SPX (1 month ending Dec 9) Long term trend is UP bearish (disconfirming) SPX (1 year ending Nov 2019)

5 Indian Stocks Stocks bounced last week on falling oil prices, positive earnings and thawing trade tensions between the US and China. The Sensex jumped 5% to 35,011 while the Nifty finished the week at 10,553. This bullish outcome was in line with expectations as I thought the Mercury-Jupiter conjunction could help to boost sentiment. The week unfolded more or less as forecast as Monday turned out to be positive with further gains on Wednesday while Friday s Moon-Venus conjunction capped off the winning week. This pre-diwali bounce was widely expected given the oversold condition of the market. But can it go further or is it just prelude to another leg lower? I think both scenarios may prove to be true as the bounce could well push higher this week although the outlook seems more bearish as we go deeper into November. The catalysts this week may be the US midterm elections on Tuesday and then the FOMC meeting on Thursday. Trump s GOP is widely expected to lose control of the House and therefore we may not see a big market reaction. A surprising outcome could shake things up, especially if the GOP retains control of the House. This would be very bullish for international stocks as it would likely signal further tax cuts. A more bearish result would be the loss of both the House and Senate by the GOP. This would effectively hamstring the Trump presidency for the next two years. The FOMC is arguably more of a wild card, especially after Friday s US jobs report which was stronger than expected. While rates should remain unchanged, a more hawkish tone by the Fed would be bearish. The planetary outlook looks mixed for the month of November. Jupiter is due to form alignments with Rahu and Uranus in the coming days so that could well offer some support to the market. However, I do note several high probability bearish alignments will occur between Nov 12 and Dec 7. While it is unclear if this will translate into lower lows below 10,000, it does argue against any quick and sustainable V-shaped rebound. Even if the Nifty pushes higher this week, the rally is likely to falter in the following week. This will effectively give cautious bulls a second chance to buy at discounted prices, most likely in late November or early December. The planets look more positive in December

6 and January and therefore the odds favour a stronger rebound at that time. Q1 looks choppy but generally bullish and therefore we cannot rule out the possibility of higher highs by April. The technical situation improved considerably after the strong rebound. There is a positive divergence in the RSI and MACD which gives some evidence that the low may be in. The break above the 20 DMA (middle Bollinger band) was also a bullish indication and could act as support in the event of any pullback this week. However, bulls may be thinking that the retest of the falling trend line resistance already took place on Thursday as the low bounced off the 20 DMA/falling trend line almost exactly. Resistance is now the previous high at 10,700 as well as the 200 DMA at 10,761. We could see a quick move up to either of those levels followed by a pullback. A close above the 10,761 would be bullish, however, and would give bulls more conviction to begin the next phase of the bull market and push to a higher high. Conversely, a daily close below the 20 DMA and 10,300 would be bearish and would signal a possible retest of the low. The weekly Sensex chart offers bulls more evidence that a durable rebound may well be underway. After the previous week s tagging of the lower Bollinger band, last week s long white candle suggests a major reversal of the trend. Stochastics is now in a bullish crossover although it is not yet above the 20 line. This could mean that a retest of the low could take place in the coming weeks. While a weekly close above the 50 WMA at 35,146 would add to the bullish case, a rebound could push as high as the 20 WMA/middle Bollinger band and still reverse lower. Bulls have good reason to feel confident here, although they should be aware we could have a more protracted bottoming process as in late Meanwhile, Infosys followed the broader market higher although it slipped towards the end of the week after testing resistance near the 50 DMA. The chart looks bullish for now although a retest of the low would be risky as it could lead to lower lows. ICICI Bank went higher last week and broke above its August highs. It is now testing key resistance at its January high. Higher highs are unlikely to happen quickly with this set up so bulls may have to be patient. This week could be more mixed. For the bulls, Wednesday s New Moon and Moon-Jupiter-Rahu alignment on Thursday should generate some optimism. However, the Diwali closing means that these influences will be absent from the weekly reckoning. Mars enters Aquarius early in the week so we should expect some profit taking at least. Monday is also a good candidate for a pullback as Mercury

7 aligns with Saturn. I would expect support at the 20 DMA at 10,326 to hold in the event of a decline on Monday. Let s see. Tuesday looks more bullish as the Moon aligns with Venus and Uranus. Wednesday s New Moon also leans bullish as does Thursday s Moon- Jupiter conjunction so global markets are likely to rally further. After the FOMC meeting, Friday is less promising as Venus aligns with Mars. Even if Monday does produce some downside, I think the chances are fairly good that the Nifty may recover its current level. If Friday is bearish, however, then there is a risk stocks may finish the week in the red. Monday looks more bearish than Friday, however, so it is possible that Friday could actually turn out positive. Next week (Nov 12-16) looks more bearish, especially later in the week. Mars aligns with Rahu and Uranus from Tuesday to Thursday and therefore increases the risk of declines. As an added negative, Mercury squares Neptune on Friday just ahead of its retrograde period. Some upside is possible on Monday but I suspect rallies will get weaker here. If stocks are near resistance (e.g. 200 DMA), then there is a likelihood of a significant pullback. The following week (Nov 19-23) looks more positive as the Sun approaches its conjunction with Jupiter. Late November and early December look bearish again so it is possible we could see the Nifty struggle to reclaim its 200 DMA. December and January as a whole look more bullish and should bring a more convincing rebound. After a pullback in February, stocks could rise again in March and April and higher highs are not out of the question although I would not say they are probable at this point. Another corrective move lower is likely to begin in April-May. A bear market is likely to begin in 2019 with a significant lower low likely in October A test of 9000 on the Nifty looks likely in Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) 10,400-10,700 (1 week ending 9 Nov) Medium term trend is DOWN bearish (confirming) ,200 (1 month ending 9 Dec)

8 Long term trend is UP bearish (disconfirming) 9,000-10,500 (1 year ending Nov 2019) Currencies The Dollar moved higher last week on safe haven buying and the strong jobs report. After testing 97, the USDX finished the week slightly higher at This bullish outcome was in keeping with expectations as I thought the early week could see some upside. Traders are now awaiting the results of Tuesday s midterms and perhaps more importantly, Thursday s FOMC meeting. The Dollar looks fairly strong here although there is now a double top pattern in place. Thursday s pullback should be seen as a normal retracing from testing resistance. Friday s long lower wick could be seen as a signal that bulls still have life as long as there is some a retest of resistance at 97 this week upcoming. Any move below Friday s low at is bearish and would indicate a return to the previous trading range. It would also open up the possibility of the more bearish double top scenario playing out. However, as long as support at holds, then the inverted head and shoulders pattern is still valid and that would have an upside target of 100 in the event of any breakout above 97. And yet the weekly Euro chart paints a very different picture. While we can see a pattern of lower lows, there is still decent support from the 200 WMA at The chart resembles a falling wedge pattern which is often resolved to the upside. A small gain would not seriously alter the current chart pattern as it may take a move above 1.18 to shake things up. Nonetheless, there is some bullish potential here as long as 1.13 doesn t break as support. This week leans bearish for the Dollar. The early week could see further strength and a possible retest of 97. However, the second half of the week looks more difficult. This could either be the result of the midterm elections on Tuesday night or perhaps the FOMC statement on Thursday. Either way, I would expect a retest of Friday s low and most likely a break below There is further downside risk next week as Mercury squares Neptune later in the week. A large move is possible here. The Dollar could

9 retrace back down to the 200 DMA in November. A rebound should get underway in December and continue into January. A higher high is possible in Q1. Generally, the Dollar looks bullish in the first half of 2019 and push up to 100. I would expect the rally to lose steam by Q3. The Dollar should trend lower heading into Technical Trends (Dollar) Astrological Indicators Target Range Short term trend is UP bearish (disconfirming) (1 week ending Nov 9) Medium term trend is UP bearish (disconfirming) (1 month ending Dec 9) Long term trend is DOWN bullish (disconfirming) (1 year ending Oct 2019) Crude oil Crude oil fell sharply last week as the US granted waivers to eight countries which import Iranian oil. WTI lost more than 6% to just above $63 while Brent finished Friday below $73. This bearish outcome was unexpected as I thought the Jupiter influence would be enough for a bounce. While I was bearish on crude for later in November, this deep retracement so early in the month has been surprising. I still think there is some downside to come in the second half of November although I m not certain if it will create lower lows. The technical outlook looks iffy as last week actually closed below the previous summer lows. There is likely support for WTI at $60 with resistance now at the 200 DMA at $67. A close above this level would likely bring in new buyers in the hope that the rally would be back on. The weekly Brent chart shows support here at the 50

10 WMA which could very well hold going forward. A brief move down to $70 is still very possible although a daily close below $70 would raise further alarm bells. A 50% retracement from the 2017 low would be around $65, however, so buyers may be waiting for these kinds of lower levels before committing to a long trade. This week could be more mixed. The early week may see further selling although I suspect it won t last. Monday is more bearish in this respect given the Mercury-Saturn alignment. A retest of Friday s low is very possible. Tuesday looks more positive on the Moon-Venus conjunction although Wednesday s New Moon is hard to call. Thursday leans bullish while Friday looks fairly bearish. Overall, we could get a bounce this week but it seems unlikely to be very strong. I think choppy trading around current levels is more likely. Next week (Nov 12-16) looks bearish again as Mercury turns retrograde at the end of week and squares Neptune. There is a chance that the early week could see some upside although the indications are not clear. It is possible we could see WTI test resistance at the 200 DMA at $67 at some point. And yet the late week looks sufficiently bearish that I think the chances are good for a sharp rejection of that level by the end of the week. Lower lows are possible. The following week (Nov 19-23) could be bearish to start but looks more bullish by the end of the week. There is the possibility of more weakness in early December, however, as Mars conjoins Neptune. It is possible we could see lower lows at that time. I would expect crude to rebound by mid-december and for the rebound to extend into January. Generally Q1 looks bullish, although the rally may fade in subsequent months. Technical Trends Astrological Indicators Target Range (WTI) Short term trend is DOWN bullish (disconfirming) $63-65 (1 week ending 9 Nov) Medium term trend is UP bearish (disconfirming) $55-65 (1 month ending 9 Dec) Long term trend is UP bullish (confirming) $70-85 (1 year ending Nov 2019)

11 Gold Gold ended the week mostly unchanged as stocks regained their footing thus undermining the safe haven bid. Gold finished the week at 1233 down just $2 from the previous weekly close. This neutral outcome was unexpected as I thought the early week would be more positive. I think there is still a chance for a breakout above 1240 although it is likely to prove temporary. Gold has yet to break out above resistance at 1240 although it did find support at the 50 DMA at Thursday s shake out below 1220 was arguably a perfect long set up for Thursday s gain although we have yet to see a follow through above The chart still offers bulls real hope although failure to move above 1240 this week upcoming would be discouraging. If a breakout occurs, we could see a quick move up to the 200 DMA at A move below the 50 DMA at 1210 would be bearish and would signal an imminent retest of the previous low at Longer term, gold is still not a bullish chart as it is trading well below its 200 DMA. A weekly close above 1300 would likely be the first step in building a longer term bull market for gold, with confirmation from a weekly close above This week looks mixed but could see more upside. Monday leans a bit bullish in this respect as the Sun aligns with Neptune. Tuesday may be less positive as the Moon passes Venus. Wednesday and Thursday are also possible candidates for up days, although I would say the probability is only moderate. Friday looks more bearish. I would still lean towards a breakout over 1240 this week although after last week s misfire, although I m less confident of that now. Next week (Nov 12-16) looks less bullish although the first half of the week could see some further upside. However, some bearish moves become more likely during this week and could arrive as early as Tuesday and the Mars-Lunar node alignment. Bulls should be careful here as whatever rally there may be is vulnerable to reversal. The following week (Nov 19-23) also has downside risk as Mars squares Jupiter and the Sun aligns with the Lunar Nodes. Some sharp gains are possible Nov on the Sun- Mercury-Jupiter conjunction but generally gold will be entering a more bearish period in late November and December. A retest of the low of 1167/1180 is quite likely in December and there is a chance that gold could fall further. Q should see a rebound but I would not expect a major new bullish trend.

12 Gold should begin to decline by Q2 and a correction may take place over the summer. A sustainable rally looks more likely starting in late 2019 and Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) (1 week ending Nov 9) Medium term trend is DOWN bearish (confirming) (1 month ending Dec 9) Long term trend is DOWN bearish (confirming) (1 year ending Nov 2019) Disclaimer: For educational purposes only. The MVA Investor Newsletter does not make recommendations for buying or selling any securities. Any losses that may result from trading are therefore the result of your own decisions. Financial astrology is best used in conjunction with other investment approaches. Before investing, please consult with a professional financial advisor Christopher Kevill