8 December 2018 Volume 11, Issue 50. Summary for week of 10 December 2018

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1 8 December 2018 Volume 11, Issue 50 Summary for week of 10 December 2018 Stocks more mixed this week Dollar may remain under pressure Crude oil may extend bounce this week although late week is uncertain Gold could rise further this week US Stocks Stocks sold off sharply last week on growing skepticism towards any possible US-China trade deal. The Dow lost more than 4% to 24,338 while the S&P 500 finished at This bearish outcome was in line with expectations although the size of the decline was larger than anticipated. Monday was bullish as forecast on the Moon-Venus alignment but then the selling began as the Sun-Mars-Neptune alignment delivered its bearish goods. The market is looking a bit shaky here as there are more signs the global economy is slowing. Friday s jobs report came in weaker than expected and may give the Fed the excuse it needs to produce a more dovish statement when it meets next on Dec 19. While a hike still seems very likely at that meeting, further hikes in 2019 and now far from assured. With China and Europe both likely slowing, it may now require some central bank coordination to keep the liquidity flowing in order to justify current valuations. The Fed put is therefore very much alive here in this very late stage of the bull market. For this reason, we cannot completely rule out a possible higher high (>3000) in early

2 2019 even if the overall economic situation is looking increasingly fragile. I am doubtful we will reach new highs but we will wait and see. The planetary situation looks mixed in the short term. I had expected an interim low in late November or early December. Last week s decline correlated well with the bearish Sun-Mars-Neptune alignment but it is still unclear if the low is in. The planets this week look much less bearish but it is still possible we could see some additional downside. The approach of the Jupiter-Neptune alignment in early January is one good reason to expect a rebound sooner rather than later. That rebound seems most likely to begin this week or next week. The technicals are neither clearly bullish nor bearish and argue for a range bound market between 2600 and In light of the death cross of the 50/200 DMA, however, there is a bearish tinge to the technicals. Support is near 2600 so any breakdown could spark a flush lower, perhaps all the way down towards the February low of This kind of flush lower could well set up an attractive oversold buying opportunity, however. Resistance is near 2800 although Friday s intraday high reversed at 2711 and the 20 DMA so that is the immediate goal for bulls. These three recent lows at have produced positive divergences in MACD and RSI and may entice more bulls to enter long positions in the coming days. While the SPX is looking more neutral perhaps, the NDX and RUT are weaker. The series of lower highs and lower lows makes this chart more bearish. If the NDX can hold above 6500 this week, then there will be a better technical set up for a stronger rebound. Alternatively, if we only see a marginally lower low this week (e.g. to 6450), then a bullish falling wedge pattern could also signal a rebound fairly soon. The weekly Dow chart shows price sitting on the lower Bollinger band and thus offers some prospect for a rebound soon. Stochastics are again close to the oversold 20 line but does not indicate a positive divergence. A quick move down to 23,500 therefore looks a bit more likely here. With signs of a slowing economy, we have seen bond yields fall sharply last week as the 10-year tested horizontal support at 2.8%. This brought the muchfeared inverted yield curve one step closer to reality as the 2-year closed at 2.72 just 13 basis points below the 10-year. Yield inversions are said to foretell recessions and bear markets, of course.

3 This week looks mixed and hard to call. The Sun-Mars square is now separating and therefore sentiment should be less negative. Also Mercury has resumed its normal direct motion and is separating from its negative alignment with the Lunar Nodes. So those two factors ought to translate into some upside throughout the week. And yet we cannot rule out further downside in event of any lingering influence, although I suspect it may be isolated to a day or two. Generally, I think further declines are perhaps a bit more likely to occur in the first half of the week but that is very much a guess. Monday leans a bit bearish on the Moon-Lunar Node conjunction in that respect, and Tuesday s alignment of Mercury with Neptune similarly looks suspect, especially in light of the Brexit vote in the UK that day. Wednesday and Thursday look somewhat more bullish, although I do admit there is a lack of strongly positive short term aspects here. Friday s Moon-Neptune conjunction leans a bit bearish, however. Overall, I would keep an open mind about this week. I would not be surprised if the SPX bounced off of 2600 and put in a positive week. I would also not be surprised if it broke below 2600 for a day or two. A strong move higher above 2711 looks somewhat less likely given the planets here, however. Next week (Dec 17-21) looks more bullish as Mercury conjoins Jupiter. The actual conjunction doesn t occur until Friday but the week as a whole looks more positive. The early week could be a bit bearish, however, as Mars aligns with Pluto. Monday is more suspect in that regard. The FOMC meeting is Wednesday the 19 th and could well serve as the basis for a bounce. The following week (Dec 24-28) looks choppy but some upside is possible late in the week on the Venus-Pluto alignment. Given the mix of influences in the second half of December, it may be difficult for the SPX to push back above Bulls may have to be content with a range-bound market as the best case scenario. Early January looks more bullish as the Jupiter-Neptune alignment will tighten. While the market will likely remain volatile, I would expect January to be more bullish overall ( ?). Some selling is likely in late January and into February which could erase much of January s gain. A rebound is likely into March but I would tend to be skeptical about the possibilities for a higher high above I think stocks will weaken further in April and May as Saturn aligns with Pluto and the Lunar Nodes. This is a very negative combination which is likely to usher in a new bear market in 2019.

4 Technical Trends Astrological Indicators Target Range Short term trend is DOWN neutral (disconfirming) SPX (1 week ending Dec 14) Medium term trend is DOWN bullish (disconfirming) SPX (1 month ending Jan 14) Long term trend is UP bearish (disconfirming) SPX (1 year ending Dec 2019) Indian Stocks Stocks slipped last week on skepticism over the US-China trade truce and domestic political uncertainty as polls showed unusually close races in several state elections. This bearish outcome was in line with expectations as I thought the midweek Sun-Mars-Neptune alignment would take prices lower. Monday was bullish as forecast but sellers moved in after that. Friday also saw the predicted modest recovery with the New Moon. Investors are again on the defensive as global cues look more bearish here. Hopes for a US- China trade deal were undermined by last week s confusion about just what had been agreed to. And now the arrest of the Huawei CFO has further darkened prospects for a quick resolution to trade worries. A weak US jobs report on Friday has also diminished growth expectations so that now the Fed may be forced to hike more slowly in This slower pace may actually end up helping Indian equities as it will keep interest rates lower for longer, although there is still the risk that growth could stall altogether and the world may fall into recession.

5 The astrological outlook looks unclear in the short term. Last week s Sun-Mars square has now passed so there is one less source of caution. And yet the bullish influence of the Jupiter-Neptune alignment may not be fully felt for another two or three more weeks at least. That may translate into a more mixed and choppy month of December. There is still a reasonable chance that the Nifty could rise above 11,000 by the end of the month and into early January but I would keep an open mind about where stocks may trade in the near term. In a word, the planetary indications lack clarity. There are clearer indications for a pullback starting in mid to late-january that will likely continue into February. So even *if* stocks happen to rise into the New Year, the rally is likely to falter soon after. The technical outlook remains more or less bullish. Last week saw a reversal lower at key horizontal resistance at 10,900 a previous support level. The subsequent pullback was not surprising as some kind of profit taking was to be expected. Bulls also managed to put in a higher low on Thursday and thus the bullish trend of higher lows since the October low remains intact. The Nifty has fallen below its 200 DMA once again so that immediate resistance may be closer to 10,800. Any move above 10,800 will likely to see some follow through to the upside and will likely cross above 11,000. Thursday s low of 10,600 is now support so that any break below that level could lead to a move down to 10,200 or even a retest of 10,000. MACD is now on the verge of a bearish crossover which may discourage buyers if it continues. The weekly Sensex chart shows how last week s high reversed exactly on the middle Bollinger band (20 WMA) and thus reflects some hesitation in the rebound. Stochastics is still rising and in a bullish crossover, however, so the medium term technical outlook remains bullish. We can see that the current rebound off the lower Bollinger band is different from the one that took place in April. There is greater choppiness this time around after a deeper pullback. The Sensex chart will become more bearish if there is a weekly close below the November low of 35,000. Meanwhile, Infosys extended its bounce off the 200 DMA and finished the week above its 50 DMA. The rebound is likely to continue if it holds above 660. A move below 660 would suggest a retesting of the penultimate low of 630 and the 200 DMA. This would then set up a bullish inverted head and shoulders pattern. ICICI Bank lost some ground last week but closed at key horizontal support at 350. A move below 340 would be more bearish, however, and could entail another move lower to 300.

6 This week looks mixed. I would also say there is a lack of clear indications here that make predictions more difficult. The early week is perhaps more bearish, however, as the lingering effects of the Sun-Mars square could continue to be felt. Monday s Moon-Ketu conjunction is negative in this respect. Tuesday also leans a bit bearish as it remains under the influence of Ketu. But these are not particularly strong negative influences so I would not count on them too much. The second half of the week looks more positive as Venus aligns with Jupiter on Thursday and Friday. But here again, the alignment is not especially strong and therefore bullish outcomes have only moderate confidence. While I am quite uncertain about the market this week, I would think it means that a large move in either direction is perhaps less likely. I would therefore be surprised if we saw a big move down to 10,200 or similarly if we got a late week close above 11,000. We shall see. Next week (Dec 17-21) looks more bullish, especially in the second half of the week. Monday leans a bit bearish as Venus aligns with Saturn but Tuesday looks more positive as the Moon conjoins Uranus and aligns with the Sun. If there is some early week selling, this suggests the recovery will be quick. The late week Mercury-Jupiter conjunction looks bullish as well so the odds would favour a positive week. The following week (Dec 24-28) looks bearish to start on the Mars-Rahu alignment but after the holiday on Tuesday we could see stocks rebound into the end of the week. It is difficult to say where the week will finish overall, however. The New Year looks could be bearish to start with the Sun-Saturn conjunction on the 1 st and 2 nd but stocks should recover quickly by the end of the first week of I think more upside is likely in January as Jupiter conjoins Venus and aligns with Neptune. At this point, a lower high (11,500?) in January is more likely. The lunar eclipse on 21 January looks more disruptive, however, so some downside is more likely after that date and the pullback should extend into February. Another rally is likely in March and April so that could conceivably retest the all-time high of 11,760. But the planets look much more bearish after April as Saturn conjoins Pluto and Ketu for the next several months. I am expecting a bear market to begin during this alignment and the decline should last through the rest of A retest of long term support at 9000 is a reasonable, if cautious, downside target. Technical Trends Astrological Indicators Target Range

7 Short term trend is DOWN neutral (disconfirming) 10,400-10,800 (1 week ending 14 Dec) Medium term trend is DOWN bullish (disconfirming) 10,600-11,400 (1 month ending 14 Jan) Long term trend is UP bearish (disconfirming) 9,000-10,000 (1 year ending Dec 2019) Currencies The Dollar pulled back last week as weakening economic data reduced the likelihood of further Fed rate hikes in The USDX finished at 96.5, below the important 20 DMA while the Euro finished the week near Is the Dollar in trouble? It could be as the weekly close below the 20 DMA hints at a possible test of the lower Bollinger band in the coming days. A move below the 50 DMA at 96 would also break rising trend line support and could signal a bigger move lower. Fed governors are suddenly starting to sound dovish and one have even questioned the wisdom of a December hike in the next FOMC meeting on Dec 19 th. As the data softens, there is a less compelling case for holding the Dollar, although ongoing uncertainty in Europe is likely helping to keep a bid under the greenback for now. The ECB is due to make its latest statement this week on Thursday the 13 th. Mario Draghi is expected to sound as dovish as ever while continuing to unwind his QE bond buying program. Technically, the Euro is still under falling wedge resistance at 1.15 so unless that breaks out, the Euro is likely to trend lower or sideways.

8 This week looks more mixed for the Dollar. The early week may lean bearish as Mercury remains within range of the Lunar Nodes. This tends to depress confidence in the reserve currency so we could see further downside, perhaps down to the 96 level and the 50 DMA. Some buying could take place midweek, although Friday looks bearish again. I would not rule out further downside here although I think the Dollar is likely to bounce soon. Next week is FOMC and the Venus-Neptune alignment in the late week suggests the Dollar is more likely to bounce. The Dollar should remain bullish into mid-january at least as Jupiter aligns with Neptune and Venus. Higher highs above 97.5 are very possible and even likely. Late January and February should see the Dollar retrace and a test of the 200 DMA at 94 is probable. Q2 and Q3 should see the Dollar rally again, perhaps to a higher high. After that, the Dollar is more likely to weaken in late 2019 and more so into Technical Trends (Dollar) Astrological Indicators Target Range Short term trend is UP bearish (disconfirming) (1 week ending Dec 14) Medium term trend is UP bullish (confirming) (1 month ending Jan 14) Long term trend is UP bearish (disconfirming) (1 year ending Dec 2019)

9 Crude oil Crude finally put in a winning week after OPEC agreed to cut production. WTI rose by 3% to $52.61 while Brent finished the week above $61. This bullish outcome was not unexpected, although I had been uncertain about where crude may finish. Monday was bullish as forecast on the Moon-Venus alignment while the midweek did see some selling around the Sun-Mars-Neptune alignment. Friday was bullish and may have reflected the New Moon in Scorpio. So have we seen the bottom for oil? There are some indications that crude has bottomed although a retest of the recent lows are also very possible in the coming days. Friday s rejection of the 20 DMA at $54 was a clear indication of how weak price action still is, however, so bulls will need to be able to reclaim the 20 DMA before any kind of rebound can get underway. Conversely, a close below $50 for WTI would be bearish and would signal more downside. The weekly Brent chart bounced at horizontal support at $57 right at its previous highs of from early With the long term 200 WMA sitting at $56, there is good reason for patient bulls to buy this level, even if a sharp rebound may take some time yet. If we do see a bounce soon, then the most obvious resistance level would be $70-73 near the convergence of the 20 and 50 DMA. This week leans bullish again. Monday could go either way although I might retain a bullish bias. Tuesday and Wednesday look more bullish as the Moon aligns with Jupiter and then the Sun. The late week is more of a question mark, however, as Friday s Moon- Neptune conjunction looks a bit bearish. Overall, the chances are fairly good for another positive week, although the late week is a source of some concern. Next week (Dec 17-21) looks mixed with a bearish bias. The early week looks a bit negative as Mars aligns with Pluto on Monday and Wednesday s Sun-Uranus alignment on FOMC day also could produce some weakness. The late week Mercury-Jupiter conjunction looks more bullish, however, so we may not see a lower low but rather a retest of the low. The following week (Dec 24-28) leans bullish as Venus aligns with Mercury and Pluto in the late week. Early January looks choppy with significant moves in both directions in the first week although I would retain a bullish bias for much of January. After a pullback in February, we could see crude oil rally modestly into March and

10 April. New highs are unlikely although I would not rule out a retest of the previous high. A bigger move down is likely starting in May or June and continuing through the summer of Technical Trends Astrological Indicators Target Range (WTI) Short term trend is DOWN bullish (disconfirming) $52-57 (1 week ending 14 Dec) Medium term trend is DOWN bullish (disconfirming) $60-65 (1 month ending 14 Jan) Long term trend is UP bullish (confirming) $60-75 (1 year ending Dec 2019)

11 Gold Gold rallied last week on weakening economic data and Dollar softness. Gold gained more than 2% on the week to This bullish outcome was unexpected as I thought the midweek Sun-Mars alignment might have produced more downside. Gold has taken a major step forward here after moving above Thursday s retest of 1240 as support was also important as it allowed Friday s gain to take place. Gold is now on the verge of a retest of the 200 DMA at This is significant although it is well within the confines of bear market behaviour. One thing that may give bulls extra hope in this case is that the test of the 200 DMA follows a longer basing pattern which could well serve as a tradeable bottom. Gold is forming a rising channel with resistance near 1270 and support near In addition, we should note that there is horizontal resistance at 1260, 1280 and Bulls will therefore have their work cut out for them if this rebound continues. This week looks mixed. Monday s Moon- Lunar Node conjunction leans a bit bearish perhaps although not strongly so. A pullback to 1240 is more likely on this pattern. Tuesday s Moon- Venus alignment is somewhat more positive so we could see some improving sentiment going into midweek. The late week seems less bullish, however, as Friday s Moon-Neptune could coincide with weakness. Overall, I am reluctant to forecast a bearish or bullish weekly outcome although there may be enough upside momentum to post another positive week. Next week (Dec 17-21) could be bullish to start as Venus aligns with Neptune. But the late week looks more difficult as the Sun aligns with the Lunar Nodes. Friday s Mercury-Jupiter conjunction is bullish for gold but I wonder if the positive effect will be negated by the weak Sun placement. With the FOMC meeting due on the 19 th, there is some reason to think gold could pullback in the aftermath of the Fed statement. Gold looks vulnerable to pullbacks into the end of December as Mars aligns with the Lunar Nodes right after Christmas. The first half of January also looks somewhat bearish and may see gold retest support (1200? 1180?). Gold could be in a better position to move higher in late January and February with a rally lasting into March or even April. I would not expect significant new highs, however. A larger correction is likely to accompany the mid-year alignment of Saturn, Pluto and the

12 Lunar Node. Gold may be in a better position to undertake a more sustainable rally late in 2019 and in Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) (1 week ending Dec 14) Medium term trend is UP bearish (disconfirming) (1 month ending Jan 14) Long term trend is DOWN bearish (confirming) (1 year ending Dec 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