15 December 2018 Volume 11, Issue 51. Summary for week of 17 December 2018

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1 15 December 2018 Volume 11, Issue 51 Summary for week of 17 December 2018 Stocks could be bearish early but may turn bullish later Dollar could test resistance this week, especially after FOMC Crude oil mixed with possible bearish bias after Wednesday Gold mixed with rising downside risk US Stocks Stocks fell further last week as weakening data from China and Europe overshadowed hopeful signs on the trade front. The Dow lost more than 1% on the week to 24,100 while the S&P 500 finished at This bearish outcome was more or less in keeping with expectations, although the market was a bit more negative than I thought it would be. The early week was bearish as forecast given Monday s intraday move below The midweek recovery also seemed to fit well with the improving planetary alignments and Friday s decline also aptly reflected the bearish Moon-Neptune conjunction. But while stocks are still clinging onto support at the lower end of its recent trading range, sentiment has clearly worsened in recent days. There is now more talk about a bear market in 2019 as deepening concerns about growth are forcing more investors to reevaluate. Europe is slowing but the ECB has no room to ease further since the it failed to hike rates even once during Mario Draghi s tenure. If a recession hits, one assumes the ECB will be forced to move deeply into a negative interest rate regime. And there is similar dovish talk around the Fed and the upcoming FOMC

2 meeting this Wednesday. A hike is still widely expected, but the outlook for next year is for maybe just one or two more hikes. If the Fed gives the market a reassuringly dovish statement on Wednesday, then it could provide the necessary boost for the market. If not, then stocks could break down significantly. So is this the bottom? The planetary outlook offers some decent evidence for a rebound soon. I think we are likely to see a reversal higher in December and this week s FOMC meeting increases the likelihood that the reversal may start this week. This week s Mercury-Jupiter conjunction is just one bullish influence but it may be enough for a winning week at least. But it does not preclude further downside early in the week so that could complicate the overall technical picture, since a move below 2600 could spark a quick flush and would likely make the medium term outlook more bearish. While the upcoming Jupiter-Neptune alignment in January argues for more upside, the longer term outlook is uncertain. Late January and February still look bearish, but if the preceding rebound is weak (<2750), then it is possible we could see lower lows in February. While another up trend is likely in March, I am still generally bearish about the spring and summer as the Saturn-Lunar Node-Pluto conjunction is very likely to take stocks significantly lower, at least towards a test of pre-trump rally low of The technical picture is looking more bearish. Stocks are on key support here, both in terms of 2018 horizontal support and long term trend line support. Friday s session did not offer much indication of a tradeable low as volume stayed close to normal. A significant low may require a volume spike indicating capitulation before a rebound can begin. Planets aside, we may well see at least an intraday move below 2600 on Monday or Tuesday, so 2583, 2553 or even 2532 may be possible as retail investors decide to cash out over the weekend. If that quick flush takes place, then resistance would be Above that, the 20 DMA at 2683 would likely be a level at which cautious bulls choose to get out. The current bearish technical outlook would take a big step forward with a close above (50 DMA). This would still be below the 200 DMA but it could at least begin a bottoming process. The NDX chart is also vulnerable although a retest of its late November low of 6442 could provide the impetus for some buyers to re-enter long positions. But the small cap Russell 2000 is looking more bearish as it fell to a lower low again last week. This is not a healthy development for the broader market. The weekly Dow chart is testing support at 23,500. Lower lows are still possible, of course, but a reversal higher could happen at any time. Stochastics are close to oversold at 22 and therefore offer bulls some solace that a bottom may be near. But if and when there is

3 a breakdown of 23,500, the measured move target based on this double top range (27,000-23,500) would be close to 20,000 and the 200 WMA. I think the chances are good that the Dow will hit that level sometime in 2019, possibly as early as February but more conservatively in the summer. This is a little above the pre-trump rally low of 18,000. Meanwhile, bond yields stabilized last week as the 10-year bounced at horizontal support at 2.8%. This slowed the 2-10 yield curve inversion process as the spread widened to 26 basis points. This was a small piece of bullish news for stocks. This week could see a bounce. The planetary influences seem more positive this week than last week and indeed they offer the prospect of a significant bounce, especially after Wednesday s FOMC meeting. And yet I have only moderate confidence in this bullish call due to some bearish influences that are also in play. We are approaching a Full Moon on Saturday the 22 nd which tends to be a bearish influence. I would not say it is strong enough to negate other positive influences but it nonetheless undermines them somewhat. Also, I note that the otherwise bullish Mercury-Jupiter conjunction on Friday also aligns with bearish Saturn. This reduces its bullish potential somewhat. The early week is more bearish in any event as the Moon, Mars and Pluto align on Monday. This pattern could well signal that quick sell-off that seems more likely by the ugly Friday technical finish. Tuesday looks more bullish as the Moon aligns with Uranus and Venus. If Monday is red, then that should set up an oversold bounce for Tuesday. Wednesday is FOMC day and the planets look bullish as Venus aligns with Neptune and the Sun aligns with the Lunar Node and Uranus. Thursday lacks clarity. I would not be surprised by any outcome. Friday leans bullish on the Mercury-Jupiter- Saturn alignment. I am reluctant to forecast any levels here since a quick and severe flush on Monday could make it more difficult for bulls to recover 2600 by Friday. But my general view is that stocks have a good chance to finish higher this week although it is hard to say by how much. Next week (Dec 24-28) is shortened for the Christmas holiday. Seasonality is bullish but the planets look choppy here with both bullish and bearish alignments in play. Monday is a half-day but the Mercury-Neptune square leans bearish. Wednesday the 26 th is hard to call although I may lean bearish here also as Mars aligns with the Lunar Nodes. Thursday offers the bulls a better chance as Mercury aligns with Venus but Friday the 28 th is suspect as the Moon opposes Mars. I would keep an open mind about what happens during this week. The following week (Dec 31-Jan 4) looks more bullish as Jupiter tightens its alignment with Neptune. Early January therefore may well bring more upside although it may not be large enough to substantially improve the technical outlook. It

4 other words, I have no clear idea if the SPX will be above or below its 200 DMA at 2750 by January. Regardless of where stocks may top out, I think another pullback is likely in the second half of January and into February. This pullback may be more than just profit-taking so we could retest any December lows in February. That is definitely something to watch out for. Another up trend looks likely in March and April so we cannot rule out a second leg higher off the Dec-Jan bottom. Sometime in May or June, any ongoing rally is likely to run of out steam and reverse lower as the Saturn-Lunar Node-Pluto conjunction takes hold. I would think the lows of the year will therefore take place sometime in the summer of 2019, with a possible target of on the SPX. Technical Trends Astrological Indicators Target Range Short term trend is DOWN bullish (disconfirming) SPX (1 week ending Dec 21) Medium term trend is DOWN bullish (disconfirming) SPX (1 month ending Jan 21) Long term trend is UP bearish (disconfirming) SPX (1 year ending Dec 2019)

5 Indian Stocks Stocks moved higher last week as easing inflation data and stronger industrial production offset any disappointment from the state election results. The Sensex gained less than 1% on the week to 35,962 while the Nifty finished at 10,805. This bullish outcome was broadly in line with expectations as I had been fairly neutral about possible outcomes. As expected, the early week was bearish with Monday closing red and more intraday downside on Tuesday. As forecast, the rest of the week was more positive although gains were more modest. Indian equities are proving resilient in the face of uncertain economic data as China and Europe came in below expectations. The ECB s Mario Draghi delivered a dovish statement despite the end to its QE asset purchases so this may have bolstered emerging markets sentiment as markets prepare for the latest Fed meeting on Wednesday. Fed Chair Jerome Powell may well similarly reassure financial markets as he attempts to thread the needle between rate normalization and maintaining an accommodative stance in the face of weakening data both home and abroad. While another Fed hike seems likely on Wednesday, a more gradual path to rate normalization would likely be welcomed by equity markets as a way to maintain liquidity in the face of rising interest rates. The planetary outlook is mixed for the rest of December. The bullish Jupiter-Neptune alignment could bring some buyers into the market but its influence may not occur until January. In the short term, there is a real mix of patterns that do not exhibit any clear direction. For this reason, I am less inclined to think that bulls will dominate trading over the next two weeks. Indeed, bears have a chance to take stocks lower although I suspect any possible downside may be incremental. And with some kind of pullback likely around the lunar eclipse on 21 January, a very choppy, range-bound market is the most likely outcome in the coming weeks. The technical outlook is uncertain. Last week saw the printing of an interim lower low and lower high. This was a bearish development which undermined the post-october rebound. And yet, from a very short term perspective, the late week support from the 200 DMA at 10,749 was quite bullish, even if

6 buyers did not take it to a new high. Resistance is the upper Bollinger band at 10,944. If bulls cannot break above this line, then there is a risk of a retest of support at 10,749 and the 200 DMA. A move below this level without any preceding gain would be bearish and could signal a retest of last week s low near 10,300. The weekly Sensex chart looks more bullish perhaps for the medium term. Last week s candle has a long lower wick and thus reflects a situation where buyers are in control. Stochastics are still in a bullish crossover and rising while MACD seems poised for a bullish crossover. At the same time, the rejection of the 20 WMA (middle Bollinger band) is not bullish although it may simply reflect a pause in the rally. Any move above 36,500 would be bullish and a weekly close above that level would be very bullish and would signal a probable retest of the high at 39,000. However, a retest of the October low at 33,000 could signal the formation of a possible head and shoulders top. A break below that 33K neckline may lead to move down to 27,000. Meanwhile, Infosys extended its rebound off support last week so now resistance is the early October high of 740. Support is likely near the 50 DMA. While a pause at 740 is likely in the near term, the chart looks bullish and should push to new highs eventually. HDFC Bank moved sideways following its bounce off support from the 50 and 200 DMA. The relative weakness of the chart suggests it may have to retest support at 2000 again before challenging its July high. This week looks mixed. The early week leans bearish, however, as Monday s Mars-Pluto alignment and Tuesday s Moon-Uranus conjunction could prove unsettling. Wednesday looks more bullish as the Moon aligns with Venus. Despite the probability of some midweek gains, I would still think it will be unlikely if the Nifty trades above 11,000 by Wednesday. If the early week is bearish as expected, then a break of support at 10,750 is likely. After the FOMC meeting, Thursday and Friday could be more bullish as Mercury aligns with Jupiter and Venus aligns with Neptune. Friday may be the more bullish day of the two as the Moon aligns with Jupiter. Given the

7 range of influences in play this week, I would not rule out a bullish or bearish outcome overall. I am leaning a bit bearish for the rest of December although this week may be somewhat more positive than next week. I would think that if the Nifty is still trading close to 10,800 by Wednesday, then there is a reasonable chance it could test 11,000 by Friday. But that is a big if. Next week (Dec 24-31) looks more volatile as the early week features a Mars-Rahu alignment. Monday the 24 th looks especially vulnerable given the Moon-Mars-Rahu alignment. After Tuesday s holiday, we could see a gradual improvement as Venus aligns with Mercury on Thursday and Friday. But here again, the mix of influences makes it difficult to forecast a particular outcome. I would say there is not strong evidence for either a bullish or bearish week. The following week (Dec 31-Jan 4) may be more bullish as Venus joins Jupiter in the sign of Scorpio. January as a whole looks mixed with some upside more likely in the first half of the month. However, there is increasingly downside risk from mid and late January as Mercury conjoins Saturn. This is likely to be a drag on sentiment which could limit any rally in the New Year. Higher highs therefore look less likely. After the lunar eclipse on 21 January, a pullback is likely which may linger into February. Another push higher is likely in March and April but I would skeptical about the prospects for a higher high above 11,752. A deeper correction looks likely in Q2 and Q3 as Saturn conjoins Ketu and Pluto. The bull market may well be in jeopardy by that time as long term support at 30,000/9000 may well be tested. Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) 10,600-10,900 (1 week ending 21 Dec) Medium term trend is DOWN bullish (disconfirming) 10,300-11,300 (1 month ending 21 Jan) Long term trend is UP bearish (disconfirming) 9,000-10,000 (1 year ending Dec 2019)

8 Currencies The Dollar moved higher last week as investors bought treasuries amid strong US economic data and ongoing weakness elsewhere. The USDX finished just under 97 while the Euro settled at This bullish outcome was somewhat unexpected as I thought the early week might have brought more selling. The technical chart looks fairly bullish here as the ascending triangle of higher lows and equal highs is more likely to break out above resistance. A close above 97.5 would be bullish and would likely indicate a move towards 100. With the FOMC meeting this week, it seems likely the Dollar could make a big move. A hike is already priced in so the market is awaiting forward guidance on possible hikes for A dovish statement would likely end this up move although the greenback remains the best of a bad lot as far as currencies are concerned. The ECB is in no hurry to tighten and the PBOC is likely planning to let the yuan fall further in an attempt to kick start its flagging economy. The Dollar rally could reverse lower on a close below 96 and the 50 DMA. The weekly Euro chart continues to drift lower albeit in an approximate falling wedge pattern. This could still resolve to the upside in the event of a close above This week leans bullish, especially in the second half after the FOMC meeting. The Venus-Neptune alignment on Thursday and Friday looks more positive so this would appear to suggest a possible breakout above We shall see. Next week we could see some profit taking and a pullback as Mars aligns with the Lunar Nodes. This may retest support or perhaps the previous breakout level (97.5) if we indeed have seen the Dollar rally further. Regardless of how December finishes, I think the chances are good for more upside to the Dollar, at least until the Venus- Jupiter conjunction on January 22. The Dollar will be more prone to pullbacks after that date with a test of the 200 DMA at 94 quite likely. This pullback will likely set the stage for the next big move higher which is likely to occur in Q2 and Q3. I would expect highs for the year to take place in the summer perhaps with a reversal lower beginning in Q looks more bearish generally.

9 Technical Trends (Dollar) Astrological Indicators Target Range Short term trend is UP bullish (confirming) (1 week ending Dec 21) Medium term trend is UP bullish (confirming) (1 month ending Jan 21) Long term trend is UP bearish (disconfirming) (1 year ending Dec 2019) Crude oil Crude slipped again last week as the strong Dollar and worries over slackening demand stopped the rebound in its tracks. WTI lost about 2% on the week to $51.20 while Brent finished Friday just above $60. This bearish outcome was unexpected as I thought the early week might have seen more upside. Crude is trading in a narrow range here as bulls are not yet confident enough to force a breakout above the 20 DMA. With slightly higher lows, we have a neutral pennant pattern. This is often considered a continuation pattern so it is somewhat more likely to resolve to the downside. However, this is barely above a outcome so we should keep an open mind about the technical chart. Key support is $50 for WTI so any close below that level could trigger some stops and produce a sharper decline. Bulls need a close above $54 in order to break out of this sideways trade. The 50 DMA at $61 is likely a more important level of resistance as bulls may be quick to take profits below that line. The weekly Brent chart shows support is holding at the old resistance level of $57 and the 200 WMA. But so far the bounce has been weak so we could see further

10 testing of this key technical level. If we do see a bigger bounce, $70-72 near the convergence of the 20 and 50 WMA will act as resistance. This would approximate a 50% retracement of the decline. This week looks mixed. Friday s Mercury- Jupiter conjunction may be bullish but the early and mid week look less positive. To be honest, the indications are not at all clear this week so I would keep an open mind about where crude prices could go. The FOMC leans bearish on Wednesday and Thursday but again the aspects lack clarity. The planets themselves do not strongly favour either a breakdown below $50, nor a breakout above $54. Next week (Dec 24-28) looks choppy with a greater downside bias. Monday s Moon-Lunar Node conjunction leans bearish while a bounce is more likely on Wednesday. There seems to be elevated downside risk towards the end of the week. The following week (Dec 31-Jan 4) leans bearish as the Sun conjoins Saturn. But there is a good chance for some upside in the second and third weeks of January as Venus conjoins Jupiter. It is possible we could see Brent rally to resistance at $70 in January, although I would not say that is a high confidence prediction. We shall see. February could bring further upside, although a pullback is likely by the second half of the month with further downside likely into March. Another leg higher is likely in Q2 and this may form a higher high by June. A significant correction is likely during the summer, however. At this point, I am agnostic on when the low of 2019 may occur. It could be early January, or it may be sometime in late summer if the preceding rally has been more modest. Technical Trends Astrological Indicators Target Range (WTI) Short term trend is DOWN neutral (confirming) $48-54 (1 week ending 21 Dec) Medium term trend is DOWN bullish (disconfirming) $58-65 (1 month ending 21 Jan) Long term trend is UP bullish (confirming) $60-75 (1 year ending Dec 2019)

11 Gold Gold pulled back last week on Dollar strength and weak data that hinted at declining economic growth. Gold traded as high as 1256 before losing about 1% to This modestly bearish outcome was not unexpected as I had been fairly neutral about last week. We did get some selling early in the week with a tiny midweek gain followed by more downside late in the week on the Moon- Neptune conjunction. The pullback was a normal pullback following a bear market rally to test resistance at the 200 DMA at But while the test was typical bear market behaviour, the rebound is still looking bullish for now after a series of higher highs and higher lows. Friday s candle has a long lower wick thus buyers were waiting at support at As long as 1240 holds in the coming days, we could well see it move higher. A move back below 1240 would suggest a trading range between 1200 and A move below 1200 would be bad news as it could indicate a retesting of the lows at It is unclear if 1180 would hold as support given the bearishness of the chart. The 200 DMA is still sloping downwards and therefore buyers may be more likely to exit their positions than to hang on in the face of any pullbacks. This week is hard to call. My general outlook is bearish for the next 4-6 weeks but I m unsure what will transpire this week. Wednesday s FOMC meeting could well move gold one way or the other. However, the planetary alignments lack clarity on that score. The midweek Sun-Lunar Node alignment looks more bearish than bullish, although the simultaneous Venus-Neptune alignment looks more positive. It s very much a mixed bag here, although I would lean slightly bearish on Wednesday and Thursday. This reflects my uncertainty about the alignments in play. The early week is also mixed although Tuesday s Moon-Uranus conjunction could be somewhat bullish. Next week (Dec 24-28) also looks mixed. Monday looks bearish on the Moon-Lunar Node conjunction but we should see some upside on Wednesday or Thursday on the Mercury-Venus alignment. Friday looks more bearish, however. The following week (Dec 31-Jan 4) looks more bearish as the Sun

12 conjoins Saturn. This could begin the pullback in earnest if it has not already begun. January leans bearish at least up until the lunar eclipse of Jan I think gold may be in a better position to rebound after that date with the rally likely to continue into February. This up trend will likely last into March although it may not be as strong as some bulls would like. By April, gold is likely to reverse lower and a significant correction is likely going into Q2 as Saturn conjoins Pluto. Gold will likely strengthen by August and therefore we may see gold begin a more sustainable rally for the rest of 2019 and into Technical Trends Astrological Indicators Target Range Short term trend is UP bearish (disconfirming) (1 week ending Dec 21) Medium term trend is UP bearish (disconfirming) (1 month ending Jan 21) 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