22 December 2018 Volume 11, Issue 52. Summary for week of 24 December 2018

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1 22 December 2018 Volume 11, Issue 52 Summary for week of 24 December 2018 Stocks mixed with some upside likely Dollar likely to push higher, especially in second half Crude oil choppy with lower lows likely early in the week Gold mixed with likely test of resistance US Stocks When it rains, it pours. Stocks extended their December plunge as the Fed offered little in the way of relief for beleaguered investors. The Dow lost almost 7% on the week to 22,445 while the S&P finished at This bearish outcome was unexpected as I thought some kind of bounce was possible after Wednesday s FOMC meeting. The break below support at 2600 came early in the week and was less surprising given the more tense alignments at that time. I had retained a certain measure of caution about last week as a whole, however, as Saturday s Full Moon looked generally destabilizing. But I had no expectation that we could see this kind of relentless selling pressure. The major indexes are getting very close to that 20% bear market threshold, although the NASDAQ and Russell 2000 are already in bear market territory. By itself, that term is meaningless since it does not predict any particular outcome going forward. For example, the decline in 2011 was 21% but it did not mark the beginning of any longer bearish period. Higher highs are therefore not of the question here either as long as investors eventually find some positives: a resolution to the

2 government shutdown drama in Washington, a China-US trade deal and more dovish signals out of the Fed. That said, I am more skeptical than ever of the SPX reaching 3000 in 2019, and it seems that this upcoming bear market will be a protracted and nasty one. But in the near term, I still think we will see the beginning of a bounce before the end of December, although one that begins at a much lower level than I had anticipated. The planetary influences still look more promising for January. A possible improvement in sentiment could happen this week in the aftermath of the Full Moon. The Jupiter-Neptune alignment in early January is a fairly reliable bullish factor which argues for a fairly good bounce at least. But with late January and early February looking bearish (the next Full Moon is on January 21), it will be very important how high this will bounce into January. If it is strong and climbs back above 2700, then any subsequent decline into February is less likely to put in a lower low. But if the January bounce is weaker and only tests resistance at 2532 or 2600, for example, then a subsequent pullback could risk a lower low. This would be a formidable bear market set up for the rest of The technicals are as bearish as one can imagine and yet stocks are so oversold that a bounce is inevitable. But when? Friday s sell-off came on a near record high Put-Call ratio which often occurs just before a reversal higher as the bearish trade becomes too crowded. Also, we got a volume spike which is necessary for a tradeable bottom. Volume could increase further, but I would say that condition has been satisfied already. Friday s close was near the low of the day so it is more likely that we will get at least an intraday lower low, perhaps on Monday s short trading day before Christmas. Therefore, a move under 2400 seems likely sometime this week, possibly on Monday. But 2400 is a logical price target based on the previous 200-point trading range of Once support at 2600 was broken, a 200-point move lower became more plausible. A brief move below 2400 will provide a hard test of December channel support. Resistance from this falling channel is now 2532 the same level as the February low. Any bounce that we see initially will have some traders looking to bail out as it approaches Therefore, a rally above 2532 will likely reach 2600 at least, and probably the 20 DMA at Conversely, if 2400 is broken sharply, such as down to 2350, it may open up the possibility of another whole leg lower, such as to the longer term support levels of The NDX is in a similar situation having fulfilled the measured move target of its previous range at The Russell 2000 is in worse shape but ironically it has a more compelling reason to buy it since

3 last week saw a tagging of its long term 200 WMA at This previously occurred in early in 2016 and in Marginally lower lows are possible in the near term, but that line approximates a long term support level. If 1350 doesn t hold as support, then the next support level for the Russell may be closer to 900 which was the 2007 and 2011 top. The weekly Dow chart looks quite bearish and a test of its long term 200 WMA at 20,668 no longer seems impossible, even in the short term. A rebound could happen at any time, however, but resistance at 23,500-24,000 could prove difficult to surmount. This week looks choppy and less bearish. And yet there is still the very real possibility of lower lows here given the Mars-Lunar Node alignment early in the week. Monday s Moon-Lunar Node conjunction looks unstable in itself and when it is combined with the Mercury-Neptune square, I would lean bearish again for Monday. A bounce is certainly overdue but bulls should remain patient in the event that Monday sees more selling. After Tuesday s closing, Wednesday will feature the Mars-Node alignment. This is also not very positive although there could be some relief from the Moon-Sun alignment. Perhaps we will finally see an intraday reversal on Wednesday. Thursday looks more bullish on the Mercury-Venus alignment and should deliver a positive day. But Friday looks bearish again, especially in the morning on the Moon-Mars opposition. There is a mixture of influences here that make it difficult to call a weekly outcome with confidence. We could easily finish red again although I do think one or perhaps even two positive daily closes are likely. Whether that is enough to produce a weekly gain remains to be seen. Next week (Dec 31-Jan 4) looks more bullish. If the preceding week has been bearish, then this is a better bet for some real upside. Monday is the last trading day of the year and looks mixed. The Sun-Saturn conjunction is not generally helpful for sentiment although the Moon looks fairly positive. I would therefore keep an open mind about the 31 st. Markets close Tuesday but Wednesday looks more bullish as Mercury aligns with Venus and the Lunar Node. This has some significant bullish potential. Thursday also looks bullish as the Moon conjoins Jupiter. Friday may bring further gains as the Moon conjoins Mercury. A strong bounce is possible here, although if Monday or Wednesday end up bearish, there could be a slow start to the bounce. The following week (Jan 7-11) looks more bullish again as Uranus stations direct and aligns with Jupiter on Monday. Although the midweek Mercury-Mars alignment could produce a down day or two, the week as a whole looks bullish. There is a decent chance that January will be bullish, at least until the lunar eclipse of the 21 st. I would expect a pullback to begin after that date and last for at least two weeks,

4 probably into early February. My working hypothesis is that it will produce a higher low in February which will then be bought. Here I m assuming that the January rebound will be sufficiently strong to offset any subsequent profit taking. We shall see. There is a decent chance that the market will rally again in March and April. I m not sure how strong it will be, however. May and June look bearish as Saturn aligns with Pluto and the Lunar Nodes and that could begin the next leg lower in the bear market. Assuming we bounce from around 2400 in December, then that long term target of is more likely to be reached in the summer. Technical Trends Astrological Indicators Target Range Short term trend is DOWN bullish (disconfirming) SPX (1 week ending Dec 28) Medium term trend is DOWN bullish (disconfirming) SPX (1 month ending Jan 28) Long term trend is UP bearish (disconfirming) SPX (1 year ending Dec 2019)

5 Indian Stocks Stocks slipped last week as negative global cues dragged down sentiment. The Sensex fell less than 1% to 35,742 while the Nifty finished the week at 10,754. This bearish outcome was somewhat unexpected, especially since Friday s sell-off occurred on a day with a more positive planetary alignment. I had been fairly cautious about the rest of December, however, but wasn t sure if we would get the pullback this soon. While India Inc is still in good shape, last week s Fed decision may have complicated the otherwise bullish outlook. Fed Chair Powell was distinctly hawkish in his comments and offered little to liquidityaddicted investors in his press conference. Markets in developed economies tanked on the news and now even Trump is tweeting about Powell s possible removal as Fed Chair. It s unclear if his removal would even be bullish, although last week s reaction shows just how fragile stock markets have become in this low-interest rate environment. Higher US rates are still bad news for emerging markets, even if the sell-off in equities may temporarily depress bond yields as investors seek safety. While domestic circumstances remain broadly favourable, the global situation remains challenging and threatens the bull market. The planetary outlook looks mixed in the short term. Next week could see some further downside, but early January looks significantly more bullish as Jupiter aligns with Neptune. However, the lunar eclipse of 21 January may change the trend again and could usher in another corrective move lower. Overall, I would retain a modest bullish bias into mid-january or so but bulls should be cautious after that. This makes higher highs quite unlikely in the short term and a retest of 10,000 on the Nifty is not out of the question by February. But another leg higher is likely in March and April which may even retest the all-time high of 11,760. The technical outlook remains bullish with some caveats. Last week managed a marginally higher high of 10,985 before retreating towards support at the 200 DMA. While the momentum is positive, the slightly higher highs are concerning for bulls, especially at that key resistance level of 11,000. Is this normal consolidation under resistance or will buyers take over and push the Nifty lower? I would think

6 the current situation is still bullish consolidation to the 20 DMA here. A pullback to the 50 DMA at 10,574 is still possible without damaging the overall bullish picture. If the 50 DMA can hold as support, then bulls may be able to take another run at resistance at 11,000. The weekly BSE chart still looks generally bullish for the medium term after last week s test of the middle Bollinger band (20 WMA). Only a weekly close below 35,000 would be cause for concern in this respect as bulls will try to marshal their forces for a push higher. If the Sensex closed below 35,000, then it could lead to a retesting of the lower Bollinger band at 33,000 and eventually a tagging of the long term 200 WMA at 30,000. Conversely, a weekly close above 36,500 would be bullish and could open the door to a retest of the high of 39,000. Meanwhile, Infosys had a terrible week falling 8%. Lower lows are likely this week although it remains to be seen if the 20 DMA will hold as support. If it does hold, then we could see more upside and an eventual retesting of the high at 750. HDFC Bank went sideways last week and remains in a bullish situation above the convergence of the 50 and 200 DMA. The most likely scenario is a retesting of the July high and ultimately higher highs in the coming weeks. The chart only becomes bearish if there is a close below the December low and the 200 DMA. This holiday-shortened week looks mixed and could see further downside, especially early in the week. The problem is that Mars aligns with Rahu so that could translate into lower prices on Monday and Wednesday (Tuesday is closed for trading). Monday may be more bearish than Wednesday in this respect given the difficult Moon-Rahu conjunction. Thursday s Sun-Moon alignment looks more bullish and could well see stocks recover. Friday also could be bullish as Mercury aligns with Venus and Pluto. The afternoon is perhaps less positive than the morning, however. Overall, bulls should be careful this week as the Mars influence here looks unhelpful. The downward momentum from Friday s session could easily carry into the early part of the week at least

7 and may make it difficult for any late week recovery. While the early week leans bearish, I am uncertain if there is enough downward energy to break support from the 50 DMA at 10,574. With January looking more positive, perhaps the technicals can provide a clue about how this week will go. A higher low would be a better technical set up for a more bullish January so that is more likely to take place. Next week (Dec 31-Jan 4) looks more bullish as Venus joins Jupiter in the sign of Scorpio. The early week is perhaps less strongly bullish but I would not say it is bearish either. Bulls should have the wind at their backs here even if there are some bumps along the way. The following week (Jan 7-11) also leans bullish as Uranus stations direct and aligns with Jupiter and Neptune. While we are likely to see some choppiness here, I would stay bullish. A move above 11,000 is definitely possible by mid-january. But by the time of the lunar eclipse on Jan 21, we could see stocks weaken. I am expecting a pullback at least in late January as Mars aligns with Saturn. The negative trend should end by mid-february and stocks will be in a better position to rally in March and April. Higher highs are possible in April a lot depends on how deep the preceding pullback in February may be. Nonetheless, a major corrective move is likely to begin May and continue into June and July. A test of long term support at 9000 on the Nifty is quite possible and the bull market may be placed in jeopardy. Stocks may begin recover in late 2019 or early Technical Trends Astrological Indicators Target Range Short term trend is UP bearish (disconfirming) 10,500-10,800 (1 week ending 21 Dec) Medium term trend is DOWN bullish (disconfirming) 10,500-11,000 (1 month ending 28 Jan) Long term trend is UP bearish (disconfirming) 9,000-10,000 (1 year ending Dec 2019)

8 Currencies The Dollar fell last week despite the FOMC statement which reiterated its commitment to raising rates through The USDX lost half a cent to while the Euro gained almost a full cent to just above The market seems to be calling Jay Powell s bluff here as currency markets are anticipating more weakness in US data next year. The Dollar chart looks more toppy and bearish following its inability to push above its resistance at Friday s recovery was impressive after Thursday s sell-off but bulls need a daily close above the 20 DMA at 96.8 in order to create a new opportunity for higher highs. Support is at so any move below that level would likely lead to lower prices and a possible test of the 200 DMA at 94. The Dollar is still bullish given the rising moving averages here so a retest of the 200 DMA may be the necessary shake-out before it can rise to higher highs. For its part, the Euro is looking more like it wants to break out of its falling wedge and move above the 20 WMA. This would signal a possible quick move to horizontal resistance at 1.18 and the 50 WMA. This week looks mixed again for the Dollar. Monday leans bearish as Mercury squares Neptune. A retest of Thursday s low of is quite possible. Wednesday and Thursday are less negative although I m uncertain if it can finish higher. I think that the Dollar has a good chance to retest resistance in January and indeed a breakout is still more likely than not. But this week doesn t look like a prime candidate for that upward move. Next week (Dec 31-Jan 4) looks more bullish than bearish and could see a retest of resistance at The Dollar may well rally throughout most of January, although I suspect its path higher may not follow a straight line. A retracement lower is likely to begin by late January or early February and the down trend could continue through March and April. The pullback looks substantial and is likely to move well below the 200 DMA at 94. A move down to looks quite possible. Another rally is likely to begin by May and extend through June and July. Higher highs are very possible by the summer. Looking further ahead, I think the Dollar is likely to trend much lower starting in late 2019 and through 2020.

9 Technical Trends (Dollar) Astrological Indicators Target Range Short term trend is DOWN bearish (confirming) (1 week ending Dec 28) Medium term trend is UP bullish (confirming) (1 month ending Jan 28) Long term trend is UP bearish (disconfirming) (1 year ending Dec 2019) Crude oil The carnage in crude oil continued for yet another week on growth and oversupply worries following a hawkish Fed statement on Wednesday. WTI fell by more than 10% to $45.59 while Brent finished the week at $ This outcome was surprising as I did not see any clear planetary indications for such a large move. I still think crude is likely to enjoy a strong bounce in January although I am puzzled why it has continued to decline here into the holiday season. The technical chart is as bearish as it can be after the breakdown of the latest support level of $50 for WTI. However, bulls may gain some peace of mind knowing that $45 is a plausible measured move target following the previous trading range of $ If we do see a rally attempt this week -- and I think we will key resistance will be $50 for WTI, and $58 for Brent. This also matches the key 20 DMA which has previously acted as resistance during this huge decline. It seems unlikely that bulls will choose to hang onto to long positions at this level so we could see a quick bounce and then a retracement. The weekly Brent chart shows how far oil has fallen: below its long term 200 WMA and now below the 50% retracement level as measured from the 2016 low. It is also trading below the key horizontal support level of $57 which was previously resistance in early Could it fall further? Of course, it could always fall back to its previous support level of $ But a bounce is still possible here as the $50-60 support level may be better thought of as a zone rather than any specific price.

10 This week looks choppy. I think lower lows are quite likely in Monday s shortened session given the Mercury-Neptune square aspect. After Tuesday s closing, Wednesday seems less clear. I would say that it could offer a better chance for gains than Monday, although I would not be strongly bullish. Thursday could see moves in both directions as the Moon-Neptune opposition looks bearish while the Mercury-Venus alignment is bullish. Friday s Moon-Mars opposition looks more bearish, however. Overall, this week could see a bounce, but I would not count on it. I think the Jupiter-Neptune alignment needs to be tighter before we get any significant bounce so that may only occur in January. Next week (Dec 31-Jan 4) leans a bit bearish to start but the bullish potential will rise after New Year s. The transit of the Moon into Scorpio with Venus and Jupiter on Wednesday the 2 nd looks quite bullish in this respect. Thursday also could see some upside but Friday looks quite bearish as the Moon squares Mars. The following week (Jan 7-11) looks more bullish as Jupiter aligns more closely with Neptune. I would expect crude to move higher until the Venus-Jupiter conjunction on Jan 21. Some retracement is likely in late January but another push higher is likely in the first half of February. We could see crude trade in a higher range during Q2 although a return to its previous highs looks unlikely. A major correction is still likely during the summer as Saturn conjoins Pluto and the Lunar Nodes. Q4 looks more bullish with further upside likely in Technical Trends Astrological Indicators Target Range (WTI) Short term trend is DOWN bullish (disconfirming) $44-50 (1 week ending 28 Dec) Medium term trend is DOWN bullish (disconfirming) $50-60 (1 month ending 28 Jan) Long term trend is UP bullish (confirming) $60-75 (1 year ending Dec 2019)

11 Gold Gold pushed higher last week as the sell-off in equities pushed investors towards safe havens. Gold gained more than 1% to I had been undecided about where gold might finish given the mix of influences in play. The Fed statement coincided with more upside, although it was likely less related to the rate hike and the hawkish language than the selloff. The rebound off the August low still looks quite bullish for now, although last week s tagging of the 200 DMA removed one possible impetus for further upside in the short term. There is horizontal resistance at 1280 with support now at A move below 1258 would likely bring a retest of the 20 DMA at That would still maintain the bullish pattern of higher lows, however. The chart would only become more bearish on a close below A close above 1280 would be quite bullish, however, as it could signal that gold may be prepared to reclaim its previous trading range above This is more likely given the substantial basing pattern that began in August. This formed a higher low compared with If gold continues to move higher here, then a golden cross of the 50 and 200 DMA is likely. This week looks mixed. Monday s Moon-Mars alignment could be bearish but the midweek Sun-Moon alignment seems more positive. Friday could be a bit negative on the Moon-Mars opposition, however. I am generally bearish for January, especially after this run-up in December. But I am uncertain if the pullback can begin this week. It s certainly possible, although the indications are less clear. Next week (Dec 31- Jan 4) looks more bearish as the Sun conjoins Saturn on Wednesday the 2 nd. I would not say this is a high probability bearish influence, however, since there is some offsetting positive energy likely from Venus. The following week (Jan 7-11) also leans bearish with more downside possible heading into the lunar eclipse on Jan 21 st. It is quite possible we will see 1200 tested in January although calling levels is more speculative. Late January should be more positive with further upside likely in February. Could gold continue to post higher highs in Q1? This is hard to say although it is very possible. Gold is likely to reverse lower in April and May as Saturn turns retrograde. This is likely to produce a major correction which is likely to undermine any fledgling bullish technical

12 set up at that time. Gold could bottom in the summer and then begin to rally into Q4 and extend its upward move through much of Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) (1 week ending Dec 28) Medium term trend is UP bearish (disconfirming) (1 month ending Jan 28) 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