1 April 2017 Volume 10, Issue 14

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1 1 April 2017 Volume 10, Issue 14 Summary for week of 3 April 2017 Stocks may rise early but more bearish in second half Dollar likely stronger this week Crude oil could push higher early but prone to declines later Gold choppy but more vulnerable to declines this week US Stocks Stocks rebounded last week as the first quarter of 2017 ended on a high note. The Dow rose fractionally on the week to 20,663 while the S&P 500 finished at This bullish outcome was unexpected as I thought we would see some midweek selling on the Mercury-Saturn alignment. This didn t happen although the early week was bullish as expected. Nothing much has changed in terms of fundamentals as US economic prospects remain good despite whatever political uncertainty can be attributed to the growing pains of the Trump administration. But the rosy outlook requires that there is real progress on tax reform and that any changes made on the trade front are seen as sensible and benign. Obviously, there are dangers that either area may bring unwelcome developments as the White House still seems to be on the defensive from the Russia investigation. The first phase of the French election takes place on April 23 rd although markets will be watching polls leading up to the vote in case anti-eu candidate Marine Le Pen takes a clear lead. Currently, she is polling about even with the leading pro-eu candidate Emmanuel Macron so if that pattern holds then the market will stay at or near current levels. A Le Pen win would be quite negative, however. While the fundamentals are looking up, the planets are not confirming a bullish outlook. As expected, March was net negative overall, but only barely so. I thought we would have seen more downside by now. But the planets

2 appear to be on the side of the bears. Venus is still in the midst of its retrograde cycle and thus there is an increased risk of a pullback by its completion on April 15 th. The added problem for sentiment is that Saturn turns retrograde this week on Thursday the 6 th and this could mark a reversal. I had thought we might have seen more preliminary downside ahead of this Saturn retrograde station but it s possible the market could keep rising into that date. As a wild card, Uranus re-enters sidereal Aries the day before on Wednesday the 5 th. Uranus first entered Aries in this ingress cycle on June 23 rd, just one day before the surprising Brexit vote. Uranus can bring shocks and surprises when it enters new signs so we should be on guard for that elevated possibility. I m not at all certain that we will see something that sudden that place again this week but it is worthy of mention nonetheless. Although we saw a winning week, bears can still take solace that the SPX put in a lower high. Not only was Thursday a lower high, but there is a declining channel pattern through the month of March. Channel support may be close to 2300 in the event we get any pullback in the coming days. But channel resistance is 2370 which is very near the 20 DMA. A close above that level would be more bullish as it could indicate that this period of bull market consolidation is over and that the bulls were intent on pushing to a higher high above The 50 DMA may be providing support for the moment as Monday s low tagged that line It had been the first test of the 50 DMA since November. One would think that any break below 2330 or even channel support at 2300 would signal a more fundamental medium term shift in sentiment and could open the door to a retest of the 200 DMA at While the rising 200 DMA is a very bullish indication for the market, the last test of this line was back in November so eventually it has to be retested. The possibility of more downside is also seen in the Bullish Percent Index which still shows the bearish crossover of the 5/10 EMA. So while the long term technicals support the bullish fundamentals, the shorter term technical outlook is more uncertain. The weekly Dow chart still favors the bears in the short term as stochastics has fallen below the 80 line and is still in a bearish crossover. MACD is on the verge of a bearish crossover. Further upside is possible in the coming days, but these two indicators suggest that some kind of correction is coming through the next few weeks. There is considerable horizontal support at 20,000 so buyers would likely enter the market in force in the event of further downside. Meanwhile, the bond market is still looking skeptically at the Trump inflation trade as yields on the 10-year remained close to technical support at 2.3%. A move below that level would likely coincide with some further declines in stocks possibly due to cuts in earnings estimates. This week could be pivotal for markets. The entry of Uranus into Aries and the Saturn retrograde station have the potential of changing things up significantly. Both are bearish in their influence although the fallout could take a couple of days to manifest. The early week actually features some short term bullish aspects so it is quite possible

3 we could get some upside on Monday or Tuesday. Tuesday s Moon-Venus alignment actually it makes it more bullish than Monday. Wednesday sees Uranus changing signs after the close of trading so it is possible the trading day may be unremarkable. But the downside risk should increase as the week progresses with Thursday and Friday looking more bearish. As I noted above, I would not rule out some upside leading into Thursday s Saturn station. This could therefore be an appropriate turning point for stocks. Friday s Sun-Jupiter opposition is another factor that hints at a possible end to the bullishness we have been seeing. While the alignments here look important, I would not rule out a brief push higher above channel resistance at Even 2400 is not out of the question at some point. But I think it is prudent to have a bearish bias here in any event just in case there are some sudden developments later in the week. Next week (Apr 10-14) looks more bearish as Venus forms a slow-moving square aspect with Saturn for most of the week. Mars enters Taurus on Wednesday the 12 th so that another source of possible negative sentiment. I m reluctant to forecast the magnitude of any declines here as they could be big or small. I do think there a reasonable chance that the SPX will break below the 50 DMA and the 2300 level, however. So we will see just how much damage this Saturn retrograde can do. The following week (Apr 17-21) looks bearish to start on the Mars-Venus- Saturn alignment. Venus returns to direct motion here so the downside may be limited. Nonetheless, I would lean bearish overall. Bulls may regain control in the last week of April and into early May. While the upward momentum of the market suggests any pullback will be bought, this rally looks weak. I would be skeptical about the chances for a higher high in May. We shall see. The second half of May should be more negative and lower lows are even possible by early June. Another rally attempt in July could interrupt the bearish mood for a while but the August-September-October period seems quite bearish on the Saturn-Lunar Node alignment. This is likely to produce the biggest percentage pullback/correction of Lower lows are quite likely and therefore we should see the 200 DMA broken to the downside and perhaps even SPX Technical Trends Astrological Indicators Target Range Short term trend is DOWN bearish (confirming) SPX (1 week ending April 7) Medium term trend is UP bearish (disconfirming) SPX (1 month ending May 7) Long term trend is UP bearish (disconfirming) SPX (1 year ending April 2018)

4 Indian Stocks Stocks pushed higher last week as the GST bills passed the Lok Sabha and global cues remained mostly positive. The Sensex rose less than 1% on the week to 29,620 while the Nifty finished the week at This bullish outcome was somewhat unexpected as I thought we might have seen more downside in the second half of the week. We did see some gains in the first half which coincided with the Moon-Venus alignment. However, the gains continued through the week after Monday s sell-off with Friday s high retesting the previous March high. Sentiment remains very positive here as the government s reform agenda is an attractive selling point for FIIs. And with annual growth projections exceeding 7% for the foreseeable future, the bullish case for buying Indian stocks is still compelling. Global trade is sufficiently strong to justify current valuations although further protectionist measures from the US may present a risk down the road. It remains to be seen if the Trump administration will enact any new border taxes which could discourage trade. The interest rate story is also broadly positive as investors have accepted two more rate hikes this year from the Fed. Janet Yellen s dovish comments suggest the Fed is unlikely to raise rates too fast. This is all good news for equity investors who will benefit from a continued low rate environment. The bottom line is the fundamentals continue to look good. Astrologically, there is more reason for caution. In the near term, the ongoing Venus retrograde cycle is likely to produce some selling before its conclusion on 15 th April. Moreover, the Saturn retrograde cycle begins this Thursday 6 th April. When Saturn changes its direction from forward to backward in the sky, the market is more vulnerable to reversing its price trend. Since stocks have generally been moving higher recently, the Saturn station increases the likelihood of a reversal to the downside. In addition, Uranus re-enters the sign of Aries on Wednesday the 5 th. This is also an event with some attendant risk. We saw how the first entry of Uranus into Aries on 23rd June coincided with Brexit which briefly roiled global markets. This is not to say that we will get a similarly surprising or shocking development this week. But the chances of such a black swan type event are elevated as a result of Uranus. Despite the current risk, the main vulnerable time period for equities this year is still between July and October when Saturn has an extended alignment with Rahu. Bulls should therefore be careful about piling into any positions for the long term.

5 The technical picture is still bullish on all time frames. Last week s push towards the previous high was not unexpected perhaps although task now for the bulls is to make a higher high above While there remains considerable resistance at 9200 (and more importantly 30,000 on the Sensex), support is given by the 20 DMA. So far, this 2017 rally has not yet traded below the 20 DMA and it remains a strong indicator of the bullishness of the market. If we get a close above 9200, then the measured move upside target would be If the bulls fail to push above 9200, however, then further consolidation could risk a deeper pullback. In the short term, buyers will likely enter near the 20 DMA at However, any close below 9000 would therefore have a measured move downside target of A rejection of 9200 would create a bearish double top pattern. In terms of worst-case scenarios for the bulls, a 50% retracement would take the Nifty down to Interestingly, this is near the 200 DMA at Any sharp pullback to that level would be an obvious buying opportunity in the eyes of most bullish investors. The weekly BSE chart is close to overbought according to the RSI at 68. Further gains are quite possible but they are likely to be incremental. Perhaps the most bullish target is 32,000-32,500 which is the measured move upside target from the December low. There is fairly good support at 29,000 so any move below that level would cause some anxiety for bulls as it could open the door to a deeper pullback. Meanwhile, Tata Motors (TTM) went sideways last week after appearing to reject resistance at the 200 DMA. The double bottom chart is still bullish but it is important for the bulls to remain above the March low going forward. Bulls can still point to the series of higher lows here to affirm their faith. Infosys (INFY) followed the broader markets higher although it is still pushing against resistance of the 50 WMA and previous horizontal support. Further gains may be harder to come by above these levels. This week could see some significant developments. The late week in particular may be more prone to unexpected declines on the Uranus ingress and the Saturn retrograde station. With Tuesday closed for a holiday, gains are somewhat more likely on Monday and Wednesday. The Mars-Jupiter alignment on Wednesday is not a high probability bullish pattern but it nonetheless looks less negative than would otherwise by the case. Thursday and Friday are therefore the riskier days. Thursday s Moon-Mars square looks fairly bearish and so does Friday s Moon-Rahu conjunction. Overall, I think the chances are good for a down week overall. That said, if we get

6 some upside early on, then the late week declines may only negate the preceding gains. Nonetheless, the importance of Uranus and Saturn here means that markets may be more volatile than normal. Next week (Apr 10-14) also leans bearish as the Venus-Saturn square becomes exact. In addition, Mars changes signs as it enters Taurus on Thursday the 13 th. We could see 9000 tested and perhaps broken at this time assuming the previous week is flat or negative. The following week (Apr 17-21) may bring more downside early in the week on the Mars-Saturn alignment. The late week may be more bullish, however, so the week overall is harder to call. Late April looks more bullish although I would not expect a strong rebound. The month of April as a whole should be somewhat negative. Early May could see some upside but perhaps not enough to form higher highs. Late May and early June looks more bearish so much of any preceding rally in May could be negated. We could see the indices range bound below key resistance (9200/30,000) from late April to well into June. Some upside is likely in late June and July but eventually that rally should fail. I would not rule out higher highs by July but the August to October period looks more bearish on the Saturn-Rahu alignment. This is the kind of alignment that should coincide with a correction that retests the 200 DMA (8544) at least. And I would expect that line to be broken at some point. The low of the year could well occur in September or October. Q4 looks somewhat more positive. Technical Trends Astrological Indicators Target Range Short term trend is UP bearish (disconfirming) (1 week ending 7 April) Medium term trend is UP bearish (disconfirming) (1 month ending 7 May) Long term trend is UP bearish (disconfirming) (1 year ending April 2018)

7 Currencies The US Dollar bounced off support last week on hopes that growth would continue despite ongoing political uncertainty. The USDX gained almost a cent to close above 100. The Euro retreated below 107 while the Yen went sideways to 111 and the Rupee extended its rally to close below 65. This bullish outcome was in keeping with expectations as I thought the early week gains would be sufficient to produce a positive week. The Dollar tested its 200 DMA on Monday but then rebounded fairly strongly afterwards. While the move back above the 200 DMA was bullish, it may be carving out a declining channel now with resistance at The 20 and 50 DMA may be acting as short term resistance at So while the short term may be somewhat bullish, the medium term outlook looks less positive. The weekly Euro chart suggested a possible significant reversal lower had taken place last week after touching 109 but then reversing sharply lower back into its previous range. This was a possible failed breakout. Euro bulls will try to maintain the pattern of higher lows above 105 in order to keep the rebound going. However, the outlook is mixed at best. This week looks bullish for the Dollar on the Venus-Saturn square. Some retracement is possible early in the week but the second half of the week should be positive. I would think the chances are good for at least a test of at some point. Next week also has a bullish bias so it is possible the Dollar could break above channel resistance. Some downside could take place in the second half of April but generally I think most dips will be bought fairly quickly. We could see further retracements to the 200 DMA but I think a break below that line is fairly unlikely. While early May looks bearish, late May and June should be bullish. It is possible we could see the Dollar trade between 99 and 102 from April to June. Surprises on the upside seem more likely than those on the downside. July should be bearish but August through to October should bring another rally. Higher highs are possible during this period. The Dollar looks mixed in Q4 with some significant weakness in the first half of Technical Trends (Dollar) Astrological Indicators Target Range Short term trend is DOWN bullish (disconfirming) (1 week ending April 7)

8 Medium term trend is UP bullish (confirming) (1 month ending May 7) Long term trend is UP bearish (disconfirming) (1 year ending Apr 2018) Crude oil Crude oil rose last week on hopes of an OPEC production deal. WTI jumped 5% above $50 while Brent moved above $53. This bullish outcome was somewhat unexpected as I thought the late week would see more weakness. While the early week was higher as forecast, prices continued to rise into Friday. The move above resistance at $50 was bullish for crude and hinted at higher prices going forward. There remains a lot of overhead resistance, however, so it is unclear if crude can easily revisit its highs at $54. The next resistance level is likely near the 50 DMA at $52 which was the previous support level. Another layer of horizontal resistance lies between $ It would seem likely that if crude will return to previous levels it will require more than one rally. Support is now at $50 or slightly below. Bulls will want to keep prices from slipping below the convergence of the 20 and 200 DMA near $49. Otherwise a retest of the previous low of $47 could hasten a breakdown to lower lows. The Brent weekly chart shows how crude has once again bounced neatly off the 50 WMA. Previous tests of this line have seen a strong rebound within 2-3 weeks back over the 20 WMA. Failure to get a weekly close above $54 would suggest this bounce is weaker and therefore may reduce the likelihood of higher highs. If bulls are successful, then channel resistance is close to $62 for Brent. While I think crude will remain under pressure for much of April, we could see some upside this week. The early week is hard to call as there is a mix of influences. Gains are perhaps more likely on Tuesday and especially Wednesday after the Moon enters the sign of Cancer. But we should also expect some downside early on, perhaps on Monday. Thursday and Friday lean somewhat bearish although Friday could go either way. Next week (Apr 10-14) looks more bearish as Venus squares Saturn and Mercury turns retrograde. I think there is a good chance that we will revisit the March lows of $47 and lower lows are very possible. Crude could bottom out and then reverse higher in the following week. I would not expect a

9 strong rally initially as it is possible we could see choppy trading through to the end of April. Early May should be bullish, however, and a move toward resistance ($50? $54) is possible. The rally may run out of steam by the end of May so some kind of pullback is likely. This should last into early June although I would not expect a major retracement. More upside is indicated by the Jupiter direct station in June and the rebound should last into mid-july. It is possible this could produce highs above the March high. Another major correction is likely to begin in late July and continue through August and perhaps last into September. A test of $40 is possible and lower lows cannot be ruled out. Q4 looks mixed. Technical Trends Astrological Indicators Target Range (WTI) Short term trend is UP bearish (disconfirming) $48-50 (1 week ending Apr 7) Medium term trend is DOWN bearish (confirming) $40-48 (1 month ending May 7) Long term trend is DOWN bullish (disconfirming) $45-60 (1 year ending Apr 2018) Gold Gold pushed a bit higher on the week as traders expanded their inflation expectations. Gold rose $3 to finish at This bullish outcome was not unexpected as I thought the early week could be strong enough to produce lasting gains. As expected, we saw some midweek retracement on the Mercury-Saturn aspect. Tuesday s retest of resistance at the 200 DMA at 1262 showed that bulls are very much in the driver s seat for now. As long as a higher low is formed in any subsequent pullback, then there is a possibility of a breakout higher. The technical outlook favours the bulls here as the series of higher lows suggests more upside, perhaps to the measured move upside target of Interestingly, falling channel resistance dating back to 2016 is now around Another key resistance zone is likely near which is previous support. Currently, 1240 is short term support so that any close below that level could signal more downside, perhaps to the 50 DMA at Gold bulls would still see that as a buying opportunity as it would be a higher low and thus keep the 2017 bullish pattern of higher lows intact. As before, 1200 may be the most important support level.

10 This week could see some significant moves. Thursday s Saturn retrograde station is bearish, especially since it will be square with Venus. Typically, these kinds of Venus afflictions produce declines. However, Friday s Sun-Jupiter aspect looks bullish. While I am generally bearish for the month of April, I would not rule out some upside this week. Given the mix of aspects in play, it is hard to say with confidence where gold will finish this week. I would retain a bearish bias in any event but I also would not be shocked if it somehow managed to produce a winning week either. Next week (Apr 10-14) also leans bearish as Mercury turns retrograde. The first half of the week looks more negative as gains are more likely on the late week Sun-Uranus conjunction. More downside is also possible early the following week (Apr 17-21) although I wonder if this will involve a retest of the previous week s low. Gold should eventually rally in late April and the first half of May. After a pullback in late May and early June, more upside is likely in June on the Jupiter direct station. I would expect higher highs in June and July relative to May or April. The gold rally is likely to fade starting in July or possibly August. A correction is likely to take place through August and September on the Saturn-Lunar Node alignment. This could well retest previous lows such as 1125 or perhaps even Q4 looks mixed but 2018 may see gold rebound more strongly. Technical Trends Astrological Indicators Target Range Short term trend is UP bearish (disconfirming) (1 week ending Apr 7) Medium term trend is DOWN bearish (confirming) (1 month ending May 7) Long term trend is DOWN bearish (confirming) (1 year ending Apr 2018)

11 Disclaimer: For educational and entertainment 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