6 February 2016 Volume 9, Issue 6

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1 6 February 2016 Volume 9, Issue 6 Summary for week of 8 February 2016 Stocks should move higher this week, especially after Monday Dollar likely extending its retracement lower this week Crude oil likely bullish and should test resistance again this week Gold should see more upside focused in first half of week US Stocks Stocks slumped last week on Friday s disappointing jobs report and a renewed weakness in the oil market. This bearish outcome was broadly in keeping with expectations of the Mars- Sun aspect although I underestimated the extent of the selling. As expected, the first half of the week was fairly bearish with the intraweek low occurring on Wednesday. Stocks then rose when bullish Venus was approaching its conjunction with Pluto. Friday s decline was anomalous, however, as I thought stocks would continue to rebound. This rebound is looking a bit shaky. The reaction to the jobs report suggests that there is rising concern that the global slowdown will hit the US and could affect corporate earnings more directly. The sudden plunge in the US Dollar also reflects the market s expectation that the Fed will be very hard pressed to continue with its plan to normalize interest rates in Perhaps more worrying is the fact that Japanese stocks quickly reversed course and fell last week despite the radical BOJ move to negative interest rates the week before. If the rate cut could only boost stocks for one week then that would call into question the ability of central banks to pump markets going forward. The ECB is widely expected to cut its already negative rates at its next meeting in March. That will be another data point for gauging market reaction to these latest stimulus attempts. And with Janet Yellen scheduled to testify in front of Congress this week, the market will be looking for more hints of future Fed direction.

2 From an astrological perspective, we are still very much in a medium term bearish phase. Jupiter s conjunction with Rahu will continue into March and has an overall negative effect. That said, its negativity may well have already manifested given that the December and January declines also coincided with this unusually lengthy fourmonth conjunction. Saturn s square aspect to Jupiter is exact in March and early April and should be seen as another potentially bearish influence. In other words, there are good reasons to expect more downside over the next two months or so. A lower low below SPX 1812 is therefore very possible. Given the weakness of this rebound, I would say that a lower low is now more likely than not. But that still leaves February as more of a mixed bag. I think there is more downside to come in February although I tend to think it won t happen this week but rather in the last two weeks of the month. The technicals appeared to weaken last week as Wednesday s intraday high failed match the previous week s high. While this was an equal high on the Dow, Wednesday s high was lower on the SPX, Nasdaq and the Russell The lower high puts pressure on the bulls to prove their conviction or else. The other problem with last week was that we saw two tests of support at SPX This makes four tests at that level and one has to think that the repeated tests of support bode poorly in the near term without any offsetting tests of resistance. If 1872 is broken, then we would likely get a retest of 1812 and raise the possibility of lower lows also. There is longer term support at 1760ish from the rising 2009 trend line in the event there is a sudden sell-off. But if 1872 holds here this week, then we could see stocks test resistance again near A move above 1920 would invite a run up to 1950 which is arguably more important technically. Obviously, any trades above 1950 would be bullish and could extend the rebound to 2000 and beyond. But other indications suggest the bearish scenario of a breakdown of support is more likely. Treasury yields are falling to new lows and signaling slowing economic activity which is bearish for stocks. The German DAX chart looks very bearish and is again testing August 2015 and January lows. The Russell 2000 is less than 2% away from retesting its piercing January 20 th low and Friday s close was its lowest close since The Nasdaq fell more than 3% on Friday as even the FANG stocks sold off hard. Up until recently, Facebook, Apple, Netflix and Google had been keeping the tech sector and the broader market afloat. That may now be changing. The weekly Dow chart suggests the long term trend is down as the bearish crossover of the 20 and 50 WMA is not abating. There is a bullish crossover in stochastics as it remains above the 20 line, however, so bulls can still believe in the notion that the market is oversold and deserves a bounce. 16,000 is still important support on a weekly basis so any weekly close below that level could open up more downside risk. The key low in that respect is the Jan 15 th weekly close at 15,988. The planets this week lean bullish and offer some evidence that stocks could rebound a bit. The Mars-Sun square is now separating so that suggests we could get more upside. Also Mercury and Venus align with bullish Jupiter for much of the week. So at least those are prima facie arguments for a bounce here. However, as I mentioned

3 above, I think it is likely that there is more downside coming in February. Therefore it would not shock me if it actually showed up this week. However, that is not my preferred scenario. Monday s New Moon aligns with bearish Mars so that may add to downside risk that day, at least in the morning. Venus joins this four planet alignment so it is possible we could see some big moves early in the week in either direction. Even if it is lower, I suspect it will reverse higher by Tuesday at the latest. The problem now is that any early week move lower would likely break support at 1872 and thus create an even more bearish technical set up. I am not sure how to square that circle with the possibility of a breakdown on Monday and the subsequent gains I am expecting later in the week. Tuesday and Wednesday feature a nice alignment with Venus, Sun and Jupiter so I would be surprised if stocks fell across both of those days. Thursday and Friday look more neutral and are harder to call. Venus enters Capricorn on Friday so that could generate some buying but it does not look strong. I would lean bullish on the week but I would be very cautious about the long side, especially in the event of a sharp decline on Monday. Next week (Feb 15-19) leans bearish as Mars aligns with the Lunar Nodes for much of the week. It is possible we could see a positive day Monday globally as the Moon aligns with Venus and Mercury but this does not look particularly reliable. US markets are closed for Washington s Birthday. Tuesday and Wednesday may have a higher downside risk. The late week offers some upside potential although Friday looks problematic as the Moon aligns with Mars. If the preceding week is bullish then this week could see the SPX test 1872 once again and possibly break below it. Late February also leans bearish as Mars enters Scorpio where it joins fellow malefic Saturn. We could see an interim bottom in the last week of February or first two weeks of March. March 4 th and March 14 th are both possible dates of significant downside which could correlate with interim lows. Perhaps this will be the time frame where the retest of 1812 (or 1760?) will occur. The second half of March could see a rebound. April looks mixed despite the nasty Mars retrograde station on the 17 th. My guess is the March low will hold throughout April and into May. Therefore we could see a significant rebound into mid-may, although it is unlikely to push to a higher high. However, the alignments appear to worsen in May and June so I would think a new correction lower is very likely for the summer. The bulk of the decline may be focused in the June 15th to July 15 th time frame. I would expect lower lows at that time, perhaps even in the range. The down trend will likely continue in Q with lower lows very possible by December. Technical Trends Astrological Indicators Target Range Short term trend is DOWN bullish (disconfirming) SPX

4 (1 week ending Feb 12) Medium term trend is DOWN bearish (confirming) SPX (1 month ending March 12) Long term trend is UP bearish (disconfirming) SPX (1 year ending Feb 2017) Indian Stocks Stocks lost ground last week on skepticism about the new GDP calculation and weaker macro data as oil prices slipped once again The Sensex fell about 1% to 24,616 while the Nifty finished at This bearish outcome was in keeping with expectations as I thought the Mars-Sun square aspect would likely coincide with some selling, especially in the first half. The intraweek low occurred on Wednesday although it was somewhat lower than expected below Nonetheless, we did see buyers move in on Thursday and Friday which coincided closely with the bullish Venus alignment with Pluto. The outlook remains bearish for stocks as global cues suggest further weakening ahead. After the Bank of Japan s surprise rate hike last week, Japanese stocks actually fell last week suggesting the market is skeptical of such central bank attempts to prop up sentiment. The ECB is also widely expected to cut rates further into negative territory in March so we will have to gauge how markets react. A weak rally would be a worrisome sign that the world s central banks are increasingly impotent. On the plus side, China s markets are closed this week for the Lunar New Year holiday so that will at least stem the flow of potentially negative news. Indian markets will be focused on important GDP and CPI data to be released on Monday. The astrological picture offers some hope for gains in February, perhaps as early as this week, the Jupiter influence is likely to be enhanced through its short term alignments with Mercury and Venus. But there does not seem to be enough bullish influence here to fundamentally change the down trend in Indian stocks. The larger problem is that Saturn is still exercising a strong bearish influence in the coming months. First, it squares Jupiter in March and April at the same time it turns retrograde on 25 th March. Second, Saturn is scheduled to square Rahu (North Lunar Node)and Neptune for a very long four months from June to October. This Saturn-Rahu aspect tends to be bearish in any event, but this year it will last more than twice as long as usual due to the aspect

5 occurring during Saturn s retrograde cycle. The year as whole is shaping up as one of considerable blood-letting in the markets. The technical picture remains fragile here. Last week saw resistance at 7600 tested on Monday and it was predictably rejected as bulls quickly raised the white flag. However, the higher low on Wednesday did offer some prospects for further upside in the short term. If we see more upside here then the measured move target from the previous low/high would be This would be a bit above the 50 DMA and well within the boundaries of the falling channel. In other words, this would be very much in keeping with the current down trend. Only a move above 7709 would be indicative of a stronger rally, although we should note that falling channel resistance is near Only a move above 8000 would complicate this generally bearish technical picture. MACD is still in a bullish crossover although stochastics has switched over to a mid-level bearish crossover. Support is likely near 7350 so any violation of that level would involve a retest of the low at 7241 and a possible lower low. However, if 7241 does hold, then it could suggest the formation of a bullish falling wedge in the coming weeks. That will be something to watch out for. Current falling channel support is somewhat lower than 7241, however, and is now near The weekly BSE chart shows stochastics still in a bullish crossover above the 20 line thus indicating some possibility of near term upside. MACD remains locked in a perilous bearish crossover, however, with lower lows that validate the lower lows in the price chart. The bearish crossover of the 20 and 50 WMA is perhaps the best indication of the weakness of the market and the medium term bear trend. Meanwhile, Infosys (INFY) had a down week but remained within its recent trading range. The chart is still bullish in the medium and long term as long as it remains above its January low. Bulls need to put in higher lows here in order to make higher high more plausible down the road. However, the January highs ($18) are offering formidable resistance. ICICI Bank (IBN) fell to new lows last week as the outlook for this stock is as bleak as ever. It looks quite oversold here as it is well below its 20 DMA so a bounce is likely soon. This week offers the bulls some decent chances as Venus aligns with Jupiter and Rahu midweek. The bigger question is what happens on Monday when the New Moon (i.e. Sun conjunct Moon) aligns with the square aspect from Mars. This looks bearish although I wonder if some of the negativity of this combination could be offset by the presence of Venus in the alignment. A big move is possible in either direction, although I would lean towards a bearish outcome just in case.

6 Tuesday and Wednesday look more positive in any event, as Venus aligns with Jupiter. Wednesday is the more bullish looking of the two days. If Monday is negative, then that would enhance the likelihood of a rebound on Tuesday and Wednesday even more. If Monday is positive, I would still lean bullish into Wednesday although the gains may be more evenly spread out. Thursday looks less bullish although I would retain a slight bullish bias nonetheless. Friday is mixed but I would lean bearish there as the Moon aligns with Saturn and Uranus. Even if Monday is negative, I think the Nifty should finish above current levels, and could quite possibly finish above Next week (Feb 15-19) looks mixed with a bearish bias. Mars aligns with Ketu for the first half of the week so we should expect some declines. Even if we get some gains on Wednesday or Thursday, Friday looks bearish again. The declines may be large enough to offset any gains we see in the preceding week. The following week (Feb 22-26) also leans bearish although it lacks any strongly negative short term aspects. The second half of the week looks a bit more negative given the Mercury-Saturn aspect. Budget Day is the 29 th this year and the planets seem somewhat bearish given the Venus-Saturn aspect that day. The first half of March looks bearish as both Mercury and Venus are squared by Mars. We could therefore see a retesting of 7241 in March, and perhaps even the falling channel support at But the second half of March may bring some improvement which extends into April. Another test of channel resistance at is possible in April and May. Stocks are likely to trend higher into about mid-may but I would think the rally will falter soon after. June and July look quite bearish as Saturn aligns with Rahu and Neptune. In addition, Uranus changes signs on 24 th June and could generate a spike in volatility. Uranus only changes signs once every 7 years so there could be some turbulence around this date. As it happens the late June period may be particularly bearish given that Mars stations direct on 30 th June. There is a good chance the Nifty will fall below support at 7000 by July and I would think the old high of 6350 could be within reach. Even after the requisite oversold bounce in August and September, Q4 looks bearish again. We could get a significant long term low in stocks in Q Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) (1 week ending 12 Feb) Medium term trend is DOWN bearish (confirming) (1 month ending 12 March) Long term trend is UP bearish (disconfirming) (1 year ending Feb 2017)

7 Currencies The Dollar fell out of bed last week as investors began to wonder about future rate hikes in light of weakening data. The USDX lost more than 2% on the week finishing near 97. The Euro climbed above 1.11 while the Rupee Index held steady in the mid-67 area. I was mistaken about the Dollar last week as I thought there was a little more upside left before the retracement. While I thought a significant retracement was coming in February, I was a few days late in my prediction. Suddenly, the Dollar is sitting on key support at 97 close to its 200 DMA. One would think that if it falls below 96 it will likely retest the next level of support at Resistance is 97.5 so any move above that level would likely see a back test of rising channel support at 99. The long white candle on the weekly Euro chart has helped to stave off another retest of critical support at But it really needs to move above the previous high of 1.15 before it can alter the down trend. Janet Yellen is scheduled to give Congressional testimony this week so the market will get additional insight on the Fed s thinking going forward. If she is dovish, then we could see the Euro test that 1.15 resistance level. Further down the road, the market may also be waiting for further ECB easing. The possibility of another Draghi bazooka makes a move above 1.15 less likely. We could see some follow through on the downside for the Dollar this week. While some of the bearishness manifested a week early, there should be another day or two of declines, probably near the Venus-Jupiter alignment midweek. Monday may see the Dollar bounce to resistance at 97.5 but I think we could see 96 at some point this week. Next week looks more bullish on the Mars-Node alignment. The second half of the week looks more bearish. We could see the Dollar again test resistance at 97.5 by the end of the week. By the fourth week of February, I would think the window on the Dollar retracement would be narrowing. I would not rule out more downside but it looks less likely and even if it happens it will be short-lived. March looks bullish for the Dollar with another push to 100 on the DX very possible. A high is likely to occur sometime between March 15 and April 15. The Dollar could retrace lower in April and May but it again looks like a fairly shallow retracement. I suspect the Dollar rally will continue through most of 2016 with higher highs likely in the summer. A significant high is possible in Q

8 Technical Trends (Dollar) Astrological Indicators Target Range Short term trend is DOWN bearish (confirming) (1 week ending Feb 12) Medium term trend is UP Bullish (confirming) (1 month ending March 12) Long term trend is UP bullish (confirming) (1 year ending Feb 2017) Crude oil Crude oil lost ground last week as all the rumored emergency OPEC meetings to cut production never amounted to anything. WTI fell more than 6% closing near $31 while Brent similarly fell towards $34. This bearish outcome was not surprising although the size of the decline was somewhat unexpected as the late week was fairly negative after Wednesday s recovery. Crude did not quite make a hard retest of its December lows ($34/36) and now it is falling back to earth as bulls reassess. Bulls needed a higher low and Tuesday s low did provide exactly that as buyers moved in just below $29/32. While this is mildly encouraging, crude may simply be tracing out a neutral pennant pattern here of lower highs and highs lows. After a major decline, this is considered a continuation pattern and may only be a temporary respite before crude moves lower. But if bulls can quickly retest resistance at $34/36 next week, then that would tilt the balance towards more upside higher. Since I think the planets offer more optimism for crude in February, I think this is a more likely outcome. Whether or not it can push above that to the August low of $38/42 is less certain, however. This week could see another rally attempt. Monday could see some selling on the Mars-Sun aspect but the chances for a rebound increase as the week progresses. We could therefore test $34/36 again by week s end. My view is that there is a decent bullish window here from now until Feb 19 th. The planets do not look hugely positive but possibly good enough to coincide with at least some upside. That said, I would not be shocked if the rally never really gains any traction. Next week (Feb 15-19) could see some selling in the early going but again prospects may improve as the week goes on. $34 is very possible here and I would not be surprised if it broke above

9 resistance of those December lows. But the rest of February looks more mixed as Mars enters Scorpio on the 21 st. This looks like a negative influence although it may not manifest immediately. March therefore looks more bearish. I would expect a retest of the January lows at least in March, if not a lower low. A bottom is possible in April, possibly near the Mars retrograde station on the 17 th. A rebound is likely between mid-april and mid-may but this may not be strong enough to change the down trend in crude. June and July look very bearish and should produce a lower low, possibly as low as $20. A strong rally may begin in July and continue into August and September. It may well be significant enough to break out of the falling channel for a while. However, Q4 looks bearish once again. Technical Trends Astrological Indicators Target Range (WTI) Short term trend is UP bullish (confirming) $32-34 (1 week ending Feb 12) Medium term trend is DOWN bearish (confirming) $28-32 (1 month ending March 12) Long term trend is DOWN bearish (confirming) $20-30 (1 year ending Feb 2017)

10 Gold Gold soared 5% to 1174 last week as investors bailed out of the long Dollar trade on weakening economic data. The prospect of no more Fed rate hikes opened the door for more gold-friendly currency debasement. While I thought we would see some upside in gold in February, I was late to the game last week as I only thought we would get gains in the second half of the week. Certainly, the strongest gain did occur on Friday just as Venus conjoined Pluto but the early week was not bearish at all. Gold has quickly pushed up against that falling channel resistance at Can it go above that level? Its recent momentum higher is reason enough to think that more upside is likely in the short term. The next level of resistance may be the previous high at I would think the current move is for real if we get a weekly close above A clear breakout above the falling channel would be bullish and could bring in many more buyers. Support is now near the 200 DMA near so let s see how long gold can remain above that key threshold. It is worth remembering that gold has temporarily exceeded its 200 DMA several times during this four-year long bear market. But it has only managed to stay above it for a few weeks before selling off once again. While this close above the 200 DMA is short term bullish, it will take a more durable rally to end the bear market in gold. My basic view is that the upside is time-limited here and the bear market is not yet over. This week looks bullish for gold as both Sun and Venus align with Jupiter into midweek. Monday through Wednesday all looks bullish with Wednesday looking perhaps the most bullish day of the three. After Wednesday, however, there is rising risk of retracement lower. There are no clearly bearish influences, however, just an apparent weakening of bullish ones. I think the chances are good for a move above the previous high of 1190 and we should get several closes above And I would also not be surprised if gold significantly spiked higher this week. Next week (Feb 15-19) looks somewhat less bullish although perhaps not quite bearish. We could see further upside in gold, of course, but the gains look muted. I would think sideways trading is more likely. The last week of February leans bearish as both Mercury and Venus fall under the aspect of Saturn. This may not be a huge decline but rather a fairly typical overbought retracement. March looks more challenging for gold, however, especially in the second half. Jupiter will come under the aspect of Saturn for most of the month so I would think that some of the recent gains will be lost by the end of March. If the rally continues in February and moves to, say, 1250, then gold could still hold above 1100 (i.e. a higher low) after this retracement by April. We shall see. After a rebound into May, I would expect another down move in June and July. This should have significant downside force and should be enough to form lower lows. A test of long term support at 1000 is more likely during this summer time frame. Another even lower low is quite possible by January 2017.

11 Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) (1 week ending Feb 12) Medium term trend is UP bullish (confirming) (1 month ending March 12) Long term trend is DOWN bearish (confirming) (1 year ending Feb 2017) 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