9 September 2017 Volume 10, Issue 37

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1 9 September 2017 Volume 10, Issue 37 Summary for week of 11 September 2017 Stocks may be more bullish this week Dollar likely to slump further Crude oil likely moving higher amid choppy trading Gold could extend its rally this week US Stocks Stocks closed lower last week as tensions over North Korea again compelled investors to assume a more defensive stance. The Dow lost almost 1% to 21,797 while the S&P 500 finished the week at This bearish outcome was in keeping with expectations as I thought the early week Mercury- Mars conjunction could be negative. While Tuesday s decline was substantial, the market was generally less volatile than I might have thought. Markets have one less thing to worry about with the debt ceiling issue now off the table. Trump s surprising deal with the Democrats removed one area of uncertainty for the month of September. It is too soon to say what the political implications may be of Trump s sudden turn away from his own party. On the plus side, the possibility of working more with Democrats could help him get his tax reform plans down the road. At the same time, relations with the GOP are strained and could create more unforeseen problems. Perhaps that means it s a wash for now, although it seems likely to create more political uncertainty in DC. The astrological influences remain bearish for the next month. While I might have hoped for more downside by now, there is another possible window for declines that opens up in late September and early October as the Saturn-Lunar Node alignment becomes exact. Both of these planets are slow moving, so it is more difficult to pinpoint the precise time when negative fallout is most likely to occur. I thought we might have seen some declines here in August and early September but markets have remained fairly buoyant. But the entire period of this alignment extends into mid-october so bulls should remain vigilant for some time to

2 come. Moreover, the entry of Venus into Virgo on October 8 could also coincide with some downside. This means that we could see another rally attempt here in September before the bears have the stars more reliably on their side. While I would not rule out more declines in September, the evidence does not strongly support more downside in the coming days. Given the entry of bullish Jupiter into Libra this week, I would think a short term bounce is a more likely outcome. After that, perhaps the bears have better chances. The technical outlook leans bullish. Last week s higher low bounced off the 50 DMA and gave bulls bragging rights and created a plausible basis for a new rally attempt to retest the all-time high at Horizontal resistance is near 2480, however, so it may take more than one attempt to break above that level. Bears may hope for a close below Tuesday s low and the 50 DMA at 2450 in order to create the possibility of a bearish double top pattern. It would require a move below 2420 to create any kind of downside momentum, however. On technical merits alone, one would think the chances for higher highs are fairly good. The Bullish Percent Index fell alongside the SPX last week and is in danger of another bearish crossover of the 5/10 EMA. Another retest of the all-time high would likely take this index higher but the negative divergence would be no less gaping. In other words, even if we get higher highs in September, this indicator is still pointing to some significant downside fairly soon. The weekly Dow chart still shows a sell signal on stochastics which remains below the 80 line. While higher highs are still possible in the short term, a retest of the 20 WMA at 21,451 is likely in the coming weeks, as is a deeper pullback to the 50 WMA. A tag of the long term trend line of the 200 WMA at 18,029 is also possible over the next year or two. While a retest of support from the 200 DMA often occurs about once a year, the test of the 200 WMA occurs less frequently. Meanwhile, bond yields fell again last week on geopolitical concerns as the 10-year broke below support at 2.1%. The lower lows hinted at declining economic activity and a dovish Fed that is reluctant to raise rates in the current environment. As a reflection of slowing economic activity, the yield spread between long and short dated bonds fell to new lows also. The bond market is not expecting any major economic expansion to take place under Trump as long as yields continue to fall.

3 This week leans bullish as Jupiter enters Libra on Monday. This is not to say that Monday will be positive, however, as the effect of such a sign change can be spread across several days. Rather, it suggests that some upside is likely through the week. The chances for some downside are somewhat greater on Wednesday and Thursday as the Moon opposes Saturn. This is not a high probability alignment, however, but it does suggest that the week will have its share of declines. Friday is a bit of a wild chard as the Sun aligns with Venus, Jupiter and the Lunar Nodes. This sort of benefic pattern can sometimes mark the culmination of a rally and can therefore result in a sharp sell-off as the positive energy is spent. A strong gain or loss is therefore possible on Friday. Nonetheless, I think the odds are good for some weekly upside here, and that means that the all-time high could well be retested at some point. A weekly gain is also therefore more likely than not. Next week (Sep 18-22) looks less bullish although I m not sure how much downside we will see. Monday leans bearish as the Moon conjoins Mars. Tuesday also could prove to be choppy at best as the Moon aligns with Saturn. The late week looks more bullish as the Moon conjoins Jupiter. The following week (Sep 25-29) looks bearish to start as Mars opposes Neptune on Monday. A larger than normal decline is quite possible here. The second half of the week looks more bullish as Jupiter aligns with Uranus. Early October looks decidedly more bearish as Saturn exactly aligns with the Lunar Nodes while Mars and Venus fall under the close aspect of Saturn. Regardless of where September may finish, I would expect lower lows in October. The entry of Venus into Virgo on Oct 8 also seems bearish and promises some weakness into mid-october at least. I think the second half of October should bring about a bounce although it may not be sufficient to offset the preceding decline in early October. November could see some gains in the first half of the month, but the second half looks bearish. Higher highs in early November are therefore still possible, although I think they are not probable. Another more bearish period is likely to extend from December into January. Lower lows are very possible in early 2018 relative to current September levels as a whole looks more bearish than Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) SPX (1 week ending Sep 15) Medium term trend is UP bearish (disconfirming) SPX (1 month ending Oct 15)

4 Long term trend is UP bearish (disconfirming) SPX (1 year ending Sep 2018) Indian Stocks Stocks edged lower last week as anxiety over North Korea s nuclear capability undermined sentiment. The Sensex lost less than 1% on the week to 31,687 while the Nifty finished at This bearish outcome was in line with expectations although the week turned out to be less volatile than I might have thought. We did see some selling on Monday but bears were unable to force the issue after that. Markets are in a holding pattern here as investors await further developments. North Korea remains a source of caution although barring any tangible military action, it may well fade from the headlines for a while. Domestic growth concerns have re-emerged following fairly mediocre results for Q2 following demonetisation. While the Modi government is coming under increased criticism, its reform agenda is still seen in a positive light. Global growth indications remain mixed as weakening US data may be offset by a European revival. In the other words, the fundamentals are still in place to foster profit growth which should be bullish for stocks long term. From an astrological perspective, our concerns are more immediate. Previously, I had highlighted the August to early October time frame as one where declines would be more likely. The bearish Saturn-Rahu alignment dominates this period and is one important reason why stocks may struggle. So far, however, the pullback has been modest and has not shown a marked variance from previous bull market pullbacks. And with the prospect of some gains on this week s entry of Jupiter into Libra, it seems likely that more downside will be pushed back to later in September and into October. As a point of reference, the exact Saturn-Rahu aspect occurs on 9 th October which is also the same day that Venus enters Virgo. Both of these are bearish influences are likely to weigh on sentiment next month. Until then, it is possible stocks will go sideways and even small rallies are possible which could retest all-time highs at 10,100. The takeaway here is that lower lows (9700? 9500?) are looking more likely in October rather than September. Q4 as a whole seems less likely to produce higher highs as another move lower is looking likely by the end of November.

5 The technical picture remains bullish on longer time frames. From a short term perspective, however, bulls may have feeling the heat a bit more as the August pullback still straddles the 50 DMA. While a previous pullback in June may have also lasted about a month, the Nifty traded above its 50 DMA for its entirety. This is not the case now as the upward momentum has slowed. Clearly, the rally has entered a more mature phase where gains may be more moderate. The inability of the Nifty to retest its previous high after this five week pullback is another sign that the rally is evolving. MACD looks weak as it is in danger of another bearish crossover which could take it below the zero line. Stochastics has also fallen below its key 80 line and may be pointing towards more downside. Neither of these indicators is strong evidence for further declines and yet they fit best with the bearish view. Resistance is at 10,000 so any move above that level would likely mean we will see a retest of the all-time high at 10,100. Indeed, last week s higher low hinted that the bulls had some short term energy available to them. Support is offered by the 50 DMA at A brief move below that line is still permissible in the bullish view but a close below 9800 would be much more bearish. Interestingly, the 20 DMA has slipped below the 50 DMA for the first time in This is another artifact of the evolution of the rally and need not be a sell signal. On the other hand, it would seem to fit the bears narrative of the market best, however. The weekly Sensex chart still shows a bearish crossover in MACD although stochastics may be on the verge of turning higher. In other words, the clear early August sell signals have become more clouded. The pullback may either be pausing for continuation lower or it could be indicating a longer rebound. Meanwhile, Tata Motors (TTM) saw its tentative bounce reverse lower last week. The bounce was both brief and weak so it seems likely that we will get a hard retest of the August low in the coming days. While bulls may be waiting to enter long positions at the Aug lows, the weakness of the bounce increases the risk that the stock will simply fall through support to lower lows. Resistance is at the high from the 1 st September. Infosys (INFY) also took it on the chin last week as it broke below its 200 DMA. By contrast, its intervening bounce was strong so even if it falls further here to a hard retest of the August low, it may be a more secure zone for bulls to enter long positions. This week leans somewhat bullish as Jupiter enters Libra on Monday. Whether these potential early gains will hold by Friday is hard to say. This Jupiter influence should translate into some upside throughout the course of the week. Declines are perhaps more likely to occur on Wednesday as the Moon opposes Saturn. Thursdays Sun-Saturn square also carries with it an added bearish potential although I m uncertain how much damage it may cause. Friday is hard to call as the

6 Venus-Rahu conjunction looks more positive although Mercury conjoins bearish Mars on that day also. One possible scenario for this week would be some early week upside followed by some profit taking. Perhaps that means that we will see another test of resistance at 10,000. I would even not be surprised if the Nifty pushed above that level at some point this week.. That said, it is still possible that the mid and late week Saturn aspects with the Moon and the Sun could prove to more bearish than anticipated and could possibly retest The relative influence of these offsetting aspects is hard to assess and suggests a mixed outcome. Next week (Sep 18-22) looks bullish to start on the Sun-Jupiter alignment. Tuesday s Mercury- Neptune opposition seems somewhat bearish so that could translate into a more mixed week here. I would not rule out further upside but the bullish indications are not strong. The following week (Sep 25-29) looks more bearish as Mars opposes Neptune. This may only translate into a one day decline but it could be significant. Monday and Tuesday look to be the most bearish days in that respect. A retest of support at 9800 is possible here, assuming that level is still acting as support. October looks more bearish as Saturn aligns exactly with Rahu on the 9 th just as Venus enters Virgo. A further 5% decline is quite possible by mid-october. Late October may see a bounce as Mercury and the Sun conjoin Jupiter. This rebound could extend into November also although I would be skeptical about the ability of bulls to make higher highs. Another corrective phase is likely to begin by late November or early December. This should extend into January at least. Lower lows are quite possible. While Q1 could be bullish overall, 2018 is looking to be a more bearish year than Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) ,000 (1 week ending 15 September) Medium term trend is UP bearish (disconfirming) (1 month ending 15 October) Long term trend is UP bearish (disconfirming) (1 year ending September 2018)

7 Currencies The Dollar fell further last week as falling bond yields, Korean tensions and the impact of seasonal storms undermined confidence in the greenback. The USDX ended the week at a new low at The Euro pushed above 1.20 as Mario Draghi refused to rule out an extension of quantitative easing. The Yen fell below 108 while the Rupee traded below 64 as it moved closer to retesting its recent August low. Nobody seems to want the Dollar here as the lower lows look quite ominous and point to lower lows ahead. Horizontal support at 92 did not hold so there may not be a compelling reason to own the Dollar until it falls below 90. It is currently trading near support from the falling channel so that could argue for a short term bounce. The 20 DMA (92.79) is acting a resistance in this protracted decline so bulls hoping for an oversold bounce would likely get out if it rallied back to that line. Alternatively, this could be part of a temporary shake-out of stop losses at 92. We should not exclude the possibility of a strong bounce once all of these positions have closed. With the Euro now halfway to its long term upside target of 1.25, it is possible we could see some overbought retracement fairly soon. Support is likely near 1.17 and the 200 WMA. Dips will be bought aggressively unless there is some unexpected news from the Sep 20 FOMC meeting. Few are expecting a hike, but details about the unwinding of the Fed s balance sheet is one potential source of uncertainty. The market is expecting the Fed to remain dovish as long as possible given the weak inflation data. This week could see the negative trend continue as Jupiter enters Libra. This should produce some further declines at least in the early part of the week. The late week is perhaps somewhat more bullish but overall I think the Dollar could fall further. Next week could see more weakness on the Mercury-Neptune aspect so lower lows are also possible. In fact, we could see the Dollar remain bearish until Sep 26 and the Jupiter-Uranus aspect at least. This means that a move below 90 looks likely. That could mean that the Euro may well reach its target of 1.25 sometime in October. This would equate to about 88 on the DX. The chances for a reversal higher are better in October and I would expect the rebound to extend into December. While the rebound looks fairly strong, a retest of the 200 DMA could prove to be difficult. We shall see. Q looks bearish again and if the preceding rebound is fairly modest, then there is the possibility of lower lows in early A more durable rally in the Dollar is likely to begin by June Technical Trends (Dollar) Astrological Indicators Target Range

8 Short term trend is DOWN bearish (confirming) (1 week ending Sep 15) Medium term trend is DOWN bearish (confirming) (1 month ending Oct 8) Long term trend is UP bullish (confirming) (1 year ending Sep 2018) Crude oil Crude pushed higher last week as weakness in the Dollar put a bid under commodities. Despite Friday s sell-off, WTI finished the week slightly higher at $47.48 while Brent finished just below $54. While this bullish outcome was not unexpected, I thought the early week might have been more bearish. Crude is trading in a range here as bulls are not strong enough to climb over the 200 DMA while bears cannot break below the 50 DMA. The lower high and higher low conforms to a neutral pennant pattern. And yet the size of Friday s decline suggests the likelihood of some downside follow-through in the coming days. If we get a break below the 50 DMA, bears will want to retest the WTI August low of $46. If that level should hold, then bulls will have a decent chance to retest the 200 DMA. The daily chart only becomes decidedly bearish if there is a move below the August low. Similarly, bulls need to break above the July high of $50.50 to generate some upside momentum. The crude chart looks much more bearish when denominated in other currencies such as the Euro, as a retest of key support at the June low looks imminent. The weekly Brent chart paints a more bullish picture as price is hugging the 50 WMA and is trending higher. Last week s gain offered hope to bulls of an eventual retest of the previous highs in the $57 area. The chart should therefore be seen as leaning bullish for the medium term even if the longer term outlook does not look very positive.

9 This week could see some upside as Jupiter enters Libra although the gains may not last. Monday itself may not necessarily be bullish as the Moon aligns with Mars. Gains may be more likely on Tuesday and Wednesday although there remains considerable uncertainty there. The late week leans a bit bearish as Venus conjoins the Lunar Node. Overall, there is a decent chance for another test of the 200 DMA this week. And yet there are some specific patterns involving the crude oil horoscope that make me reluctant to forecast a strongly bullish outcome here. I think crude is likely to retracement lower in the second half of September and October so I will not be shocked if this week s gains never really show up. Bulls should be on their guard here even if they end up winning the week. Next week (Sep 18-22) looks mixed with gains somewhat more likely in the first half of the week. The late week leans a bit bearish, however, as Mars opposes Neptune. The last week of September looks more bearish and could see a hard retest of support at the 50 DMA, if not lower. The first week of October could see a brief bounce but it seems unlikely to change the technical picture significantly. By mid-october, we could see another move lower. Overall, I think the month of October will be bearish for crude. A rebound is likely in November but it will likely reverse lower by the time of the Mars-Lunar Node alignment on Nov 20 th. This could mark the beginning of an extended retracement that lasts into early A move below $42 for WTI looks likely by February. Technical Trends Astrological Indicators Target Range (WTI) Short term trend is UP bullish (confirming) $46-49 (1 week ending Sep 15) Medium term trend is UP bearish (disconfirming) $44-48 (1 month ending Oct 15) Long term trend is DOWN bullish (disconfirming) $45-60 (1 year ending Sep 2018)

10 Gold Gold extended its recent rally on more Dollar weakness and renewed anxiety over North Korea. Gold gained more than 1% closing at This bullish outcome was not unexpected as I thought the mix of aspects hinted at a continuation of the previous week s upward momentum. We didn t really see much downside on the Mercury-Mars conjunction and even Friday managed to post a small gain. The gold breakout rally is fast approaching its previous high of Its measured move upside target is closer to 1400, however. Although it is overbought on a daily basis on the RSI, gold is not yet overbought on a weekly basis although it is getting close (RSI=67). The pace of the rally is therefore likely to slow as it gets closer to the resistance zone of In the event we see a pullback in the coming days, horizontal support is Buyers would likely move in if gold approaches that level, although selling could accelerate in the event that gold falls below As always, the previous resistance level of 1300 is now medium term support. This is a bit below the 20 DMA (1309) which may also serve as support going forward. The strength of the rally may be seen by how gold negotiates that level. If it can move through it quickly then it would signal that there is much more upside to go. If it gets bogged down, however, then it could be prone to a period of consolidation or even a reversal. This week offers the bulls some decent alignments as Jupiter enters Libra on Monday. The late week also leans bullish as Venus and the Sun align with Jupiter. There is a possibility we could see some midweek selling around Wednesday s Moon-Saturn aspect but I would not expect it to be too significant. Overall, there is some reason to expect a test of 1375 this week. Next week (Sep 18-22) also offers a plausible bullish set up as the Sun aligns with Jupiter early in the week. The late week may be less bullish but overall I would lean towards more upside. While September on the whole is bullish, I am expecting a pullback to take place in late September or early to mid-october. Late September looks mixed at best as Venus approaches its conjunction with Mars. While further upside is possible, the planets look less clearly bullish. Perhaps it will reflect some consolidation under key resistance (1400?). Early October also looks mixed with a rising downside risk. I tend to think that the chances for a larger decline will increase only after the exact Saturn-Lunar Node aspect on 9 October. This will coincide with the bearish entry of Venus into Virgo. If gold is still rallying in early October, then these twin influences are more likely to arrest the rally.

11 Moreover, the entry of Saturn into Sagittarius on Oct 25 th will be another obstacle for gold bulls to contend with. Overall, October should produce a sizable pullback although it may not be large enough to upset the rally. The key level in this respect will be November will likely bring a rebound although I am uncertain if it will be strong enough to produce a higher high. The period of December to February 2018 looks more decidedly bearish so that should represent a large retracement from the current rally. By Q1 2018, gold could be trading back in its previous range of as a whole looks choppy with a bearish bias. Even if we see a rally in Q2, another retracement is likely in Q3 and Q4. Technical Trends Astrological Indicators Target Range Short term trend is UP bullish (confirming) (1 week ending Sep 15) Medium term trend is UP bearish (disconfirming) (1 month ending Oct 15) Long term trend is DOWN bullish (disconfirming) (1 year ending Sep 2018) 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