Mercury, Venus and Jupiter conjunction may lead to gains

Stocks slumped last week as the Reserve Bank of India rate hike refocused investors attention on inflation and the prospect of falling corporate earnings going forward. Despite Friday’s reversal, the Sensex lost more than 3% during the week closing at 18,518 while the Nifty finished at 5,551.

This bearish outcome was not unexpected as the early week Mars-Rahu aspect coincided with Tuesday’s rate hike and the subsequent sell-off. This was a bearish pairing of malefic planets whose negative potential was increased by the entry of Mars into Aries on Tuesday. I had thought we would see some upside as the week progressed, although buying only arrived on Friday’s session as Mercury approached Venus.

The early impact of this week’s Jupiter-Rahu aspect is already being felt as some of the speculative froth is being eliminated from the riskier asset classes such as gold, silver and crude oil. As I have mentioned previously, the Jupiter-Rahu combination symbolises speculative excess and unsustainable rallies in assets that attract more adventurous investors.

To the extent that equities also fall into this higher risk category, there are some signs that the “risk trade” may be in jeopardy as global markets are starting to fall and thereby catch-up to India’s bear market is already in progress.

While Jupiter is a fairly reliable bullish influence, its tendency towards optimism and rising prices can be distorted by Rahu’s more unpredictable effects. The result is often an interruption of prevailing financial assumptions which can be marked by large price swings in both directions.

This combination tends to be more bearish, however, although its effects may be more likely to manifest in the aftermath of its aspect. The aspect is exact on May 7. The fact that we have seen falling prices ahead of this aspect mitigates some — but not all — of the negativity we could see after this aspect is exact.  
This week could see some significant moves.

Aside from the exact Jupiter-Rahu aspect, there is also a fairly rare triple conjunction of Mercury, Venus and Jupiter that is exact on Wednesday. Since all three of these planets are considered positive, there is some reason to expect some gains this week, especially in the days preceding the conjunction. The complicating factor, however, is that this triple conjunction will occur under the shadow of Rahu.

This could manifest in a couple of different ways. One possibility is that we could see a rise in the early part of the week followed by a reversal lower. The other scenario is that the presence of Rahu may substantially reduce the early-week upside and generally induce a more bearish mood throughout the week. I tend to think we will see at least some upside here, perhaps more so on Monday, and perhaps again on Friday.

There is a potential for some genuine volatility in both directions here, although the Rahu influence would tend to recommend a very cautious bias.

Amidst a reduced demand forecast, crude oil plunged to under $100 last week, aided by a recovering US dollar. I had been fairly equivocal about crude last week as I noted the possibility of both gains and losses. However, the oncoming Jupiter-Rahu aspect appeared to have carried the day as speculators were taught the lesson of the fleeting quality of gains obtained under Rahu.

This week has the possibility for upside on the Mercury-Venus conjunction early in the week. With Rahu stalking the market, however, we may see some more significant downside by the end of the week.

As the air came out of the commodities bubble, gold found itself on the wrong side of $1,500 as the recovering US dollar reduced bullion’s appeal. While I expected some declines early on the Mars-Rahu aspect, the extent of the sell-off was somewhat surprising. As I suggested last week, gold may be one of those assets (like silver) that could be severely affected by this Jupiter-Rahu aspect.

The only problem was that the decline arrived a little ahead of the exact aspect on May 7. We could see some rally attempt early this week as Venus gets a lift from Mercury, but the Rahu influence could undermine bullish sentiment as the week progresses.

The writer is a neo-Vedic astrologer specialising  in predictive astrology. He runs the website www.modernvedicastrology.com