(22 January 2024) Stocks rebounded last week as strong profit forecasts from AI chipmakers lifted the technology sector. The S&P 500 gained 1% on the week to a new all-time high of 4839 while the Nasdaq-100 added 3% to 17,314. The broader market was lower, however, with the Russell 2000 and NYSE Composite actually finishing in the red. Nonetheless, this bullish outcome was unexpected as I thought we might have seen more downside on the Moon-Mars and Mercury-Saturn alignments in the first half of the week. While Tuesday and Wednesday were down, the selling was fairly muted and this set the stage for the forecast late week rebound on the Mercury-Jupiter alignment.
The new highs would appear to sound the all-clear as bulls anticipate a move past 5000 on the SPX. And yet we are still in a position of only marginally higher highs which do not fully invalidate the bearish double top scenario with the Jan 2022 high. Bond yields also remain a source of concern as the benchmark 10-year Treasury pushed higher again last week and is signaling renewed inflation risks. While US economic data is still relatively robust, markets are beginning to factor in possible disruption of shipping from ongoing military action in the Red Sea. If the disruption of shipping routes continues, it will increase costs and could take yields higher. With the 10-year at 4.15%, it is now approaching a key resistance level of 4.25% which marked the October 2022 high. We will soon see if the current rise in yields is just a passing blip which will reverse lower or the start of a new major move higher. All things being equal, the stock market is unlikely to react favorably to a move back above 4.25%.
The planetary outlook continues to have a bearish bias. Despite the rally in tech megacaps, the broader markets are still in consolidation mode following their late December peak around the time of the Jupiter station. And despite the apparent waning of Jupiter and strengthening of Saturn, we have yet to see much in the way of downside. One possible explanation might be that ongoing 60-degree alignment of Jupiter and Saturn may actually be a positive influence that is overriding other factors, including the Saturn-Uranus and Saturn-Rahu transits, as well as the progressed alignments I have previously noted in the NYSE chart. Nonetheless, the current progressed alignment of Mars-Sun-Neptune is unlikely to pass without any downside consequence…
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Photo credit: The CBI
