Nifty has clearly formed a lower top at 11618 compared to the previous top of 11794 and what is more, it has breached swing lows of 11185,11111 and 10882 on closing basis. This was accompanied by heavy and sustained FII Selling.
The question uppermost in our minds is has the rally from March 23 2020 ended? Or is this a healthy correction from which the Index turns back again and scale new highs of 12,000+?
Let us look at astrological indications and see whether there are some sign posts for us pointing a direction into the future.
In the post for the week of September 14th, we had indicated how Ketu`s entry into Scorpio sparks off a correction from high levels.
Let us examine a couple more long term aspects to see if there is any correlation with our understanding from Ketu`s movement.We look at slow moving planets only because they are the trend setters for long term trend changes. Ketu is a slow moving planet.
Red dotted vertical lines are the dates when Jupiter and Neptune were 60 degrees apart.
Market top was formed around February 20 2020, and July 27 saw a continuation of the rally from March 23 bottom.Jupiter and Neptune will form a last sextile aspect this October 12. In fact the shadow effect shall commence from October 02 itself.
How did this aspect fare in the past?
In 1973 in a declining market caused by the oil crisis, we had three stations of this aspect as shown above. Market formed an important secondary top between second and third aspect before declining further.
We see the same pattern in 1968 -1969.Secondary top between second and third aspect before a bigger decline.
In 1955-1956, it was even more spectacular. The bull market from September 1953 ended between the second and third aspects of Jupiter-Neptune sextile.
Our Nifty is also between the second and third aspects of Jupiter Neptune sextile and has seemingly formed a secondary top. So this aspect is suggesting the likelihood of the Bear market continuing beyond October 12, 2020.
Now let us look at the black dotted vertical lines. They are the dates of Jupiter Pluto conjunctions in 2020.April 07, June 30 and November 12, 2020.The first was formed just after a crash bottom, second during a powerful upthrust and the third is still awaited.
Let us look at history..This is a very rare aspects..three Jupiter Pluto conjunction in close proximity and so we had to travel back quite a bit.
In 1955-56, we see the market forming an important top between second and third aspect, a retest after the third aspect and then a decline into 1957
Long term decline of 1955 56 is much clearly seen here.
So all three aspects Ketu moving into Scorpio, Jupiter sextile Neptune and Jupiter Pluto conjunction all point to more declines in the immediate future for Nifty
Another notable and important aspect in 2020 is the aspects formed by Mars with the outer planets.
Between March 20 and 31, Direct Mars conjuncts with Direct Jupiter, Pluto and Saturn, right at the time band when the falling market forms a bottom.
Between August 04 and August 24, Direct Mars forms square aspects with Jupiter, Pluto and Saturn where all three are retrograde. Within 5 days of these aspects, market form s an important top on August 31, 2020.
Between September 29 to October 19, 2020, Retro Mars will form square aspects with Saturn Pluto and Jupiter which are all Direct.We expect an important low to be formed around October 19.
The last aspect will be between December 23 to January 25, when all the planets will be direct.
On a more immediate scale, this week we have Saturn and Pluto both going Direct. This correlates to a crest or top formation in the week of October 05 and a trough formation in the week of October 12.
Most importantly, this aspect of Mars-Saturn square is happening when Mars is conjunct with Ketu in Navamsa. Do not let your anger or frustration or disappointment to affect your trading or living.Not a good time to commence any new activity.
Looking at the technicals of Nifty,
Nifty ended its up-cycle of August 03 on 09th September after 27 days.We can see how the new cycle is bearish.
1. It could not take out the 11794 top of previous sub cycle.
2. It broke the swing bottom of 11185 of the previous cycle.
3.While the upmost from 9th September took 5 days to move from 11185 to 11618 ( 413 points ) it broke this up-move in just two days ( faster retracement ).The cycle has already moved six days now and only now is showing signs of a temporary bottom.
So the first sub cycle in this new cycle has likely ended on September 24 and we are in the next bearish sub cycle. Remember in bearish cycles, upmoves will be faster but shorter and down-moves will be more prolonged.
Nifty has taken support at the 200 SMA.First hurdle will be 11173 to 11185.If that is achieved then the next upward target is 11292 to 11298;If that is achieved then the final target will be 11410 to 11460.A reaction could form from any of these levels. So be vigilant and take profits quickly.
We will not be covering any other index or commodity this week.
All the best!
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