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The World At Large
Week beginning August 10, 2008
by Randall Ashbourne

Astrological conditions affecting stock markets combined with technical analysis

Click here for the full version of this report including technical charts in PDF format

The rally which got underway on many world stock indices in mid-July will face its biggest test late this week, or early next.

I had expected the astrological conditions unfolding during that time were sufficiently negative to mark a likely bottom from which a cyclical rally lasting at least one to three months could develop.

However, I now need to reconsider that scenario.

In last week’s World report, I indicated that technical contradictions, combined with the astrological conditions, suggested stock indices “should sink to retest the July Lows”.

I immediately qualified that statement in the second paragraph of the report, saying: “…there is one indicator which points to an imminent and massive intervention by Wall Street’s Plunge Protection Team to goose the American indices higher.”

I also reported there had been a small change in an indicator known as the McClellan Oscillator the previous Friday and that small changes in that indicator “usually foretell a sudden and large price movement within two or three days”.

On Tuesday, day two after the small change, we got the massive intervention by the PPT and a large price jump which recovered three days of losses in a few hours.

On Friday, the PPT appears to have intervened again in a very determined bid to push this rally higher – and the technical readings which warn of potential further intervention continue to exist.

At this stage, the fact that volume was lower on this thrust higher than at either of the two previous thrusts on July 23 and July 30 is irrelevant.

As I said last week: “The Americans have a saying: “Don’t fight the Fed”. Knowing the conditions now exist for the Fed’s proxy, the PPT, to intervene to manipulate Wall Street higher, we have a dangerous situation … technical charts and astrology which suggest another downleg before a firm bottom is in place opposed to a high probability of official intervention to try to stop it from happening.”

That situation continues. The PPT has been known to play this game for weeks at a time, using its buying power before the open to force the Futures markets higher so that anyone who is shorting the market scrambles desperately to get out of the PPT’s way.

I also indicated in last week’s report that if the American indices were vulnerable to further downside testing of the July Low, it was a “double ditto” scenario for the FTSE and the ASX.

I was wrong about the FTSE and right about the ASX. In purely technical terms, the ASX behaved with impeccable manners.

I said of the ASX: “All of this leaves the 200 vulnerable to another downleg, unless it can rally immediately and decisively.

We should not be too concerned, however, if that occurs … because the new Low will, at worst, break only marginally below July and will cement a strong bottom in place to allow for a longer, cyclical rally to develop, even if it’s a slow grind higher.”

The ASX did not “rally immediately and decisively” last Monday. It had a weak day – and that was followed by a big gap down on Tuesday which broke “only marginally below July”.

The break was sufficient to take the index a little below the ideal 4772 price level marking a perfect Fibonacci retracement – a target I’ve been indicating needed to be hit so that a cyclical rally could develop.

The ASX has now fulfilled the criteria necessary and is – in all probability – engaged in building a base.

It will, of course, be whipped around by any shenanigans on Wall Street, but I am at least a little encouraged by the fact the ASX has behaved so precisely.

We are entering another high-energy zone – with Venus due to conjunct Saturn late this week, Mars squaring Pluto next weekend as we get the Lunar eclipse (conjunct Neptune) matched to the recent Solar eclipse, and the Sun opposing Neptune.

Any one of these three can move the markets in a big way; the combination of all three happening virtually simultaneously with an eclipsed Full Moon compounds that potential.

The next major astrological events are in early September, when Jupiter and Pluto both go Direct again – and that coincides with the second of Jupiter’s three Earth trines to Saturn, the first of which put a stop to the January price plunge.

Technically, there are cycle and Fibonacci dates clustering in the period from the 14th to the 20th.

The next major Fibonacci date is not until the third week of September, suggesting any market turn which begins late this week or by the middle of next week will continue running until then.

Oil and gold have both declined to levels which suggest a rebound higher is now becoming imminent – even if those rebounds are just short-term relief rallies within a larger correction.

ASX 200 [click to view the chart and download the entire Adobe PDF file]

We’ll start our technical round-up with the ASX 200, which is likely to bounce higher on Monday, following Wall Street’s Friday spurt.

We can see last Monday’s weak performance did indeed leave the index vulnerable to another drop – the big gap down on Tuesday which broke to 4758 before recovering to keep its head above our Support line.

This chart is likely to be altered by Monday’s performance, but for the moment we can see the last two thrusts higher have been weaker than the initial rally out of the July bottom.

If this pattern had shown up on the DJI and the S&P 500, virtually all Western stock markets would now be looking at a cyclical rally lasting from 45 to 90 days.

.....CLICK HERE to download the FULL version of this report with all technical charts and further comments. (PDF format)

The World At Large is delivered in advance to Astrological Investing Premium Member subscribers.  Randall Ashbourne is a former journalist and political strategist residing in Australia. *QHT Technical Charts created using Quick Harmonic Trader Software, by P.A.S. Astro-Soft, Inc. makers of Galactic Investor Astrology software.


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