The contradictions continue
to build in technical charts as we enter several weeks of high-energy
astrological conditions which suggest stock indices should sink
to retest the July Lows.
However, 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.
Weekly charts suggest a bottom arrived
in most worldwide stock indices in mid-July and that a multi-week
rally is underway.
There has been some shifting in the
indicators on monthly charts which suggest the downtrend since last
year is losing power and that a huge, multi-month rally could get
underway once these contradictions have been resolved.
The Nasdaq is primed for a sharp move
– and, unfortunately, some of the best technical analysts
I know disagree about which way it’s going to move.
Let’s deal first with the rally
which has taken place since mid-July. It has been weak … very,
Some indices – the DJI, the
S&P 500, the Dax – made it back to a price level which
was acceptable for a corrective rally … retracing a Fibonacci
38.2%. In fact, in the case of the Dax, it almost clawed back 50%
of the freefall which followed the May Highs.
However, the FTSE and the ASX 200
haven’t even come close to retracing 38.2%, stalling out only
a little above the 23.8% retracement level.
India and Japan have put in a similar
performance to the Dax, with both of them rallying to recover close
to 50% of the losses. And, so has the Nasdaq Composite.
So, we have these rather extreme divergences
between some world indices – and the contradictions I noted
last week between some of the US indices also continue.
On a purely technical level, the stalling
out of the rally at the 38.2% level in both the DJI and the 500
leaves the key American indices vulnerable to another drop which
retests the July Lows.
And that is a double-ditto for the
FTSE and the ASX because their rallies have been even weaker.
At the bottom in mid-July, the S&P
500 and the ASX 200 did not dip quite low enough to reach projected
price levels which would have given us a high level of confidence
that a solid Low was in place for an intermediate-term rally.
And the rally which has taken place
since then has been weak.
S&P 500 Weekly
to view the charts and download the entire Adobe PDF file]
Looking at the weekly chart of the 500, we can see from the last
two candlesticks just how indecisive everyone is about where this
index should go next.
The recovery from the July Low was
fast – but the index has gone nowhere for the past two weeks,
as both Bulls and Bears probe the upside and the downside before
ending each week almost exactly where prices started.
Overall, we see positive divergence
remaining largely intact on the CCI, with a relatively large degree
of agreement from both the MACD histograms and signal lines –
suggesting that a multi-week rally did get underway on July 15 and
that it has further to go.
And yet, those last two price bars
warn us there is still underlying weakness in this rally.
The extreme uncertainty can be explained by the astrological conditions
affecting world stock indices.
We have been discussing all year the
highly-negative impact of the long-term Saturn/Uranus cycle and
have been tracking the effects as faster-moving planets like the
Sun, Mercury and Venus “translate” the energy as they
contact Saturn and move on to
Just before the bottom in mid-July,
Mars added its weight by conjuncting Saturn. As expected, we got
some relief from the unrelenting downward pressure as Mars moved
off Saturn and began to trine Jupiter.
However, we now enter another period
where this Saturn-Uranus energy gets fired up – and it begins
this week as Mars opposes Uranus in late Wednesday trading in New
By mid-August, Mars will be squaring
Pluto and changing signs to Libra.
And this week also begins the passage
of the inner planets over the same ground that Mars is now traversing.
Venus will be the first to enter Virgo and move to a conjunction
with Saturn, repeating this part of the cycle.
It will be followed in fairly quick
succession by both Mercury and the Sun. And so, for most of August
the astrological emphasis is on the long-term Saturn-Uranus opposition
as the fast planets give us a foretaste of the real Bear market
which will unfold when this rare, five-set aspect slowly unfolds
over the next few years.
And there’s one of the really
big contradictions. Many people believe we’re already in the
Bear … and that it’s almost two-thirds finished.
However, technical studies suggest
the bottom in stock indices is not due until 2010 to 2012 –
and that fits with astrological studies which indicate it is not
until roughly the midpoint of the Saturn-Uranus opposition that
markets find a long-term bottom.
If these are correct, it is not impossible that we have not yet
seen the final High in world stock indices … that a huge,
multi-month rally will get underway in the next few months.
It is possible that what we are currently
in, is an A-B-C correction before stocks launch on the final Bull
leg which precipitates a massive, long-lasting crash. If that is
the case, the A downleg finished in March, the B upleg topped out
in May and the C wave downleg is still not finished, which might
explain the weakness of the rally out of mid-July and the extreme
contradictions which have opened up between various indices over
the past three weeks.
The danger is that the PPT will attempt
to manipulate an immediate rally.
Nevertheless, the astrological aspects
suggest the downtrend is in danger of resuming quite suddenly. The
midpoint of the astrological cluster is mid-August, which coincides
with two technical dates – the 14th and the 20th – which
will be either a top, or a bottom.
If it is a bottom, and that seems to
be the higher probability, it will be the start of a large, multi-month
At the very minimum, that will be
a slow, grinding consolidation which, nevertheless, takes most Western
stock indices back to a large retracement of the entire Bear campaign
That means, for example, the S&P
500 will recover to at least 1350 and perhaps as high as 1390.
The other alternative is that it goes
even higher – a last-gasp High for the Bull market which then
collapses into a multi-year Bear market.
The only other scenario is total doomsday.
It means we’re already in the Bear – and we ain’t
seen nuttin’ yet.
Looking at the charts, we would now still be in a developing Wave
3 downleg – with another, very sharp downwave still to unfold.
The only problem with that scenario
is that, if it occurs, it will not be the end of the Bear –
merely the start. The downwaves which unfold from last year’s
Highs will not be the end of the Bear, just the first wave down
in a devastating, multi-year Bear of fierce
That scenario is possible. What is
not very likely is that this is just a little, itty-bitty Bear who’ll
crawl back into his cave by the end of the year.
The astrology – and the technical
timing of various cycles – suggests the real bottom of the
Bear is still at least a couple of years away. And that does still
leave open the possibility that we’re actually in an A-B-C
correction within the last legs of a very long-running Bull campaign.
In either case – last defiant
bellow of the dying Bull, or first deep bite of the Bear –
we are probably approaching an intermediate-term turnaround.
Let’s put the astrology and
the technical picture to one side and look purely at the politics.
George Bush is at war with two Moslem
nations and making hairy-chested noises about a third – while
he has Condi Rice on constant shuttles to try for a “Middle
East peace plan” in a bid to leave office with some degree
His Republican colleagues know the
Democrats are a serious, serious threat – and will try desperately
to salvage the US economy between now and November in a bid to avoid
a total wipeout in the elections.
Astrologically, technically, politically
… all the “forces” indicate a strong attempt to
try to refloat the stock markets higher in the coming months.
But before that can happen, these
contradictions need to be resolved – and we need to be certain
that the downleg from the May Highs is actually finished.....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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