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.The World At Large
Week beginning December 14, 2008
by Randall Ashbourne

Astrological conditions affecting stock markets combined with technical analysis

Click here for a printable version of Week beginning December 14 report including all QHT planetarty line charts and technical charts in PDF format.

Despite a huge display of astrological energy highlighted by a Full Moon making a Grand Cross with the Sun/Mars T-square to the Saturn/Uranus opposition on Friday, Wall Street managed to hold its nerve.

It’s an indication that internal strength in worldwide stock markets is actually starting to improve.

We’re not clear of the negative influence quite yet, with the Mars square to Saturn still to become exact early this week.

But, in theory at least, the most negative impact should have been on Friday – and on most world markets that appears to have occurred.

The only real worry is the similarity with what happened several weeks ago when US Treasury Secretary, Hank Paulson, and US Federal Reserve chairman, Ben Bernanke, had their initial approach for a massive bailout program rejected.

The collapse in stock markets after that event was repeated to some extent throughout Asia and Europe on Friday – which would explain why the White House very quickly promised to find some way of keeping the Big Three car companies in cash until next
year.

Not far into next year – about January 20 would be a reasonable guesstimate.

After Mars completes the T-square pattern, the only significant astrological aspects happening for the remainder of the year are for the Sun and Mars to join Mercury in making the move to Capricorn … and conjuncting Pluto; Venus conjuncting Neptune after
Christmas; and Saturn turning Retrograde to kick off 2009.

Technically, we have a major Fibonacci turning point – in fact, a whole cluster of Fibonacci dates – due between December 23 and 29.
The latter part of that time frame is also the New Moon in Capricorn, conjunct Mars and Pluto … and with Mars still at what is called “the Aries point”, the first degree of a Cardinal sign.

In other words, it’s another very strong astrological condition and if markets are going up into that time frame, it’s likely to mark the top of the first leg back upwards since markets apparently bottomed on November 21.

We’ll take an in-depth look at the broad Wall Street blue chip index, the S&P 500, this week to get a sense of what’s in store for worldwide markets as we close out one of the worst years in stock market history.

And we’ll start by looking at the planetary price line influences.

S&P 500 planetary price line influences [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)
S & P 500 Harmonics - planetary price lines

And immediately we can see the potential for another day or two of weakness – until there is some certainty over the auto manufacturing bailout.

I showed this chart last week with price targets, upside and downside, for the T-square aspects.

The ASX 200 hit the T-square price crossing exactly last Friday – but the DJI and the 500 failed to oblige, so we cannot be certain of either a temporary top, or a sure bottom, in either of those indices.

However, since the 500’s price has crossed to the wrong side of the uptrending 4th Harmonic Mercury line, it remains vulnerable now to following the dashed 1st Harmonic Mercury down to the Sun (green) or Mars (red) uptrending lines.

The 1st Harmonic lines are usually much more powerful – as we can see by how closely the index followed 1st Harmonic Venus down from the US election High. If there’s further weakness early this week, the Sun line is at a price of 830 on Monday and the Mars
square Saturn price crossing is at 815.

500 Triangle [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)
S & P 500 Triangle Technical chart

This is not our normal technical chart for the 500, but I wanted a very clear graphic which shows the same potential as indicated in the planetary chart.

The index is holding its uptrend line from the November Low. But, it is now rapidly approaching the point where it simply must break clear of Resistance at the 900 mark, or the rally becomes extremely vulnerable. We’ll turn next to the weekly chart …

S&P 500 Weekly [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)S & P 500 Weekly Technical chart

Firstly, the fast, blue CCI line has crept above the Zero line for the first time since July and the indicator, as a whole, has recaptured and is maintaining the positive divergence line which now goes back nearly 18 months.

The Stochastics are improving, but have yet to move decisively out of the Bearish zone; the MACD histograms are shrinking and the MACD signal is still making its slow turn upwards.

On the price chart, the bars are holding the uptrend line – but will encounter what will probably be temporary Resistance around 940.

However, we need to note that the closing prices have been lower for each of the past two weeks and that last week’s bar is one which confirms “indecision”, as shown in the two previous charts.

Now, let’s turn our attention again to the Neptune price line chart.

S&P 500 Neptune planetary lines [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)S&P 500 Neptune planetary lines

We’ve discussed this Neptune chart over the previous few weeks and we can see the index last week made some attempt to rise to the next level of Neptune prices.

I mentioned on the previous chart there’s likely to be temporary Resistance around 940 –and that’s confirmed by the next level of Neptune at 939 and 951.

I don’t think there’s much doubt the 500 is going back to 1043 as a minimum move and holding in a relatively stable and narrow range during last week’s extreme high-energy astrological conditions, strengthens my belief that having the Federal Reserve’s Plunge Protection team sidelined is restoring a degree of much-needed normalcy to trading conditions.

It would be a damn good thing for traders and investors across the world if transiting Pluto’s conjunction with the US Federal Reserve’s Sun leads to the complete dismantling of the PPT, whose frantic attempts to prop up profits for their Wall Street mates have manipulated stock prices for more than 5 years and helped create the conditions for one of the fastest crashes in history.

S & P 500 Daily [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)S & P 500 Daily technical chart

And, finally, to our “normal” view of the 500.

As with the previous charts, we have signs of very significant improvements in the underlying internals of the markets – with short-term hesitation hampering the picture.

Note that on the first chart in the series, the fast RSI 3 is at the 50 level, wondering whether to cross; the Ratio Oscillator on thesecond chart has gone negative, but could turn … and we have some negative crossovers on the CCI and the Stochastics on the
chart above, although we could get a turn-up in the red CCI line from here – a Zero Line Rejection, which would be a strong rally signal.

The US Federal Reserve has its last meeting for the year this week and is expected to cut interest rates again. It’s likely to be the final cut, taking rates down to 0.5%. Some sort of rescue program for GM and Chrysler, in particular, has to be sorted out … and we’ll have “earnings” … *cough*splutter*gag*choke* … reports from Goldman Sachs and Morgan Stanley.

I love fantasy!

Volatility Index [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)
Volatility Index

The VIX, the fear index, is suggesting at least the potential for further price weakness.

There is slight positive divergence – which is negative for stock prices – in the CCI.

It should, however, be only temporary.

It is an encouraging sign that the VIX reflects a calmer emotional state among traders and investors.

The daily bars are contracting very nicely and the MACD signals continue in a downtrend which should take the VIX readings below 50 and then, hopefully, back below 30.

There is one more chart we should assess in analysing the potential for a worldwide rally
in stock prices …

Baltic Dry Index [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)Baltic Dry Index

The Baltic Dry Index is the daily movement of shipping rates. Unlike stock markets, gold prices, commodity prices etc, it can’t be manipulated, the hedge funds can’t play with it, and the PPT can’t goose it.

Almost better than anything else, it shows the total collapse in world trade which erupted in early October. Basically, the world stopped moving.

Last year, freight rates were through the roof and shipbuilders worldwide were inundated with contracts for new boats because there was an international shortage of freighters.

A few weeks ago, spot freight rates were so low they were actually lower than the cost of operating the ship and ports around the world had been turned into huge parking lots.

We haven’t looked at the BDI for months and I’m grateful to one of our Singapore readers for reminding me what a useful tool it is for getting an idea of what’s happening in the global economy.

As we can see, the hiring rate for ships is starting to rise again – and with some fairly significant positive divergence in the MACD. The importance of the chart is that it signals the threat of global recession is easing … that the demand to shift stuff, whether raw
materials or manufactured outputs, is starting to move off the bottom.

Dow Jones Industrials [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)Dow Jones Industrials

Since the spike Low on November 21, the DJI has been rallying back inside the previous congestion zone, making a new higher High last Monday.

Last week’s price action clearly broke above the main downtrend diagonal from September and Friday’s bounce, leaving the bar standing tall on its tail, is encouraging, especially since Monday’s spike higher was confirmed by a higher peak in the CCI.

But, as we can see, the vulnerability remains. Monday’s price action was not followed through by a challenge of the next main level of horizontal Resistance at 9316. That’s not surprising given the astrological conditions last week.

The DJI must now move immediately back above horizontal Resistance at 8700, rising along the blue trendline which is a parallel of the rally angle into early November – or it is vulnerable to more downside, likely to follow the same downturn angle we’ve copied
from the election peak.

The MACD is still positive and both other indicators can turn north from here, but the break of the CCI trendline signals the need for caution early this week.

DJI Planetary Price Position [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)

Dow Jones Industrial Harmonic planetary price lines

The planetary price lines give a similar warning. We could be more assured of immediate further rally if the DJI price had made an exact touch of either Sun square Saturn or Mars square Uranus.

But, it didn’t – and it is still vulnerable to the negative pricing implication of the downtrending, dashed 1st Harmonic Mercury, just as it followed Venus down from early November.

It is an index heavily influenced by Mercury; take a look toward the left of the chart and how prices behaved in the wavy Mercury Retrograde period!

The fast RSI 3 indicator is also hedging. The red RSI 14, a more normal measurement, is hovering indecisively at the neutral 50 line and the blue RSI 3 could yet suffer a rejection.

The price level for this week’s Mars square Saturn crossing – after Monday’s close in New York and 20 minutes before the ASX open on Tuesday – is around 8156 for the DJI. If it bounces strongly from that level, after making a precise hit (or drop-through and recovery), it has a chance of breaking the Mercury influence and responding to temporary positives from the rising Sun/Mars lines.

Nasdaq Composite [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)

NASDAQ Composite

We have basically the same sort of situation with the tech-heavy index.

It is a clear break of the main downtrend diagonal from September, but, so far, an inability to break above a relatively low level of horizontal Resistance. This is not unduly worrying … because it was a negative astrological aspect week and I made the point after
the US election that the sidelining of the PPT was very likely to usher in stepped, cautious rallies, rather than massive one-day surge “rallies”.

The index is holding a mild and sustainable uptrend angle, rather than having a *gee*golly*gosh* Pollyanna flush … but it does appear as if a new triangle pattern has emerged, marked by the two red diagonals.

It is not yet a confirmed pattern, however. Nevertheless, it’s clear we need a strong break of 1600 to confirm continuation of this rally phase into the potential Fibonacci turning point cluster.

Failure to get above, and hold, Thursday’s High at 1568 would be a signal for real caution with Long positions. It would be worth keeping a close eye on the CCI to check whether the red indicator can hold the short-term uptrend line for more Bullish price action.

EUROPE
London [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)

London - FTSE

The FTSE seemed determined to hold prices at a relatively high level until news of the US Senate’s rejection of the auto bailout hammered Asian and European indices on Friday.

The MACD histograms and signal lines give us a reasonably positive outlook, but the CCI has hit levels which have signalled the arrival of temporary tops.

It is a good sign that last week’s CCI peak matched that of early November, given that it has happened with lower prices on the index.
But it would be a brave call to suggest we’ll get an immediate Zero Line Rejection signal higher from the blue CCI.

Especially since the FTSE ran into Sun/Mars versus Saturn/Uranus troubles.

FTSE Planetary price crossings [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)
FTSE planetary harmonic price lines

While the US indices did not give us a clear direction by making precise contact with the Sun & Mars T-square to Saturn & Uranus, the FTSE made very precise contact.

Saturn and Uranus price lines held the index rise in check for four days. Thursday made an attempt at breakout, but closed the day with the price exactly at the Sun square Uranus price crossing.

On Friday, the contact came exactly at the Mars square Uranus price crossing – and whoops!

It found some support from a rising Venus line after testing technical Support at 4200.

But the FTSE’s ability to rise much higher in this rally phase is going to be severely tested.

Let’s zoom out and take another look at a very strong planetary pricing picture.

FTSE & 1st Harmonic negatives [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)
FTSE 1st Harmonic planet lines - negative

A little bit of a worry, non?

A picture which strongly suggests this bounceback does not have any real legs to go much higher before failing.

I’ve left 1st Harmonic Mars out of this chart in an effort to keep the planetary “threat” as clear as possible.

The FTSE has broken the Venus downtrend barrier again, but it has 1st Harmonic mirrors from the Sun and Mercury to break through.
As we neared the last Mercury Retrograde period, the FTSE did get through to stall out at the Sun downtrend.

As we can see with the Mercury line beginning to curl at the right edge of the chart, we have another Retrograde period coming up early next year.

Unless the FTSE makes a clear upside break from the Sun line, it will be very vulnerable to falling down into the Mercury turn, just as it did in September. And we know the US indices are also now starting to come up against these 1st Harmonic downtrend mirrors.

Germany [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)Germany - DAX

The DAX doesn’t help our analysis – because it also contains some mixed technical signals.

The positive signs are the new peaks in the CCI and the Stochastics have matched the November levels, even with lower prices … and the MACD signal is even more optimistic.

On the negative side, the height of the latest MACD histograms is less than impressive and both other indicators have made Bearish crossovers.

In short, the index remains range-trapped, with a little upside bias still developing – but not strongly enough, not assuredly enough, for us to breathe a high sign of relief and take a Long position with a reasonable degree of safety.

In short, all of the charts we’ve looked at so far suggest things are improving, we continue to see relatively unemotive behaviour as the indices try to stabilise a bottom which may turn out to be “the” bottom for an intermediate-term uptrend.

But we are not yet receiving strong signals for a buy-and-hold move. It all remains a very short-term traders’ market.

Paris [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)
Paris - CAC

The French CAC 40 made an attempted breakout higher. And that’s the key word … attempted.

Another small gap opened on Friday, but the index is in danger of sliding back down the blue diagonal downtrend from September, at least until it renews contact with the rising blue line.

All these indices are in the same boat … only a quick and certain bailout for the US car makers can turn these prices back up in the short-term, along with a reasonably positive response to the US Federal Reserve moves this coming week … and, no further really bad
news from Goldman Sachs and Morgan Stanley.

It’s beginning to look as if this Santa Claus rally is not exactly Jupiterian in its expansiveness … more like Santa on a strict diet.

Australia

ASX 200 [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing when viewing in the PDF format)ASX 200

Now, while the US and European indices last week took out their late November Highs, the ASX 200 was having none of it.

The index last week finally managed to close the number 2 gap at 3648, but it’s not what we’d call a Bullish breakout!

I said in last week’s report: “The RSI 3 is at a level from which it can produce a price bounce, but similar bounces from this little-bit-oversold level in the past few months have been very short-lived. It is only the rallies which have come from more deeply oversold levels that have lasted for several days.”

And now we’re right back at the same position. Yes, we can get another baby bounce, but we have not filled the downside gap and the index remains trapped in a weak position.

What would be potentially Bullish if the other main indices weren’t so indecisive is this …

ASX 200 Price Crossings [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)

ASX 200 Harmonics - planetary price harmonics crossings lines

On Friday, the 200 tested, and recovered from, the Mars square Uranus, Sun square Saturn planetary price crossings zone.

That would normally be a real positive, but the problem is the high price for the day was at the Mercury conjunct Pluto price crossing.
Ah, yes, dear reader … curses, expletives of an unseemly nature and continuing frustration.

While the RSI 3 indicator on the previous chart arrived back at the point from which a baby bounce is possible … and we might get a better signal from Tuesday’s Mars square Saturn … the CCI and the Stochastics warn us to be very cautious.

Friday produced a very sharp drop in both indicators, even though the price did not drop to lower Lows.

Notice that the previous week’s close was at the Mercury square Uranus/Saturn level – but produced a very short-lived rally as the RSI 3 suggested.

ASX Weekly [click for complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)

ASX 200 Weekly technical analysis chart

Note that the ASX has still not broken free from the fast downtrend on the weekly chart.

It continues to find Support at the long-term 3506 level, but is having real trouble breaking out.

None of this is good … the technical indicators have not turned so Bullishly positive that we can be certain the November Low is going to hold.

We know the rules for false break patterns … that they are always followed by a sharp move in the opposite direction. A failure to do so points to a high risk that it was not a false break, but merely a pause in the downtrend to consolidate the speed and depth of
the drop.

I don’t wish to be unduly gloomy, but we’ve had only one positive week and have not – unlike other world indices – managed to rise back into the previous price congestion zone.

Everything says we should rally … the size of the decline from last year’s Highs should mark a normal Bear bottom. But price refuses to confirm an optimistic outlook and until it does, great danger remains.

ASIA

India [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)India - Sensex

There are continuing positive signs, however, in Mumbai’s Sensex, not the least of which are the new heights scaled by all three technical indicators.

That positive divergence – positive because the new indicator peaks are coming with lower price levels – is not unconditionally endorsed by higher MACD histograms.

The Bollinger Bands have contracted strongly and the worry about that is that the first move within narrowed BB’s is usually reversed.
The blue CCI has slipped under the red, warning of potential weakness in the very shortterm, even while the higher level of the red line peak points to stronger underlying conditions.

The planets agree.

Sensex planetary lines [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)Sensex harmonic planetary price lines

The Indian index is also facing planetary price line challenges – and with the fast RSI 3 at a potential peaking zone while the slower RSI 14 dithers around the neutral 50 level.

Again, we do have some positive divergence in the indicators, as we did with the previous technical chart.

While the price of the index is lower, the RSI 3 holding at this high level, rather than slipping into immediate reverse, is a sign the Sensex does want to breakout. The RSI 14 shows a not dissimilar picture, having gone above 50, which it could not break above
during the sharp November rally.

Enlarge the chart for a better look at the Saturn/Uranian price zone the index must break above to continue the rally and make a run for the higher price levels marked on the previous chart.

Hong Kong [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)Hong Kong - Hang Seng

Technical indicators for the Hang Seng support the legitimacy of the new rally. As with the other indices, we do have warnings that short-term weakness could develop further; the faster CCI and Stochastics lines did not like Friday’s price weakness.

While price fell short of a direct challenge to the 16,000 level, the state of the indicators suggests the HSI will try again at recapturing lost ground – but probably not before a retest of 14,000.

Japan [click for chart - and the complete printable PDF report including all charts]

(Note: charts can be zoomed in for larger viewing in the PDF format)Japan - Nikkei

Japan’s Nikkei dropped down on Friday into the Sun square Saturn price zone and found a small bounce from it.

Again, the new higher peak in the RSI 3 suggests last week’s price action had some strength to it, especially with the RSI 14 peeping about the 50 mark for the first time since August.

But, both lines have dropped back below the neutral zone – and we see the same planetary line-up providing very strong resistance overhead.

Overall … we did not get volatile price action on world stock indices last week, even if the astrological energy suggested it was likely. Certainly, it wasn’t a good week for the US auto industry and there was some very volatile weather in parts of the globe.

But the chances for a fat Santa Claus rally are beginning to look slim. I wish I could give a big thumbs-up to a renewed rally after a little further weakness into Mars square Saturn.

The weekly and monthly charts indicate that’s what should occur, but this has been a year for breaking a lot of very old records – in a bad way. So, all I can suggest is be careful … and good luck. - RA

Click to download the World Week Beginning December 14, 2008 Report with all charts and comments. (PDF format)

*NOTE: Jeanne Long, professional trader and a leader in the research of financial astrology, was a student of the works of W.D. Gann. She has authored several books on financial astrology and developed the principles used in all the Galactic Investors Astrology software.  Randall's technical charts and the planetary price line charts included in this report are created using the Quick Harmonic Trader Software, by P.A.S. Astro-Soft, Inc. makers of Galactic Investor Astrology software.

The World At Large is delivered in advance to Astrological Investing Premium Member subscribers.  Randall Ashbourne is a former journalist and political strategist who trades the Australian market..

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