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.The World At Large
Week beginning December 7, 2008
by Randall Ashbourne

Astrological conditions affecting stock markets combined with technical analysis

Click here for a printable version of Week beginning December 7 report including all QHT planetarty line charts and technical charts in PDF format.

Stock indices are likely to see a spike in volatility this week as the Sun and Mars square off in a Fire fight with the Saturn/Uranus opposition.

For the second successive Friday, Wall Street rallied strongly into the week’s close. On one level that was reassuring – considering the rise coincided with Mercury T-squaring the Saturn/Uranus opposition, the Sun was moving to an exact conjunction with Mars,
and the fact it shrugged off another round of even worse employment numbers.

What is not reassuring is that the previous week’s late rally collapsed somewhat spectacularly when markets opened last Monday. In fact, all of last week’s price action on Wall Street has the stench of manipulation.

We are still in the process of forming a solid bottom and the safest medium-term outcome would be to see markets declining and making a successful retest of the late November Lows.

That may be what occurs … with the end of this coming week being the middle zone of the Sun/Mars square Saturn/Uranus aspects, Mercury moving into Capricorn, and a Full Moon in Gemini reinforcing the transiting T-square by turning the whole configuration
into a Grand square.

Given that it’s the Sun and Mars conjunct in Sagittarius sparking the Fire fight it’s an extreme of astrological energy approaching Big Bang velocity as we come to the end of this week.

The worst outcome would be if markets rose into the aspects … as Wall Street did in November’s pre-election rally as Venus started the T-square series just as the Saturn/Uranus opposition was becoming exact for the first of a long-running, five-hit soap opera.

Given the depth and speed of the collapse from election day, it’s a worrying thought about how much worse a Sun-Mars collaboration could be, in comparison with a relatively-benign Venus square.

Sun/Mars conjunctions are heavily-involved in medium-term trend changes in stock markets – which is why it would be nice to see this one help confirm “the” bottom so that a major bounceback in stock indices could get underway.

It would give considerable technical assistance to a planetary price line picture which is, potentially, a big worry.

Let’s take a look …

S&P 500 planet 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 Planetary Lines

Now, here’s the thing … the 500 peaked out exactly at the Venus square Saturn/Uranus aspects, which sent the index into freefall, following a 1st Harmonic Venus “mirror” line downtrend for over two weeks.

We know from the World reports over the past couple of weeks that it bounced upwards from a very long-term and major Neptune price line. The bounce was strong, but technical; lacking a planetary price line to attach itself to, price has moved sideways.

From this week, price has a choice … it can attach itself to the 4th Harmonic Mercury uptrend line, but that then runs an extreme risk of peaking out in the price range of 986 to 1012 where the 1st Harmonic Sun and Mars make a price crossing with the same Saturn/Uranus lines which provoked the Venus downturn.

Alternatively, further weakness into the end of the week which brings prices down into the 788/814 range, could provide astrological strength for the next rally to break through the 1st Harmonic “mirror” lines.

We can see that scenario would also be the ideal technical set-up, in that it would produce a retest which was successful by establishing a slightly higher Low.

S&P 500 Weekly Neptune price 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 Weekly Neptune price lines

Having made a marginal break of, and recovery from, the 1st Harmonic Neptune “mirror” which was also in play at the bottom of the previous Bear, the index is oscillating around the next higher level of Neptune price support.

The circled “B” is the minimum level we should reasonably expect from a medium-term rally – and since the bounce is from a 1st Harmonic “mirror”, it would not be unreasonable to expect the rally to recover all the way to the next 1st Harmonic mirror, or a price level of 1120.

It would take a substantial rally to rise to either the “B” price zone, or the Sun/Mars Tsquare zone (986 to 1012) by the end of this week … a rally which would fall into the too much/too fast category and leave the index extremely vulnerable to another big spike
down.

At the moment, markets are indecisive – a fact easily seen by looking at the flat-lining performance of the ASX 200 or the Nikkei last week. They’re wondering if a sufficient price discount has already been factored in to account for all the bad news still to come.

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

Technically, the charts point to precisely that picture.

All indicators are on Buy signals, although the faster, blue CCI line is actually below the red, showing potential for short-term weakness even while more medium-term strength is building.

Price retreated below the downtrend line from September, but then recovered to a level of horizontal Support/Resistance which pushed prices back above the Bear line.

Price also bounced strongly on Friday after a dip down to retest the Monday/Tuesday Lows.

It looks as if the rally wants to go further. But, the indecision is clear from the fact that four days of “rally” mode have failed to make up Monday’s one-day plunge.

In short, it has struggled for four days to recapture the ground lost on Monday.

And a “struggle” upwards can easily lead to a sudden, sharp reversal in the direction of the primary trend, which is still down.

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

Nor are the indicators on the weekly chart yet decisively mid-term Bullish.

Enlarging the chart for a close-up view would make it clear that last week was an inside week, with some testing of the downside.

That, too, is further evidence that markets are still seriously weighing the options for a medium-term rally.

There is an emerging view that on a PE basis, 500 stocks are “cheap” – and a contrary view that, historically, they need to collapse from a 12 to 15 PE down to below 10 before they become a real bargain buy.

In truth, I doubt anyone really knows the current level of the actual PE of 500 stocks because they’re massively distorted on an index-wide basis by the dire position of the banks, the insurance companies, the finance arms and the auto manufacturers.

The historical basis for judging the “end” of a Bear, based on index PE ratios, is also suspect because of a fundamental shift in the past couple of decades – away from paying out a high ratio of profits in dividends and towards “growth” in share prices to take
advantage of changes to capital gains taxes.

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, remains near record levels – and I did warn many weeks ago that we could expect it to remain at high levels for at least a couple of months if we were in the process of trying to find a solid bottom.

The overall direction of our tech indicators is promising.

However, until this chart comes down to below 30 – and preferably below 20 – and stays there, we will continue to see sharp swings up and down.

Markets remain a short-term traders’ playground – and only for those who are very nimble and willing to change their outlook on an almost daily basis.

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

A decisive week ahead for the DJI, too, which has a pattern very similar to the 500 – price poking its head above the downtrend line, with Buy signals, or divergence, in all indicators pointing to further rally.

The next line of horizontal Resistance is just above 9300.

There is an alternative to a rise all the way back to the “B” price zone illustrated on the 500’s Neptune lines chart … one which allows for another day or two of rally, followed by a drop into the Sun/Mars price zone.

Let’s turn our attention to that on a planetary price line chart for the DJI …

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

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

Firstly, we notice that since “the” bottom on November 21, there has been constant contact with the light blue Saturn line as price moved sideways, looking for a planetary price line to run up.

It now has one … 4th Harmonic Mercury. On Monday, the relevant price level for that line is close to 8330.

A “kiss” of that line, followed by rising prices, would indicate the DJI has found at least some temporary wings to attach to its sandals.

By Tuesday, or Wednesday, price could be nudging the next level of technical Resistance around 9300, maybe as high as 9500. That would also bring price into contact with the 1st Harmonic Mercury “mirror”, a stronger planetary influence, providing the downward
drive towards the Sun/Mars interaction with Saturn/Uranus.

Sun square Saturn, on the downside, is at 8418; Mars square Uranus, at the end of the week, is around 7890. Hitting at least one these, on the day the aspect is exact, and bouncing up would give us some confidence that “the” bottom is in and a medium-term
bounceback rally is underway. A wild, Pollyanna ride higher to 9864/10110 in the same time frame would be a strong indication to grab the cash and run!

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)


The Nasdaq chart is also giving us relatively strong technical signals that it has the potential to go higher.

Both CCI lines have pushed above the Zero line and the Stochastics are pushing into Bullish territory.

If we check back to the DJI chart on the previous page, where I’ve included the fast RSI 3 indicator, it confirms the potential for another two or three days of rally before it reaches very short-term overbought territory.

But these are all “potentials” and the state of the VIX warns us that no-one can be certain of exactly what will happen.

A reminder that the Sun and Mars conjunct in Sagittarius is extreme high energy – and that while Sagittarius can be excessively optimistic, it can also spark a big move in a more pessimistic direction.

In short, any move, in either direction, is prone to be “exaggerated”.

This week will be only for the quick and nimble!

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

I am now going to indulge my personal foible.

Obviously, the ASX is more than a tad dismissive of Wall Street’s “rally”. There has been no challenging of the upside here.

This is an index showing an abundance of caution about where things go next. It is a sign of real weakness that Wednesday and Thursday could not close the little gap which opened between Monday and Tuesday.

But, nor has it closed the lower gap.

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.

Another reason for caution is that this index isn’t even close to getting back inside the previous congestion zone – or of challenging the downtrend line.

ASX 200 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

At this stage, the weekly chart is showing consolidation of the last leg down and has yet to give a surefire Buy signal.

As we can see, it is not yet confident enough to challenge the fast downtrend line – and all of this leaves it vulnerable to another retest of the November Lows.

However, if it can carry out that retest without resuming the fast trend down, another week or two of trading would put it in a position of breaking free of the fast downtrend line and give it room to climb back to at least the 4000 level, and possibly the 4400 zone, before encountering further serious Resistance.

Commodity prices do have a major impact on the ASX, home to two of the world’s biggest miners, BHP-Billiton and Rio Tinto. The miners are oversold because judgement is being made on a silly basis. Spot prices have little impact on established miners
because they sign long-term supply contracts at relatively reasonable prices.

It’s like oil. The spike to $147 was ridiculous, but so is talk of prices collapsing to $25. Saudi Arabia, which probably has the best brains in the oil business, predicates its annual budget on a reasonably steady level of $45 for oil. Similarly with BHP and Rio … their long-term plans – and profits – are based around price levels sustainable over a long
period and locked-in to long-term contracts.

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

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

ASX 200 Neptune Lines

Let’s check where we are in terms of the Neptune price markers which are so consistent in this index.

Obviously, at the moment, it is the Saturn/Uranus configuration (light blue and yellow) which have the index constrained … and it’s that precise configuration being triggered by aspects from Mercury, the Sun and Mars.

So, the next 7 trading days, up to Mars square Saturn next week, will be decisive for this index, too.

On the downside, the Grand square configuration coming up with Sun/Mars, Saturn/Uranus and the Full Moon, is at the level of last week’s close. On the upside, the configuration comes into play at last week’s High mark.

Remember that these planetary price crossings only have effect if they are hit on the exact day of the aspect … and a closing price through the crossing point, is usually a strong sign price will continue moving in the direction of the cross-through.

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 is also indecisive. It has made a clear break of the downtrend line – but is also struggling to rally.

Looking at the bigger picture, concentrating on the horizontal pattern, rather than the FTSE’s impeccable behaviour within the downtrend channels, we see the index has been in a relatively narrow-range consolidation since the price plunge in October.

It’s a longish consolidation. We suspect, because of the astrological conditions centred around the Saturn/Uranus opposition, that it represents the most negative energy we will see for a while … and is, therefore, a basing action in preparation for a major bounceback
rally.

But we do need to remain open to the threat that is simply consolidation of the downtrend – before resuming that downtrend.

The next seven days should make it clear.

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 CAC 40 has still to break above the downtrend line.

We can see it, too, is more than a touch cautious about where Wall Street is heading next.

And we also see, from the triangle pattern that’s forming that this is another index which will make up its mind within the next 7 trading days.

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

Ditto with the DAX … upward moves are being slapped down. And to be honest, they’re not terribly strong rallies.

The tech indicators are pointing to potentially stronger internal conditions than the actual prices suggest.

But we do not yet have uniformly certain readings which would allow us to take even a multi-day position, let alone multi-week, or multi-month.

What we do know is that if the DAX can actually hold prices at around the 4100 level as we traverse this coming period of negative astrological energy, the next rally will break Resistance at 4700, followed by a challenge to 5400 … and a potential run as high as
6500.

Readers trading either the FTSE or the DAX should consult the Neptune price line chart for the ASX 200, since all three indices travel in the same general price range. A close look at that chart will give the price levels at which the Sun/Mars aspects to Saturn/Uranus could have an impact on those two European indices.

ASIA
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

 

The Nikkei also went into flatline after last week’s initial drop.

It needs to hold Support at 7500, or at least not break below 7000 for more than an intraday spike.

Recovery above 8500 too fast would face serious Resistance at 9500.

But, if the Nikkei can hold in the 7500 range over the next 7 days, a recovery rally has a much stronger change of breaking out from 9500 and heading back to much higher levels.

China
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

Money is beginning to flow back into the Chinese markets, particularly the Hang Seng.

The money flow is actually stronger than the narrow-range price consolidation would suggest – and that’s reflected in the improving outlook of the technical indicators on this chart.

Price itself could drop to the uptrend line without inflicting major damage on the technical indicators.

Current consolidation is around 14,000 – with Support at 12,000 and the first line of Resistance at 15,000.

Respect of Support around 12,000 over the next week or so would indicate the next challenge of 15,000 will break through for a run back up to 20,000.

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

Mumbai’s Sensex is holding up – and the CCI is holding its uptrend line.

But, while the technical indicators show a positive outlook, the narrow consolidation at a low price level is a warning the downtrend could resume.

Another week or so of trading that does not break 8000 and recovers to above 8500 would give an ideal set-up for a multi-week, or multi-month rally.

Yes, as with all the other indices, it could well be “a sucker’s rally” within an ongoing Bear. But, it should be a very tradeable rally with a significant percentage move higher.

But, we do need to be sure it’s actually underway. I expressed the opinion many weeks ago now that history suggested it would take 2 to 4 months for a bottom to form and that the extreme number of stocks making new Lows would see the price “bottoms” of
the indices retested.

And I suggested the likely timeframe was into mid-December. We have arrived. Within the next 7 to 8 trading days, the charts should give us the answer.

Take great care with this volatile Sun/Mars energy … and good luck. RA

Click to download the World Week Beginning December 7, 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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