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This is a long-term monthly chart of the 500 and I have placed a red horizontal line at a price of 788 – which is a 50% decline from last year’s High. A 50% drop from the High is, usually, a worst-case scenario for an “ordinary” Bear. It also happens to be the price of the final spike down before the index launched on its multi-year Bull rally.
Last Thursday, the index spiked down to 818. I can see why world indices are rearing to rally and even Bearish commentators are starting to call an end to this downleg. But, I remain concerned – for all the reasons outlined earlier and during last weekend’s report. The 500 is desperately trying to hold at the Neptune line which helped to form a bottom at the end of the last Bear.
However, I can’t help
but be concerned that the thick, 1st Harmonic line, to which the
index spiked down in July and October of 2002, is acting as a magnet.
Its price is around 760. I’ve put a 3 RSI indicator on this
chart, which has actually gone lower than it did in
The index is, on this indicator, massively oversold and due for an imminent turn. But, it hasn’t happened yet.
Nor do we have a Buy signal on any of our normal technical indicators.
The CCI has broken its uptrend line, though it is now trying to regain it … the Stochastics indicator has given a negative cross-over, in Bearish territory … the MACD signals continue to probe new depths.
There are a couple of reasonably positive signs in here … the faster, blue CCI line is holding the uptrend line and could bounce up from it this week. And the MACD histograms are … well, they aren’t getting worse.
We can see quite easily from this chart, and from the monthly bars on the previous chart, this last downleg has been huge and incredibly fast – and that this and other indices are desperately trying to find solid Support at these price levels.
So, a rally is not unlikely.
Let’s turn our attention to a close-up of the daily: -
First up, it’s obvious we’re still in a sideways pattern – and that we’ve now had three tests to the downside; and that the previous two tests were followed by rallies which took the 500 back to the 1000 level.
What is a tad worrying is that there appears to be a declining wedge pattern developing – and that there are no strongly divergent Bullish signs from the indicators.
A declining wedge can be quite Bearish, as the dropping trend line compresses prices into a lower and lower range. That downtrend line needs to be watched with great care for any sign of strong Resistance to a rally.
However. Technically, since we have had three tests of the downside, we should also get three tests of upside horizontal Resistance – and, so far, we’ve had only two.
The Bearish analyst I mentioned earlier believes this sideways
pattern has terminated; that the top on election day was the end
of an Elliott Wave 4; and that the drop into last Thursday’s
spike Low was a truncated Wave 5 – thus ending this devastating
VIX – Volatility Index [click for complete printable PDF report including all charts]
And he may well be right.
But if this were a stock chart, one would seriously be considering a Buy … it has broken above the downtrend lines in all the indicators; the CCI signal lines are in the right order with the blue on top of the red and both of them rising above the Zero line.
The Stochastics are rising to Bullish territory with room to go higher; the MACD histograms have been shrinking progressively and the MACD signal looks as if it’s about to make a positive cross-over.
Except this isn’t a stock – it’s the fear gauge.
Nasdaq Composite [click for complete printable PDF report including all charts]
Last weekend, the indicators for the Nasdaq were looking quite positive and I marked with an asterisk a small upside gap at 1679.
However, as well as the concerns for downside I noted with the
changed political situation, I also made the comment there was an
early-warning sign of weakness, in that the short-term blue CCI
dropped deeper, despite the higher prices, than it did on October
No-one got to take advantage of the price gap because the Nasdaq opened just above that level on Monday and the weakness evident in the CCI displayed itself in the subsequent price action.
We now have the reverse situation – a slightly higher blue CCI trough, even with a big price drop. I’ve taken a parallel of the previous downtrend line and applied it – and that’s what the Nasdaq now must break above if it’s to rally, at least into the New Moon.
Adding to at least the possibility of a rally from here, is this: -
Nasdaq & Neptune [click for complete printable PDF report including all charts]
These are heliocentric Neptune lines. They’re not significantly different from geocentric lines … they just move in straight lines, rather than curvy waves, since nothing goes Retrograde when viewed from the Sun.
Now, while this is primarily a Uranian index, it’s pretty easy to see the Neptune planetary lines have restrained rallies and provided support during downturns for many years.
And the good news is that with last Thursday’s spike to a new Low, the Nasdaq has already bounced from a line that just might be the final stopping point for this Bear leg.
It also happen to be a precise price point for a Uranus configuration which can be used for plotting the range of medium-term movements in the Nasdaq.
I’m not sure of the implications of this if there is further downside into mid-December. Except, that if the Nasdaq holds again at this price level, even if the 500 goes a little lower, it would provide the intermarket Bullish divergence we could be more certain would prompt a strong and lasting rally into the first few months of 2009.
The ASX closed at new Lows for this Bear trend last week – and the fast RSI 3 has not yet reached a level where we can be certain of a turnaround in price.
There is no technical Support level in here until 3556, the August, 2004, price levels, which are not far above the Highs recorded in 2001 and 2002 – at 3506.
A full 50% drop from last year’s High, a legitimate Bear target, is even lower – at 3425. With the fast RSI and the MACD both looking decidedly pessimistic, it would be a brave trader who took a large Long position at this price level and expected to hold it for a multi-month rally.
Nor do the planetary price charts confirm a certain bottom has yet been reached.
ASX 200 & Neptune [click for complete printable PDF report including all charts]
The potential for further downside is also shown by the closing price break below key Neptune price lines.
The ASX tried desperately to hold the line at a 1st Harmonic Neptune mirror.
Now, this is either a “false break” to the downside – and false breaks are always followed by a fast move in the opposite direction – or something else is afoot.
Note that the Neptune mirror (dotted line) which stalled the 2002 Highs is now at a lower price level. That is … while the technical support is at 3506, the planetary line which defined that High is now lower, at a price below 3400.
The real worry here is that the index broke out from a 1st Harmonic Neptune and topped out at 1st Harmonic Neptune. Unless it can regain solid Support at the 1st Harmonic Mirror, around 4000, there is a danger of sliding all the way back to 3250.
The CCI is trying to turn at this level and the RSI 3 has gone deeper than at the bottom of the previous Bear and also shows signs of wanting to turn. Clearly, this is deeply oversold – but with no real guarantee that it cannot get more so before it’s done.
ASX 200 & Saturn [click for complete printable PDF report including all charts]
Now, while Neptune is a good guide to big movements, we need to consult Saturn for confirmation.
We have the red horizontal at the 3500-ish mark – and that’s at a level where the next Saturn stop also comes into play. It’s interesting that this particular Saturn line was also in play at the bottom in 2003, where it crossed with a 1st Harmonic Mirror.
If it were to be reached by mid-December, this Saturn line is suggesting a bounce from 3450-ish.
And the state of the RSI 3 suggests it’s a target we may see. Note that during the Bull run, this fast version of the RSI regularly snapped back from the 20 level. In fact, it barely broke that line on the downside during the entire Bull market.
However, the August, 2007, spike Low reintroduced the old Bearish targets for this indicator – and it is not currently at a level which produced the previous rallies since August last year.
ASX 200 Venus & Pluto [click for chart - and the complete printable PDF report including all charts]
As well as the technical levels and Neptune/Saturn lower price lines which look as if they’re going to be hit before this Bear finishes mauling the market, this chart also worries me.
I indicated last week if
we were to get a bounce from the Venus/Pluto price crossing at 3895,
it would suggest the trend change indicated by the Full Moon would
be up. The Low for the day was at 3892 and the index did bounce.
Normally, such an exact hit and
And yet … a massive collapse below it the following day. These failures of planetary price crossings are quite rare.
If this is a false break – and that does sometimes happen – the recovery should be strong and swift. Yet, Friday’s price action – an inside day which pushed higher only to collapse again – warns the ASX simply doesn’t believe the optimism suggested by the other indices.
I’ll make the point again … if this is a true “false break” to the downside, it should now be followed by a fast rally and we would expect that rally to hold to the blue-line angle which we’ve extracted from previous rallies.
And we would not expect the rally to meet any real resistance until at least the potential downtrend angle I’ve extracted from the previous one.
Both the RSI 3 and 14 have dropped off their uptrend lines, although the 3 has now turned back up from a level which has accompanied short rallies in the past few months.
The downside gap which did exist at 3805 was filled and exceeded in Thursday’s big plunge – leaving a gap higher at 3892. I indicated last week a gap at 4144 would be filled last Monday and it was closed out with an intraday spike.
worldwide, we have markets which want to rally, anticipating the
last bite of this Bear may already have arrived. I’d love
to believe it. It may be true. But, until I see it happening before
my eyes with every single planetary chart and every single technical
indicator singing the same song in at least broad harmony …
I remain deeply sceptical and openly suspicious. Good
*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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