Stock markets worldwide
remain dangerous even for very short-term traders for as long as
the mob mentality rules.
As I sit in Bangkok on Saturday afternoon
beginning to write this report, this is the principal headline on
the US Yahoo Finance site:
“Fallout from financial crisis
hammers housing”
The cause of the chaos has suddenly
transformed into its victim. We’ve moved from the fallout
of the housing crisis hammering the financial system to its exact
opposite.
In fact, neither is really accurate.
The cause of the current crisis was simply a series of failures
of common sense and sound management; failures now displaying themselves
in the behaviour of stock indices.
Last weekend, I listed the good, bad
and worse news and in defining the bad, said:
“There is a third scenario,
which is really only a nuance of the primary themes – and
it is that Wall Street found a bottom in Friday’s erratic
trading, but it will produce a bounceback rally of only first or
second degree.
If that is the case, the rally will
fail by this coming Thursday, or by October 28th, and there will
be another freefall.”
The problem with finding a “bottom”
on the Friday was that it was not perfect timing. Had the American
indices acted in a sound, common sense manner, last Monday would
have been spent testing and probing Friday’s bottom.
That would have been reassuring because
it would have set New York up for a cyclical rally lasting a minimum
of 30 days and probably at least 45. But Wall Street wanted instant
gratification. Chicken Little’s feather suit was thrown aside
and Pollyanna’s party frock was back in vogue as the S&P
500 surged 12% in a day.
It left the index extremely vulnerable
to another sudden freefall. Which didn’t take long to arrive
as the Street shifted again from drag queen back to drama queen.
We could be back in Pollyanna mode this week – but it may
be almost as short-lived.
On the astrological level, significant
aspects are still unfolding over the next two months which suggest
continuing volatility; and on the technical level, the whole zone
is littered with significant turn dates and Fibonacci clusters.
They are not the “reasons”
for the turmoil, merely signposts.
So, let’s review the signposts
to see if we can get a workable roadmap.
We’ll turn first to the Bradley
Model turn dates. There were two in rapid succession in September
– the 9th and the 20th. The first was a non-event, a very
temporary down day.
The second occurred on a Saturday
and the previous day, the 19th, marked the last significant High
before this freefall started.
The next Bradley turn date does not
arrive until December 14th.
In early September that date seemed
too far away to mark a potential bottom turning point in the Bear.
With everything that has happened
since, however, we need to consider it again; this Bear is breaking
historical standards on an almost daily basis.
In the discussion we had about Bear
markets a couple of weeks ago, I pointed out the normal behaviour
of markets coming back to retest the Low a couple of months after
the initial “bottom” was recorded.
At this stage, with the damage that
has been inflicted, it seems unlikely that indices will be able
to better their September high points before December – especially
with major “translations” of the highly-negative Saturn-Uranus
Opposition happening all the way into early December.
That Opposition becomes exact on US
election day, but receives another huge boost of energy in the first
two weeks of December when the Sun, Mercury and Mars set up a Tsquare
formation.
The final near-term hit of the Saturn-Uranus
Opposition coincides with the Bradley Model date, when Mars squares
Saturn.
The possibility is then that the Bradley
date will be significant – and that it may coincide with either
a new Low, or a retest of the October 10 “bottom” …
or whatever new bottom is recorded in the meantime.
If that is the case, the wild swings
are going to continue.
In terms of significant Fibonacci
dates, one is due this week – on Thursday – and another
is due on November 20th. But there are other Fibonacci clusters
between those periods – for the first three days of next week
(when Mars sextiles Jupiter and we get a New Moon in Scorpio), and
again around November 10th.
This weekend, Venus moves into Sagittarius,
a sign which is less destructive and more optimistic than Scorpio;
it’s also a sign prone to exaggeration, so the indication
is we may see more mad Pollyanna days.
The other significant piece of astrological
trivia is that Mercury is Direct again. The last time that happened,
in June, stock markets resumed their freefall.
UNITED STATES
Volatility Index [chart]click
to view this chart and download the entire PDF file.
Technical indicators
are continuing to show negative divergence from the panic readings
being recorded by the VIX, which measures the level of fear among
traders.
Both the VIX, whose data goes back
only to 1990, and its predecessor, the VXO, whose data goes back
to 1986, are at record highs.
While the extreme readings combined
with indicator divergence suggest the mood of
utter despair should ease up, the sheer size of the VIX bars over
the past week paint an
uncertain picture.
The mood swings of the market are
likely to continue – and as we review the patterns on
the charts of the indices in the following pages, we’ll see
the danger signals.
Dow Jones Industrials
[chart] click
to view this chart and download the entire PDF file.
All three technical indicators suggest
there is plenty of room for more upside.
But the price chart itself is sending
a different message – a contradiction likely to be resolved
this week.
The long red horizontal is the minimum
to which prices should rise. The blue downtrend diagonal is the
minimum level that prices have to trade above before we have any
real hope that the Bear is waning.
Now, while it would be unrealistic
to expect the DJI to get back to the long horizontal level in one,
unbroken rally, the fact that it tried and failed, leaving a “space”,
has left it vulnerable.
The price now appears to be tracing
out a small pennant – and that is bearish, leaving open a
real possibility this downleg has not completed. There is a band
of Support in the 7000/7300 range – 7181 being the bottom
of the previous Bear in October, 2002.
CLICK
HERE to view the rest of the charts - The S&P 500, Nasdaq Composite;
European charts, London, Paris, Germany; Asian
charts, India, Japan, China – Hong Kong; Australian
ASX 200 - 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.
***
Please
help support our site by using our bookshop for all your Amazon.com
shopping needs!
All of the written material
and graphics are copyrighted by AstrologicalInvesting.com and Randall
Ashbourne. Unless otherwise noted, written material and graphics
may not be reproduced without written permission. This includes
but is not limited to any current articles or archives on Astrological
Investing's web site on financial astrology, how to start an investment
club, technical analysis, business astrology, or stock market investing
©2007, 2008 |
