The weakness of the corrective
“rally” out of the panic lows which hit major world
stock indices in mid-July resolved itself last week as Americans
began returning to their trading desks from summer holidays.
Wall Street turnover and the number
of stocks recording new Lows hit records at the July nadir. As I’ve
stressed over the past few weeks, such a condition has always led
to a retest.
And that retest began in earnest last
week as the Sun conjuncted Saturn, reigniting the negative energy
pattern of the still-to-unfold Saturn/Uranus opposition series –
just as did the earlier aspects of Mercury, Venus and Mars conjuncting
Last Thursday’s panic plunge
– a 93% down day – did not break any records. Neither
the volume turnover, nor the number of stocks hitting new Lows,
was even close to the July wipeout.
Nor was the level of fear, as measured
by the VIX, anywhere near its July spike.
All of which is, potentially, “good”
news – at least as good as it gets with yet another American
bank forced to close its doors this weekend.
I mentioned last week the old Wall
Street mantra of “Sell in May and go away – and don’t
come back ‘til Labor Day”. Historically, September is
the worst-performing month on American stock indices – and
the downside often lasts into October, before turning
around to produce the annual “Santa Claus” rally.
Thus the second part of the mantra
– come back from summer fishing in time to go bottom fishing
for stock bargains.
This may not be the year to play the
same old game, since it is likely the Bear still has one more sharp
and sudden downleg to go – and that’s even if it’s
your normal, run-ofthe- mill Bear.
With the worldwide economic gloom
and the next phase of the financial crisis likely to see more highly-leveraged
hedge funds go bust, this is unlikely to be a standard Bear and
we could well be seeing the early stages of what I’ve referred
to as the Doomsday scenario.
But it is also not yet certain that
stock indices will not surprise and shock everyone by putting in
a massive rally before the real Bear begins its multi-year mauling.
This week begins with some very strong astrological conditions bound
to affect the immediate direction of stock indices.
Mercury and Mars are squaring Jupiter
as it goes Direct. Jupiter is trining Saturn as Pluto goes Direct.
And Mercury and Venus will both conjunct Mars – before the
Sun rounds out the week’s aspect by opposing Uranus.
There are two Bradley Model turn dates
scheduled for the month – one on Tuesday, which coincides
with all that heavy astrological stuff and another on the 20th,
which occurs as Mars is inconjuncting Uranus and is within a day
of a major Fibonacci turning point.
We’ve discussed the implications
of this over the past two or three weeks and I reported last week
that one of our regular readers, Serg, was tipping a decline into
the Jupiter/Saturn trine as a Low (just as it was in January), followed
by a rally into the
second Bradley turn … and then another drop.
Last week, I went through the historical
patterns for the timing and duration of “normal” final
downlegs in Bear markets.
CNBC has decided to run a “fun”
piece on stock market astrology and last week interviewed our doyen,
Kaye Shinker, one of the founding members of the group which launched
the serious study of financial astrology back in the 1980s.
“The market after
a New Moon is usually a buying opportunity and it will be early
tomorrow. However keep your hat on because the Moon goes void
of course at 10 and mistakes are everywhere. Wait till Monday
when Jupiter and Pluto have had a chance to turn around. Whole
new ball game.
Expect the second and
third week of September to move gradually to the upside and possibly
hitting 12,000 before Sept. 24. Mercury Retrograde should cool
enthusiasm until Oct 15. I always suggest that day traders take
a vacation during Mercury Rx. It is cheaper than being in the
Kaye also had some longer-term predictions
and comments that are worth noting:
“The New York
Stock exchange was born a Taurus, the Bull. It should have stayed
that way. However, on March 6, 2006 it became a publicly-traded
Pisces company, or a Fish. And things have been pretty fishy ever
As we move into 2009
Uranus comes ever closer to its Mercury; therefore, expect the
market to turn inside out, upside down, and backwards. Nothing
will ever be the same.”
So, let’s turn our attention
to the technical charts to see what they make of the weak corrective
rally from July – and last week’s panic plunges in many
of the major indices.
VIX – Volatility Index [click
to view the chart and download the entire Adobe PDF file]
When the markets hit bottom in July on massive volume and with a
record number of new Lows, the spike in what is commonly referred
to as the “fear index” did not reach nearly as high
as August, 2007, or the January and March bottoms of 2008.
Many commentators dismissed the VIX
as being no longer relevant. However, given the other strange contradictions
between markets which started emerging simultaneously, I disagreed
and it seemed to me to be just another part of the odd pattern which
Those contradictions have not gone
away and, at this stage, I still believe they’re occurring
because of the chance a massive rally could get underway after the
next severe plunge.
As you can see, the CCI and Stochastics
are suggesting fear should subside over the next week or so –
and last week’s VIX level was consistent with the plunge happening
on much lower volume and with far fewer stocks making new Lows.
Philadelphia Banking Index
While the various industrial indices tanked, the finance sector
did not follow thedownward plunge. Yes, yet another contradiction
to add to the growing list.....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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