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The World at Large - April 5 & 6, 2008
Astrological conditions affecting stock markets combined with technical analysis
by Randall Ashbourne

Click here for the full version of this report including technical charts in PDF format

Let’s talk a little about fear – and the length of trends.

We’ll deal first with trends from a trading perspective.  From an investing perspective, trends are easy … you just put two or three moving averages onto a chart, say a 5, 12 and 72, and so long as the 5 stays above the 12 and the 12 stays above the 72, you
relax and stay there for the long haul.

Trading requires more work.  First of all we have to decide whether the primary trend is Bullish or Bearish.  Bullish is the 5 above the 12 above the 72 – and they’ve been that way for quite a while. Bearish is the reverse.

Then there’s the secondary trend. It’s possible to have a Bearish secondary trend within an overall Bull trend – which would be the 5 sinking below the 12, but the 12 usually staying above the 72.

And it’s also possible to have a Bullish secondary trend within an overall Bear market – which would be the 5 rising above the 12, but the 12 staying below the 72.

Now, trends break down even further than this.

First of all we have first degree trends, which last from 1 to 4 days.

Then we have second degree trends.  Normally, if a trend can move past the High (or Low) of the 4th day, it will continue moving in that direction for between 9 and 14 days.

If, at the end of 14 days, prices continue moving in the same direction, we are normally looking at a cyclic movement – and they tend to run a minimum of 30 days and can move out as long as 90 days or even more without much more than a few first degree

Yes, it does require some thought. But, not a lot. If stock prices move in the same direction for more than 4 days, they are likely to continue moving in that direction for at least 9 days.

If they continue in that direction for more than 14 days, they are likely to continue in that direction for a minimum of 30 days.

This is worth noting because many indices are at that point early this week – and they have also reached key resistance levels. All of which means this … we are at the point in many indices where they are vulnerable to turning down again.

Let's take a look at New York’s S&P 500

s&p 500

This is a daily chart and I am using exponential moving averages at 5, 12 and 72.

Let’s look at this first from an investor’s point of view. Last October, this index hit a new High – quickly followed by the 5 crossing below the 12. This was a warning sign – especially using the indicators we normally use on World At Large charts.

Still, the long-term investor merely needed to prepare for a possible downturn. But, a few weeks later, there was a lower High, with only a brief cross of the 5 above the 12 – another warning sign of developing weakness.

And then both the 5 and the 12 quickly dropped below the 72. At this stage, the astute and careful investor sold everything and moved to cash. And he did not get trapped into going back in … because the 12 stayed below the 72.

The investor is still in cash – but is now starting to pay attention again. Because … for the first time since last year, the 72 has started to flatten – and prices have reached the 72-day moving average for the first time since the real plunge began.

He will wait for decisive positive crossovers from both the 5 and the 12 – and will also consult other technical indicators – and wants to see if prices turn down again this week and whether they turn down for more than 4 days.

Now, let’s deal with fear – the second most important ingredient of stock trading after greed.

We all know that since late last year Fear has been waving a much bigger stick than Greed.

Broken banks, shattered consumer confidence, talk of recession turning into depression, falling US home prices. Blah. Blah.

This is the VIX … the volatility index … a measurement of stock market fear...

volatility index - vix

We can view this index exactly as we view stock indices. Those big, red spikes show the days of huge price plunges. Prices went Down, Fear went Up!

And, as we can see, Fear has been underlined by a rising trend since last June. What’s more … it is now back at its rising trendline, as well as an important Support level!

Oh, dear! What this tells us is that we are right now at a potential inversion point – Fear could rise this week … and prices could fall.

But.   Take a closer look at the indicators we normally use for read more and view the chart, download the PDF file

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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