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The World at Large - February 16 & 17, 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 and further comments in PDF format

Breakout – or breakdown – is now imminent on all the world’s major stock indices. In the next few days, prices must break to one side or the other of the containment lines which have been pressuring them into an increasingly narrow range.

It is possible we could have as much as another week of range-trading, but that time span is getting towards the outside edge of what is likely.

If the break is to the downside, we are likely to see a retest of the January Low and it is possible we could see a marginally lower spike. If that occurs, the recovery is likely to be sudden and explosive.

If the break is to the upside, the rally will hit some rough patches, but it is likely to continue for at least 30 days and may go as long as 90.

There are valid technical and astrological reasons for believing January may have marked The Low.

The spike hit key long-term Fibonacci retracements of the entire Bull campaign. It was a once-in-a-generation panic sell-off. And as stocks began hitting the bottom, the turnover was massive – a record 7 billion shares changing hands in New York.

Important point that. Somebody was buying … buying massive numbers … which is why the candlesticks for January 22 and 23 show such long tails. Buyers came out with huge order books, which forced the indices to close those days way above the intraday lows.

Legendary US investor, Warren Buffett, whose motto has never been to buy good companies at a cheap price, but to buy great companies at a good price, had his chequebook out last week.

Reportedly, Buffett has put almost $1.6 billion into Swiss Re, the world’s biggest reinsurer; bought heavily into BNI, the number two US railroad; increased his stake in Wells Fargo to 9.4%; and also taken stronger positions in Kraft Foods and the British
drug firm, GlaxoSmithKline.

We have to be clear that what stock markets loath most is uncertainty. Once something is actually known, it can be more easily factored into the consensus thinking.

What has caused the turmoil in recent months is uncertainty – about the spread of the US sub-prime fallout, about whether the American and European economies are heading into recession and, if so, how deep and long that recession will go.

At the moment, most Western stock indices appear to be discounted down to what is virtually a worst-case scenario.

If the hard evidence continues to mount suggesting the mid-term outlook has been unduly pessimistic, markets will rebound.

And that evidence does continue to mount. Retails sales have not been as bad as many expected, bank credit to both consumers and businesses continues to hold up, regardless of TV tales of tighter lending conditions, and the Baltic Dry Index which tracks global bulk shipping rates has climbed 24% since January, pointing towards a resurgence of strength in the world economy.

And the other factor which has to be taken into account is inflation, which has climbed back above 4% globally, despite the artificial figures used by Central Banks which attempt to minimise the impact of rising food and transport costs.

In last week’s report, I showed a chart of the Dow Transports and indicated the price pattern we saw in that index’s daily chart would confirm the start of a strong rally if it were to be repeated in the industrial indices.

There is a significant turn date indicated for the first week of March. Interestingly, it is not just the astrology which points to this as an important period. Three different types of technical barometers also produce likely turning points from March 3 to 6.

Overall, we continue to see signs that the financial crisis will continue for some time and there will continue to be questions about how far its impact will spread. But, we also see signs it is not an outbreak of economic Ebola.

Pointing out the contrarian behaviour of the Transports a few weeks ago, I asked the question of whether truckies were now being paid to carry air. Now we have firm figures that global shipping rates are recovering fairly strongly.

BNI has indicated no fall-off in freight within the US – and is projecting there will not be in 2008.

And we have Berkshire Hathaway buying not millions, but billions of dollars worth of stock … and a very big chunk of it has gone into financial companies.

Neither, of course, is a guarantee that general stock prices will not suffer further. But, it certainly raises the question of whether the Oracle of Omaha would be buying quite so heavily if he believed we’ve only just completed the first downleg of a long-running new Bear market.

We will take a closer look at the technical indicators as we study the individual charts. It is, however, interesting to note that while many indicators gave new Buy signals in the early part of last week, they had reversed the call to a Sell by the end of the week.

This is often the case when Mercury is Retrograde. Computers do funny things, communications go awry, and even technical indicators can give false readings.

Astrologically

Well, that period is about to end because at 12.57 (Sydney time) on Tuesday, Mercury resumes Direct motion from a geocentric perspective.

Before that, on Monday, the Lesser Benefic, Venus, moves into Aquarius … the planet which symbolises money moves out of restrictive Capricorn and into the sign which rules stock markets and company profits.

And it’s followed the next day by Mercury going Direct. Effectively, the symbolism here is that communications regarding financial conditions and profits is about to become clearer and subject to less revision.

These are the two most important astrological indicators for the coming week, although the Full Moon at 13.32 (Sydney time) on Thursday is also a Lunar Eclipse. This should reemphasise the energies unleashed at the Solar Eclipse on February 7, when the ASX came down strongly in the couple of hours leading towards the aspect and began recovering strongly as it became exact.

This week will finish with the Sun heading towards an opposition to Saturn, to be followed on the 25th with a Mars trine to the Node, which will also re-emphasise the eclipse energy.

However, it is the first seven days of March when we should have a very clear signal of a significant market turn. On March 4, Mars changes signs to Cancer. The first degree of all four Cardinal signs is indicative of an extreme high-energy point.

A few days later, on March 7, Mars will oppose Pluto.

It is this period – March 3 to March 6 – that also throws up many technical turn indicators, ranging from Phi dates, to Fibonacci dates, to Gann dates, to cycle dates.

This could mean we should not place too much reliance on the direction of the markets until the first week of March.

Ideally, the early-March aspects will coincide with a Low because the combination of technical and astrological energies would give us a fairly clear signal of the start of a sustained and strong rally.

It would also fit the pattern … that at this stage of the American Presidential cycle, markets tend to make a strong Low in the first quarter of the year before relaunching into a significant rally phase until later in the year.

Now, let’s turn our attention to the charts...CLICK HERE TO READ MORE


Click to download the full version of this report, including charts and further comments in PDF format


The World At Large, by Randall Ashbourne 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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