Lion Tamer / Cosmic Cop
The bounceback rally on Wall Street is probably about to fail again and gold may have launched a new rally phase.
We will take a closer look at the targets for both of those in a few moments.
Also in this weekend's edition ... an update on the major European indices
Last weekend, I outlined my overview for the month ahead and provided a list of important dates. If you missed that edition, or want a refresher, you'll find it in the Archives.
The week begins with Mars squaring Saturn and Mercury moving to Libra. Midweek, Venus moves into Scorpio as the Moon makes its monthly transit of Sagittarius for a couple of days.
We almost always get wide-range moves with a Saggy Moon - up or down, depending on whether optimism or fear gets exaggerated. It could be fear, because ...
Venus is in detriment in Scorpio and will be approaching a conjunction to Saturn; Mercury in Libra suggests a lot of diplomatic talk; and Mars square to Saturn suggests the desire for heroic aggression will face increased challenges from stubborn resistance.
Astrologers call Saturn the cosmic cop. America likes to think it's the world's policeman. The two are having a face-off ... and with even the French starting to backpeddle over Syria, Saturn seems to be winning.
We will start this edition with a look at gold, which is probably now launching into a rally phase likely to run for a few weeks. It also means, unfortunately, we need to chat a little more about Elliott Wave theory.
We talked about this last weekend. Corrections within uptrends tend to mark a three-wave pattern known as an ABC correction. And uptrends tend to occur in a five-wave pattern where Waves 1, 3 and 5 are upwards and Waves 2 and 4 are ABC corrections downward.
So, gold ...
There is now some evidence to suggest, very strongly, that the big correction in gold is over, done, finished. If that is so, gold prices are now in the early stages of a new Bull run.
I normally place no real importance at all on a single day's price bar. However, on Friday, the move in gold was strong enough to greatly decrease the possibility of another dramatic slump and greatly increase the probability that the June 28 low was The Low ... for a very long time to come.
In the chart below, I have marked out what I think is now happening ... that the Wave 4 correction is probably finished and that gold has started its Wave 5 push higher. Until then, it was possible that the rise from late June was an ABC correction upwards in an ongoing Bear market ... where 1 was really an A, 2 was really a B, and 3 was C.
If you look closely, you can see that both Waves 1 and 3 subdivided into 5 individual subwaves - and Wave 5 may do the same.
If gold is now embarked on a Wave 5 rise, there are two obvious targets - 1450ish ... or potentially even 1520ish, though that one would really be pushing the envelope.
Let's view the weekly ...
One of the things that concerns me about the 1500s target is the past performance of the gold price as it rose into Sun intersections; both of which I've marked with a light blue circle. The timing for that is the few days around September 23.
However, if price can get back above the Wave 3 high, it does enter a zone where there is little planetary resistance to prevent it from reaching 1518. One word of caution though. In Elliott Wave terms, Wave 3 cannot be the smallest wave. And since this one is smaller than Wave 1, it means Wave 5 must not run longer than $161.40. That puts the 1518 target at the very outer edge of what's "allowed".
Now, also some advance warning. If what I think is probably the right pattern turns out to be so in reality, it means gold will then have finished Wave 1 of a new Bull run. In other words, it'll just be a bigger version of what we've seen so far, where the individual waves have so far subdivided into a 5 wave pattern.
And that means there will be another BIG correction ... a higher-level Wave 2 downwards. We'll keep track of this as it goes along. For the moment, the odds favour a multi-week gold rally.
Now let's turn our attention to Pollyanna, Wall Street's SP500. Last weekend, I indicated two possible options with a leaning towards a stronger bounceback. I'll update and combine those charts now into one ...
I indicated last weekend we were more likely to see a bounce into the 1658 to 1690 price range. The minimum target has now been reached. We cannot set the downside target for certain until we are sure the bounce is over. The probability still remains the 1580 to 1600 zone.
One thing ...
The correction has filled all the gaps Pollyanna made when it launched into its post-June rally - except one; at 1593. There is also an unfilled upside gap at 1684.83, but that need not be filled during this bounce because the probability is that this Bull run still has one more major rally left in it.
There are ... groan ... alternative counts. Which, as I've said, is the danger in trying to apply EW accurately in real time. The most significant alternative remains the possibility that the correction will chop about in a contracting sideways triangle, eating Time rather than Price.
Still, overall ... especially with this month's transits and the current state of the lunar phase ... I think what's probable is a rally for gold and further decline for Wall Street stocks.
In a moment, I'll update the Weekly Planets charts for some of the major European indices.
Firstly though, in quite unabashed favoritism, I'll deal with my home index - the ASX200. Australia is off to the polls this weekend for a Federal election.
London is next ...
Okay, that's enough waffle for one weekend. Take a look at gold and the charts for your favorite gold miners. Carefully consider whether your general stocks are showing topping signs.
Safe trading - RA
Astrological Investing's associate, Randall Ashbourne, author of the eBook, The Idiot and The Moon, and The Idiot and the Moon, Forecast 2013, writes a free weekly column titled, The Eye of Ra on his web site in which he explains the potential impact of astrological aspects and the current state of technical conditions. Ashbourne's charts are revealing illustrations of exactly what has occurred in the market and the probability of what to expect.
Important reading: Randall Ashbourne's The Idiot and The Moon, Forecast 2013 , Jupiter's cycle and its effects on Wall Street and a posting of the weekly Eye of Ra report in this blog, titled A look at the Venus Retrograde effect
(Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011-2013
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