Friday, January 24, 2014

Retrogrades will cause confusion

Randall Ashbourne, an associate of Astrological Investing, posts a weekly market report on his web site, theidiotandthemoon.com The following is this weekend's Eye of RA report: Week beginning January 27, 2014
Predicting the intermediate future of markets is likely to be challenging for the first few months of 2014.

Venus, Mercury and Mars have a series of Retrogrades which will have traders, policy makers and politicians constantly changing direction.

We can all go nuts trying to work out what's happening. Or simply follow The Idiot.

A few weeks ago, all of the "experts" were certain 2014 was set to be another bumper year for stock markets. In the past few days, they've started to become a lot more uncertain.

After Friday's ugly slump, some are now worried it's the start of The Big One. Ho hum. It is, of course, possible; just not probable.

Venus goes back into Direct motion again next Friday, on the same day Jupiter opposes Pluto. The following week, Mercury will go Retrograde. And when it goes Direct, Mars will (appear to) go backwards.

The probability is that there will be a series of sharp moves and reversals throughout the first few months of the year.

Traders will need to stay nimble and not get married to any particular notion of what the markets "should" be doing.

Last weekend we took a broad look at the potential for a big turnaround in gold this year, examining the technical condition of the XAU, the Philadelphia gold and silver index, and three of the world's biggest gold miners. Their condition has only improved since.

Those of you who already have Forecast 2014 will realise that the price of gold itself hit a key Pluto target during Friday's trading ... and will also know all the other price levels likely to be of major importance throughout the year.

And the Forecast also contains the important planetary price levels for most of the world's leading stock indices.

I stress again that we cannot yet be certain that gold has made its final price Low. As I said last weekend, what we have is "a bounce from the obvious" and that bounces from the "obvious" - in gold's case, an apparent double-bottom - are sometimes relatively short-lived.

It is also "obvious" from the weekly chart below, that gold has a lot of work to do yet before we can be sure the correction from the 2011 peak is finished and that the metal is launching into a new Bull phase.

Gold made its double-bottom low on December 31 ... a second price Low that arrived with very significant positive divergence in our Big Bird oscillator, indicating strong potential for an intermediate-term bounceback.

While price on Friday ran into Pluto price resistance, it seems still to have more room to move higher before it starts running into the technical barriers.

The technical conditions in the gold weekly chart are pretty much the reverse of the SP500's chart. The build-up of negative divergence in Pollyanna's Big Bird was a long one.

As price climbed a channel, Big Bird made its last decent peak way back in May, 2013. In short, it's a build-up of divergence that won't be undone by a few days of price drops. However ugly.


But just as gold has a lot of work to do to overcome its technical barriers to launch into a new Bull phase, Miss Polly has lots of support levels which have to fail before we can declare a Bear.

So, let's not get caught-up in the talkfest. It certainly appears as if stocks have been too overbought for too long and may be entering a correction which is long overdue.

And gold and gold stocks are bouncing strongly, having become much too oversold. Nevertheless, the attempts to manipulate gold continue and danger remains in becoming too Bullish too soon.

According to reports this weekend, the US Federal Reserve managed to repatriate only 5 tonnes of Germany's gold last year. This from the hundreds of tonnes the Bundesbank is supposed to have stored in New York and at Fort Knox ... and which the Germans demanded last year be shifted out of those facilities and back to Germany.

So far, everyone is remarkably silent about exactly why it'll take 7 years to give Germany back what it owns. The Bundesbank makes a few polite noises about "logistical" problems. *Gag*Cough*Splutter*Guffaw*

I don't wish to be uncharitable or provocative, but history is history. And the Germans have a certain talent for being able to organise the mass movement of ... things. I am, of course, talking about Mercedes and BMWs and Miele machines. What did you think I was talking about?!

Anyway, I think we can all agree that if the Germans really wanted to shift several hundred tonnes of anything, they'd be able to do it with their usual precision and efficiency.

Just how long the world will swallow this story about the Bundesbank being unable to organise a few trucks, planes and a ship or two remains to be seen.

And that, perhaps, is the biggest danger. Because if it actually gets proved that the US Federal Reserve stole and sold the gold reserves in Fort Knox and New York, believing they could manipulate paper markets to buy it back cheaper, we are going to see a world financial crisis unlike anything ever seen before.

And speaking of track records ... the US Federal Reserve has no history of theft, bubble creation and causing massive worldwide financial meltdowns. Gag*Cough*Splutter*Guffaw*

But, but ... none of this concerns us. We are mere minnows in a pool of predators. So, we do need to be aware that the boys with the biggest bank account would appear to have a need to get their hands on a LOT of physical gold at the cheapest price they can get it. And that means there are likely to be more sudden billion-dollar raids on the gold price.

And it also means they didn't spend this amount of money - $85 billion a month - driving up the stock markets month-after-month to unload all their overpriced crud onto the gullible in one bad Friday on Wall Street. It's most unlikely they've dumped everything they need to dump yet.

On another topic, I receive fairly regular requests from readers to "link" on social media sites, which then want me to join and create a profile. It's not something I have the time for, or any inclination to do.

Safe trading - RA

(scroll down to view previous editions of The Eye of Ra)

Randall Ashbourne
Astrological Investing's associate, Randall Ashbourne, author of the eBook, The Idiot and The Moon, and The Idiot and the Moon, Forecast 2014, 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 2014
(Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011-2014

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