A few have broken out already and we're not near the forecast top of 42C yet.
And despite the heat, I need to leave the windows open as I write this weekend's report ... so I can hear the district fire alarm if it starts wailing.
I can hear the helicopters and water bombers battling the fires not far away. So, I won't be waffling on at inordinate length in this edition.
Okay, last weekend we touched on the topic of Mercury Retrograde and how, often, a trend starts very close to the Rx date and continues until midway through the cycle when it reverses course. And that might be what we now have.
There are also some other astrological aspects coming into play this week. On Tuesday, New York time, the Sun will square Saturn and Venus will be parallel (similar to a conjunction).
At the end of the week, we have the Full Moon, with the Sun making a trine to Mars, and on the following day, the Sun will conjunct Neptune.
Sounds exciting, but it probably won't be.
The strongest aspects - Sun square Saturn and Sun conjunct Neptune - don't have any sort of reliable track record for turning markets. In the chart below, the squares are marked with red bars and the conjunctions with Neptune are marked by blue bars.
All rather dull, really.
So, let's begin this weekend with a return to the main theme from last weekend when I talked about applying the techniques from The Technical Section of The Idiot &The Moon to Bi-BB charts.
If you haven't read it, it's in the Archives. Basically, we had arrived at a situation where the extreme tightening of the Bollinger Bands provoked a strong reaction, which then stalled as price broke the bands.
And I said: "However, the breaking of the band then caused a stall in the (down)trend. Polly didn't go much of anywhere all week long. So, two of the significant "rules" have been met and the only one remaining is ... is the first move in the wrong direction?"
I indicated it "could take a few days" to answer the question. We now appear to have the answer. Monday plunged and broke the bands again ... which prompted another stall ... and then the SP500 launched strongly higher.
So, it's certainly possible that the first move WAS in the wrong direction.
However, I've also been indicating that the series of retrogrades involving Venus, Mercury and Mars are likely to jerk markets around in the first few months of the year.
And it's rarely a good idea to rely on sustained moves of any kind while Mercury is Retrograde. Still, it took the SP500 14 days to drop and by Friday's close, only 3 days to recover just over half the decline.
If this is a first-degree countertrend in an ongoing downtrend, it'll fail in the first couple of days of this week and is unlikely to close above 1825.
There are a couple of specific price levels to watch IF the Sun-Saturn square is going to have an impact. These must be touched within $3 on Tuesday/Wednesday or they're very likely to be completely irrelevant.
A decisive close above 1836 would suggest Polly is off with the pixies again ... a close below 1763 would strongly suggest Pollyanna is morphing into Chicken Little again.
I suspect both price levels just won't be touched when they're relevant.
More interesting is that, long-range, Polly's Bull rally is now in a zone where the uptrend support from rising primary Sun/Mercury/Venus price lines is running into downtrend pressure from falling primary lines involving the same planets.
On the chart below the Sun is light green, Mercury is pink and Venus is dark green. They are primary lines; that is, they're set at the maximum 360 degree width and they intersect with each other only once a year.
And tend, always, to have an impact!
In addition to the fast-moving planets, there are some Outer Planet primaries also very important in this current game ... the grey Neptune around 1825, two Uranus lines at 1809 and 1790, and a Pluto down at 1722.
So, for the moment the 500 is holding to the uptrend primaries ... and is playing, apparently, by the technical rules we apply to squeezed Bollinger Bands.
1. Tightening bands warn of a very fast move
2. A break of the outer bands stalls the move or forces a countertrend
3. The first move is usually in the wrong direction
But, we are in a Merc Rx phase and technical signals are prone to sudden failure. Ray Merriman always says of Merc Rx periods: "Take profits too soon."
It's not at all bad advice.
And now you have a fairly good idea of the precise price levels where you just might want to grab those profits!
Safe trading - RA
(scroll down to view previous editions of The Eye of Ra)
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