For some time now, quite famed astrologers have been speculating on the potential for war to erupt ... or, at least, police to be sent into the streets to crush open rebellion.
Not in Libya or Syria, by the way ... but down on Main Street, USA.
Astrologically, it's going to be a busy period ... kicking off with a Taurean Full Moon, a Venus T-square to the ongoing Uranus/Pluto aspect, Mercury going Retrograde on America's election day, and then a Solar Eclipse New Moon in Scorpio.
It's the Mercury Rx signature on election day, along with Neptune going Direct, that prompts some of the most dire of the predictions.
The two suggest, at a minimum, confusion surrounding the official vote count; and, at the worst, a protracted delay while the courts rule on claim and counter-claim regarding allegations of widespread voting fraud.
And a lot of astrologers get unduly worried when the sign of Scorpio rises to prominence, as it will with the Solar Eclipse New Moon.
I received a missive during the week from a very famed financial astrologer, whose October newsletter contains the following warning:
NOV 6 = Mercury once more goes into Retrograde motion 6-26 = If markets have not crashed by now, they will here!
NOV 13-14 = The Solar Eclipse is semi-square Pluto = Coercion, use of force, possible War.
Oh, dear! Does this mean Santa isn't coming to Wall Street this year?
Let's begin. The week kicks off with a Full Moon, statistically a near-term low point in public mood and the stock markets. Later in the week, Venus will oppose Uranus and square Pluto, which suggests the "value" of things ... the money supply ... is at odds with both the stock market itself and the whole issue of debt and taxes.
Then we have Mercury going backwards (a geocentric illusion) on election day. We have discussed a number of times the overall signature of Merc Rx ... there is a general tendency for markets to start moving in one direction before reversing course halfway through the Rx period. It doesn't work every time, but it is a statistical tendency.
And then we have the Solar Eclipse New Moon. I've tried to deal before with the assertion from some astrologers than an eclipse WILL move markets. It ain't necessarily so!!
The chart below is a weekly for the SP500 with the red bars showing the weeks in which a Solar Eclipse occurred. Sometimes, they occur near tops, sometimes they occur near bottoms ... and a lot of times, they don't do jack!
Now, it is true that if there is some problem with the American election counting and result, the impact on Wall Street could be quite dramatic. And there is potential for that problem to be compounded by "the fiscal cliff" ... the tax changes due to come into effect next year unless the legislature can organise a quick fix.
The problem is that any quick fix generated during a Mercury Rx period usually requires a re-fix later.
November is also the time when "seasonality" tends to come into play. The downturns of October reverse direction as the annual Santa Claus rally kicks in and carries markets higher into late December or early January.
In today's wired world, you should probably know "there's an app for that". Rudy Dumas, who wrote the Introduction to Elliott Waves (available under Guest Articles on theidiotandthemoon.com web site, sent me a screenshot of his latest iPad app during the week.
I mentioned a couple of editions ago, the overall tendency of American markets to rise during the 4th Quarter of American Presidential election years. The Odds Trader Seasonal app gives details of how the annual Santa rally has performed in recent times.
In the past 20 years, October and November have been down months 7 times - less than half the time. December has been a down month only 4 times - less than a quarter of the time.
So, the statistical odds do tend to favour the start of a Santa rally; let's have a look at the current state of the technical conditions.
We begin by looking at Pollyanna, the SP500, and its recovery rally following last year's August-October collapse. I only want you to "eyeball" the chart above. The index has been rising, relatively routinely, within a rising pitchfork. The September price peak made an attempt to regain the top half of the fork, but failed and has now dropped to a calculated Fibonacci band within the lower portion of the fork. Note the performance of those red Fibonacci levels during the previous corrections within the rally.
Now, let's take a closer look at the same chart.
Price is trying to hold the highest of the three red levels. If that Support level fails, the middle level seems to be stronger, judging from its previous performance. Most of you will be aware from previous editions that 1410-ish is an important long-range planetary price level for this index ... and it's still holding.
If it fails, we can expect the Bulls to put up a fight around 1390 ... and again around 1370.
As we've discussed over the past couple of weekends, the weakest major index at the moment is the Nasdaq 100, the NDX. It, too, has now reached an important support level ... in terms of its Weekly Planets chart.
And we can see why it's important for the NDX to try to hold here ... because there's a damn big hole for the index to fall into if it loses the support of that orange Uranus line.
Apart from the seasonality factor (and the potential to put in a near-term low around the Full Moon), there is a potential rally signal in London's FTSE index.
You might remember that we used one of these FTSE charts a few months ago to get early notice of a probable rally. I pointed out the index had a habit of attaching itself to rising Sun lines ... and there's a chance it'll happen again this week. Last Monday, the FTSE fell off the influence of a rising Mercury (pink) and stayed attached to a falling Mars line (red, dashed).
There's a strong band of horizontal support from Saturn, Neptune and Node lines just below Friday's low ... as well as the potential pick-up from the rising green Sun line.
I want to look next at the ASX200 which, until last week, was in a spurt. We had a look at these charts recently, expecting she'd make a run for some Fibonacci Rx levels. And she did.
Below is a closer view of that same chart, so you can more easily see the price levels which are important ... and, frankly, just bloody obvious.
I published Weekly Planets charts last weekend for a range of indices and the prices marked on those will still be valid within a few points, so you can do an eyeball of where current prices for your favorite index stand within those charts.
What is probably more important at the moment is to try to find some sense of balance. Yes, the danger is certainly increasing. It's not all that often that astrologers jot down notes like "war" and "crash here" on their to-do lists.
But, what is possible is not usually what is probable. Some fairly severe technical damage has been done to the oscillators on charts of the main American indices and lower prices in the week ahead wouldn't surprise me. But we do need to be aware of what is "normal" for this time of year.
I've attempted, with the charts above, to show what we might call "line in the sand" values which could bring about reversals ... and there are long-range and weekly planets charts in the recent Archives.
Just remember that markets will be volatile over the next couple of weeks ... and regardless of which direction you're trading, it'll be more important than ever to have a fairly rigid stop loss strategy in place.
Safe trading - RA
Important reading: Randall Ashbourne's article, 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 - 2011-2012
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