Saturday, May 25, 2013

Stock decline, gold and Asian indices

Randall Ashbourne, an associate of Astrological Investing, posts a weekly market report on his web site, The following is this weekend's Eye of RA report: Week beginning May 27, 2013

Sun, Mercury, Venus and Jupiter in Gemini
Planets in Gemini - Sun,Mercury, Venus, Jupiter

There's a strong chance stock markets have gone into correction mode likely to last for several weeks.

Gold may have finished its correction after producing a slightly higher low last week.

We'll explore the astrological omens and technical conditions this weekend - and I will update the Weekly Planets charts for a range of Asian indices.

We are now in Gemini mode. The Sun, Mercury, Venus and Jupiter are all in the sign and they'll be joined by Mars at the end of this week.

Last weekend I warned the shifting of energy from stable and money-conscious Taurus into Gemini would increase volatility - and in both directions. And it took only a couple of days for the energy shift to make itself felt, with Pollyanna, the SP500, shooting to a new spike high and then fainting away in a swoon.

It's only going to get more dramatic as the red warrior drags himself from a Venusian embrace and finds himself pushed and pulled simultaneously by the Janos bi-polar energies.

Early this week, Venus conjuncts Jupiter and mid-way through June, the Sun will also meet up with the FatBoy.

I indicated last weekend, we'd take a closer look at that ... and we will in a few moments.

However, we will start this edition with a look at the ASX200 and extrapolate from that what seems now to be underway across world stock indices.

I indicated last weekend that Wall Street and the leading European indices were hitting major planetary barriers which had been set as upside targets when Forecast 2013 was published in January. Last week saw a late burst of optimism and a sudden collapse so typical of the dual Gemini energy.

Technically, it appears to be a high-level Wave 4 underway. This is the last major correction before the final rally of a Bull leg. I will use the ASX 200 Weekly Planets chart below to explain what I think is happening.

Basically, after the sudden plunge in August/October 2011, most markets launched into a strong and long-running rally phase. The first leg of that rally was quite weak in the ASX, but the overall principle remains the same.

The first major correction of the new rally lasted 5 to 8 weeks and wiped roughly 10% from prices. The next two corrections lasted for a month and were much smaller declines.

Currently, the ASX200 is down only 2 weeks - but the depth of the decline has already exceeded the previous two. In Elliott Wave analysis, there is a theory of alternation. It means that if the first similar-level correction was fast and deep, the next correction of the same level is more likely to be a longer correction which "wobbles" up and down inside a contracting triangle, but without losing the same amount of money.
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And that may be what we now have underway - a correction that could drag in terms of Time while confusing everybody about what is happening because sharp rallies suddenly fail and sudden declines turn on a dime.

I'll turn now to gold. Just before we do, though, consult the chart above for the August/October 2011 bottom. August produced a hard spike down ... the market bounced strongly ... followed by a slower decline where price traded against the spike. In the case of the ASX, the TAS function produced a marginally higher low ... whereas on the SP500 it produced a marginally lower low.

I explained in some detail last weekend how I thought this was the most likely scenario for gold - and you'll need to go into the Archives to find the gold chart with prices marked. I'll show you the detail of the spike and TAS function using the daily chart, below.
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Last weekend, I said: "For a stronger bounceback to occur, or even a complete trend change, gold needs to make either a higher low, or only a marginal new low. The higher low would come from around 1337 and a marginal new low should not go significantly below the rising, primary Sun line currently priced at 1320." 

It is possible, perhaps even probable now, that gold has found its low after hitting the 1337 price line. Caution is still needed and it is not unusual, after a TAS set-up, for the new upleg to take considerable Time to find real legs.

For those of you serious about learning some technical skills, please spend some time looking at the TAS structure on these two charts. As I indicated last weekend, it's not something which is covered in The Idiot & The Moon. However, TAS set-ups do occur regularly and once you see a large spike, learning the "normal" price behaviour which follows can provide the opportunity for very profitable trades.

Now, before we turn to the Asian indices, which I haven't published for several weeks, let's take a quick look at what has tended to happen during past instances of Venus or the Sun making their once-a-year conjunction with Jupiter.

The chart is the Pollyanna weekly; Venus conjunctions are the heavy blue bars; Sun conjunctions the red ones. Of the past 6 instances on the chart, four led to continuing, multi-week declines.

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The Venus-Jupiter conjunction takes place on Tuesday in Europe and America - just as Wall Street re-opens from the Memorial Day break.

And it's why even short-term traders need to be extra careful this time around in taking the normal Full Moon-New Moon long trade, even though this was a lunar eclipse FM. NMs are marked with red bars on the chart below, Full Moons are blue bars.
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Polly has been rising in a clear channel since the Santa Claus rally got underway late last year. A breach of the upside channel line, with negative divergence in the oscillator, puts the index under threat of a retreat to retest the lower trendline.

Okay, it's time to update some of the Asian indices - and the price targets should help guide you through the Gemini volatility likely over the next few weeks.

India's Nifty:
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Hong Kong:
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Safe trading - 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 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

The Idiot and the Moon, Forecast 2013
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