Saturday, June 15, 2013

The bounce in stocks ... 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 June17, 2013
Jupiter energy takes centre stage this week
 Jupiter energy takes centre stage this week, when the fires of optimism will be stoked again ... or the fear will be.

Last weekend, we reviewed where we were within the correction and I indicated Venus was making two aspects we needed to watch closely.

I said: "So, the Friday bounce could be short-lived. We need to pay close attention to price reaction on Tuesday and Wednesday when Venus opposes Pluto and squares Uranus."

That was the timing for Europe and America. The aspects were in play on Wednesday/Thursday in Asia - and most Asian indices, including Australia, produced a classic turnaround bar on Thursday and bounced strongly into the week's end.

Whether the bounce produces anything more than a blip will depend on the reaction to this week's conjunction between the Sun and Jupiter. This is a once-a-year event. Symbolically, it represents a peaking of growth energy and packs enough oomph to cause an intermediate change in trend.

It's also the week when a major Bradley Model trend turn date is due and the Sun will leave volatile Gemini for the security of Cancer. As one of the Cardinal signs, Cancer is an "action" sign ... and it is where the action is geared almost solely towards protection of all those things which make us feel secure, safe and comfortable.

We'll review the status of the correction this weekend and the Weekly Planets charts for Asian indices.

At a glance, the correction on Wall Street still seems to be too shallow, in terms of both Price and Time, to be realistic - especially considering the rapid, steep declines in most other major indices.

Yet, technically, the SP500 remains in its uptrend channel. The Venus aspects to Uranus and Pluto produced another drop to again retest the validity of the lower channel trendline. We'll be in the lunar phase between the 1Q Moon and Full Moon, which tends to be statistically negative.
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At this stage, however, Pollyanna is not only holding the rally channel in play since last November, but remains within the upper level of a long-term channel based at the 2009 Bear bottom. In other words, it's still Bullish.

The index is still rising in a sharp angle within that broader channel and the long-range Canary in the oscillator panel has not lost the upper red level which would indicate a major correction is underway.
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This has not been the case with many other stock indices, most of which entered a major correction more than a month ago. Last weekend, I indicated those indices had reached potential bounce levels. The drops continued into the Venus aspects, but the delayed bounce was exceptionally strong.

We'll use the ASX200 Weekly Planets chart I've featured a couple of times in past weeks to review the bounceback. Despite the drop into the Venus aspects, Auntie finished the week in a stronger positon than the previous week. The Big Bird has turned higher without dropping as far as the Zero line.

Experienced traders I've talked to seem wary of the bounce. Yet, the index certainly seems to have met its targets for a major correction, which is what we thought this one was shaping up to be. It overbalanced the Price drop of the similar-level correction in early 2012, but not the Time - at least not so far.

We do need to continue to be cautious and not just because of this week's Bradley data and the Sun/Jupiter conjunction. We had several weeks of sideways shuffling at the end of the last correction of this magnitude.
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However, we also need to at least weigh the prospect of what is "normal" after a drop this deep and this fast. And normal would tend to indicate a more sustained bounce to "balance" the drop.

Many of the other Asian area indices display charts very similar to that of the ASX200.

India's Nifty began its decline after failing to close above the 6175 Uranus level on its WP chart ... and with very clear divergence between the Big Bird and Price peaks when the high was made.
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Singapore failed to even reach its Uranus barrier before turning down, with a negative divergence signal in the height of the fast MACD histogram peaks.
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While Hong Kong turned south after being unable to climb above a Saturn barrier.
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The build-up in the negative divergence levels on the oscillator for Jakarta was obvious and growing strident as that index struggled to overcome a Neptune price level in the mid-5100s ... but recovered the 4745 Neptune level with last week's strong bounceback.
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While Shanghai may be in the process of finding its bounce level after recontact with a primary Saturn price line at 2150.
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Now, each weekend we go through this exercise of trawling through planetary charts while I waffle on endlessly about astrological aspects and technical conditions. And that's just here. I got involved in a lively discussion with a couple of pals at the end of the week.

Both of them are not only intelligent, experienced, regular traders, but also have some enviable technical skills. We chat online virtually every trading day, swap tips and opinions, and tell jokes. These are conversations I wouldn't want to miss and if I had to trust someone else to invest for me, I'd trust these guys to make a profit more than any professional broker I've ever met.

Late on Friday, one of them was lamenting the fact his trading account was a little deeper in red ink than the previous week and I was reminded of why I wrote The Idiot & The Moon in the first place. And it's this ... a high-level IQ and an extraordinary degree of technical competence isn't a guarantee of making regular, reliable, safe profits from trading stocks. And nor is it even vaguely uncommon for regular traders to suffer varying degrees of despondency and anguish over trading decisions that continue to fail - no matter how much time, skill and effort they put into the job.

All of that is exactly why I came up with The Idiot. The Idiot is an Ego-destroyer without peer!

The Idiot reads nothing (except price bars), watches nothing, talks about nothing.

And yet ...

Well, here's the weekly Idiot applied to Miss Pollyanna. One of us made a lot of money trading this index. And it wasn't me. Even worse is the realisation it could, and should, have been me!

I do hope you all are smarter than I am!
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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

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