Yogi, Boo Boo, or Gummy - pick a Bear!

Randall Ashbourne, an associate of Astrological Investing, posts reports and articles on his web site at  theidiotandthemoon.com   The following is the Eye of RA report for May 15, 2016 

Since January we've been chatting about a new Bear ... one which rapidly mauled 20% out of some markets, but has been more like a soft-chew gummy bear on the major Wall Street indices.
So, we'll spend some time in this edition of the Eye taking a look at just what sort of Bear we're dealing with.

And whether it's a real Bear, or a Bull that dressed up as one to play mind games with us!

In the last edition, in April, I indicated the potential negative impact of Mars going retrograde, something the planet does every couple of years, but which can be particularly dangerous when it occurs while markets are in a topping phase.

Mercury is also now a little over midway through one of its regular retrograde periods, often a time when prices change course every few days and it's difficult to get an accurate reading on what to expect next.

The Reserve Bank of Australia is the latest of the central banks to cut interest rates and there is talk it, too, is headed to the negative interest rate area.

And there's the problem ... because it makes stocks the only "growth" option.

The desperate search for yield is having different impacts on different markets. We'll begin the analysis with a look at Wall Street's main trading index, the SP500.

In the last edition, I explained the impact of Mars, the planet which symbolises drive and energy, on the price of stock indices and how the 500 (as well as other indices) rises over time very much in-step with the angle of Mars' travels through our solar system. Scroll down to April's blog if you need a refresher.

In our first chart, I'll reiterate the "drive" on a weekly chart. Looking from left-to-right, we can see that almost all of the price action since the last Bear bottom in 2009 has been contained within a rising channel between two Mars price lines placed 360 degrees apart.

There have been three downside breaks of that channel, with Pollyanna recovering each time to claw her way back inside the rising channel. The next chart shows the most recent action and narrows the Mars lines down to 90 degrees, as well as including the falling channels.

The 360 degree channel of the first chart is marked by the thicker red lines in this one and we can see how the 500 has been slowly dropping since Mars went Rx a few weeks ago. It is still trying to cling to the support that channel provides.

And while Mars tends to dictate the angle of rises and falls, it tends to be the price lines of the slower-moving outer planets which set the more horizontal levels of support and resistance. In the February 7 edition, Waiting for the dead cat to bounce, I said: "It is possible a rebound could take price all the way back to the 2080s." The index went a little above the 2087 level for a few days before being repelled by a falling, primary Mercury line (pink). In theory, the rally on Wall Street should be over, done and finished.

We'll turn now to the top two European indices ... the DAX and the FTSE. Both certainly appear to be well within the grip of a real Bear. The DAX has fallen out of a long-range Pluto/Neptune price cluster and hasn't been able to score a close inside it for the past 5 months.

Its Big Bird oscillator, the 50 CCI, is in Bear mode without even a hint of positive divergence suggesting a sustained rebound.

Instead of using planetary prices for the FTSE we'll use a couple of really simple technical lines ... the rally angle and a black horizonal line of support and resistance.

The FTSE has not closed below that black line, despite the spikes down, for many months. And that's one reason I remain more than a tad cautious about the exact nature of this Bear. The FTSE is finding support on TOP of the line, rather than consolidating below it.

And what makes me cautious is that price is not following the patttern Big Bird established during the 2007-2009 crash. Yes, this Bear also took a huge bite out of the index on its first decline ... but lately has morphed into some sort of gummy bear. Normally, when the oscillator drops but price simply goes sideways, it is a preliminary warning that the oscillator is just readying itself for another rally surge.

And I've been getting the same sense of real caution on the ASX 200. This index slumped more than 20% in 11 months from April last year and Big Bird started a death dive much the same as it did after the previous Bull peak.

But something odd is happening. Big Bird's dive has been constantly stalling, something it did not do during the crash into 2009.

We can also see it in the performance of all three Birds on the weekly chart below. The rebound hasn't been able to climb and stay above the 50% retrace level ... but the performance of the red Medium Bird and the blue Big Bird strongly suggest the index is not finished trying to do exactly that.

The only negative divergence here is in the green Fast Bird, which indicates only short-term resistance.

So, overall, my impression is that we are probably still wrapped in the claws of a very nasty and quite long-range Bear.

But, there are a few caution flags warning us not to get so certain of that as an imminent outcome ... and to be gently aware that Yogi and Boo Boo are taking time out for a picnic!

Safe trading - RA

 (Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011-2016

The Idiot and the Moon, eBook, available for purchase

Will Mars hit the brakes on stock rally?

Randall Ashbourne, an associate of Astrological Investing, posts reports and articles on his web site at  theidiotandthemoon.com   The following is this weekend's Eye of RA report: Week beginning April 10, 2016 

Stock trading is likely to become a lot more volatile in the next few weeks

In the past two editions, I outlined the price targets and potential time turns for what seemed likely to be no more than a significant dead cat bounce within a new, long-term Bear market.

Now that the probable targets have been hit, I wish to talk, just a little, about The Spooky Stuff.

Mars, the planet of drive and energy, goes retrograde next weekend until late in June. Mercury, which deals with thinking and communicating, goes retrograde on April 28 for about a month.

Long-term readers know that any trend which starts within a day of two of Mercury going Rx is likely to reverse course again about 1.5 to 2 weeks later; And that we're prone to making mistakes, so need to double-check before hitting the Buy or Sell buttons.

Mars is another matter entirely. The symbolism is simple: Mars is Drive; when the planet goes Rx, Drive slips into Reverse.

It doesn't happen every time. But. If the circumstances are in place, that slipping of the gears from Drive into Reverse can see indices backing off a cliff!

Below is a monthly chart of Pollyanna, the SP500. As I've remarked many times, Polly moves up and down within Martian channels. If we look at the Bull peaks in early 2000 and late 2007, we can see the big Mars channels which defined the overall angle of the entire Bull runs.

And we can see the same impact almost all the way through the 2009 to 2015 Bull market. Now, note those little "blips" along the lines ... they're the retrograde periods. In the two previous Bears, prices slipped out of the main rising channels ... and started to crash badly when Mars Rx came along. Those two instances are marked with the yellow ovals.

And we can see from the current price position of the index, such a danger period is now immediately ahead of us. It is not guaranteed, of course. But if it does take hold, the index tends to fall sharply down declining Mars channels, even more easily than it climbs the rising channels. You can see the impact during the two previous Bear markets.

 

In the last edition, Dead cat bounce nears its likely peak,(click or scroll down to March 13, 2016 post) I indicated that I expected the SP500 to hit a Saturn line, then priced around $2049, but that while that might signal the "price" target, it was unlikely to satisfy the "time" component. In fact, I was a tad mean with the $2049 price tag. When I shifted to a daily chart, Saturn was around $2056 by the time the daily bars hit it. After making first contact, the index backed off before aiming for a gap breakout. At this stage, still a "false" breakout ... because the index is back down to play with the primary Mars line.

Miss Polly isn't the only index driven up and down by Mars channels. Despite some positive divergence in the oscillators at the time of writing the March edition, the ASX 200 hit the lower limits of the weekly price targets I showed then ... and, instead of hanging around to fill in "time", as Polly did, it just started sliding down a primary Martian channel ... making its actual Highs and Lows very close to long-range Neptune price lines (grey on the chart below).

 That does leave the ASX more than a little vulnerable to further falls ... especially if Mars has a Bearish impact during this Rx period. You can see on the weekly planets chart below the index continues to hit those lines regularly during multi-week moves.

A drop below the blue Saturn lines, right where it finished last week, leaves a large hole to fall down.

Safe trading - RA

 (Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011-2016

The Idiot and the Moon, eBook, available for purchase

Dead cat bounce nears its likely peak

Randall Ashbourne, an associate of Astrological Investing, posts reports and articles on his web site at  theidiotandthemoon.com   The following is this weekend's Eye of RA report: Week beginning March 13, 2016 

In the last Eye of Ra, on February 7, I predicted a dead cat bounce in major stock markets was imminent.

Five weekends later, we need to go into ultra-cautious mode yet again because that bounce is probably very close to hitting its peak ... in Price, though maybe not in Time.

In the last edition, I indicated the bounce may already be underway, with the mid to late January lows marking a turning point.

That was the case in some markets, with others hanging on another few days, until February 10, to hit a final low before the bounce took off.

I also indicated it was probable that Central Banks would try desperately to stop the drop ... and we also saw that happen with the European Central Bank taking unbelievable risks with a decision to prop up corporate bonds.

This edition will be relatively short. I'll give you the all-important planetary price targets for the SP500, but use the ASX 200 as an example of why the bounce may be running out of Price, but not of Time

As usual, Wall Street has been leading the pack higher. The Pollyanna index, the SP500, ended last week only about 5% off its 2015 peak.

There is still a slim chance that we have not entered into Bear territory and that Wall Street could make new all-time Highs in the next few months. But, it is very slim.

More likely is that Pollyanna will start to roll over again, possibly around Wednesday after Jupiter trines Pluto.

The most obvious price target is $2049, a Saturn price line on the index's long-range planetary price chart. I think there is enough positive momentum in the daily, weekly and monthly charts to get Pollyanna to those levels.

In fact, it's the positive momentum, especially in weekly and monthly charts of various indices, that suggests markets are not going to hit a certain price point and then collapse and go into crash mode.

Most Bears seem to be trying to call a "top-and-crash" at every single overhead resistance level and then stand there wondering what went wrong when prices just power through that supposed resistance.

Simply, they're reading the wrong charts. Or reading the right ones wrongly.

Below is the Weekly Planets chart for the ASX 200.

It shows the 200 is about to run into heavy resistance. But the need to be wary of being overly Bearish ... here and now ... is the slow build-up of positive divergence in the Big Bird oscillator. It's distinctly possible it will need some Time to be sufficiently debased to warn of another imminent Bear leg down.

The next chart shows price is still reaching for a Fibonacci 38.2% retracement of the first downleg. It's worrying that it hasn't climbed back as far as Pollyanna, but you can see how the Fast Bird (green) and Medium Bird (red) lines mirror the Big Bird's efforts to make higher peaks at lower prices.

And if that's not sufficient to warn the Bears to be just a little cautious in growling so adamantly, take note of the higher troughs in both Fast and Medium Birds on the monthly chart below. Monthly divergence. That's not something easily wiped away ... and is why I said in the introduction to this edition, we may well be nearing the peak of the bounce in terms of Price, but not of Time.

Markets have an annoying habit of trying to fool the majority of investors.

So, that's it for this edition. We did get the strong dead cat bounce I spoke about last time. There is a slim chance it will morph into a totally-surprising final upleg of the Bull market.

I urge you to do what I always suggest:

Use the monthly and weekly charts for the long and medium range targets ... up or down. And WHEN price gets near to those targets, THEN turn your attention to daily and intraday charts for signs from the momentum of the oscillators that a trend change is starting to get really close.

Safe trading - RA

 (Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011-2016

The Idiot and the Moon, eBook, available for purchase

Waiting for the dead cat to bounce

Randall Ashbourne, an associate of Astrological Investing, posts reports and articles on his web site at  theidiotandthemoon.com   The following is this weekend's Eye of RA report: Week beginning February 7, 2016 
It is now virtually certain that all major world stock markets are in the relatively early stages of a big bad Bear.  
We discussed the probability of that in the first two reports for this year, both of which can be accessed by scrolling down.
 
There is still a chance that Central Banks will try desperately to stop the drop, but they appear to have exhausted their ammunition.

The next major rally is, given the extreme levels of technical damage, most likely to be a dead cat bounce which will provide the last chance for many traders to exit Long positions before being wiped out.

That bounce may already be underway, with the mid to late January Lows marking a turning point for a upward-leaning grind that could run into May, perhaps even early June.

Venus conjuncted Pluto and squared Uranus last week, two strongly negative aspects. This week brings a trine to Jupiter. Given both planets are "benefic" and Earth signs are involved, we could see a level of stability return.

I did promise last month to include the current position of some Asian indices; we'll do that this week, as well as taking another look at Wall Street's SP500 and the ASX 200.

 The Nasdaq took a major hit last week, with some of the big name tech stocks rolling over badly. These had been helping to hold aloft the entire American market.

Pollyanna, the SP500, has not yet, I believe, actually confirmed it is now in a Bear market. But that scenario is now leaning heavily towards the probable, rather than the possible.

Below is the 500's long-range planetary price chart. The index is still trying to hold the Pluto level in the early 1870s. It is possible a rebound could take price all the way back to the 2080s. Still, long-term history shows it finds strong levels of both support and resistance at those orange Node lines.

The Weekly Planets chart for the ASX 200 is below, with the index opening and closing last week's trading within a band between grey Neptune now at 5012 and Uranus now at 4974.

There isn't much to stop a further drop if it dives again below the blue Saturns now converging at around 4949. And any rally is likely to find barriers in the 5184 to 5249 range.

India's Nifty is playing very closely to Pluto price lines. Traders can use these lines as potential targets, keeping a very close eye on daily charts for signs of positive or negative divergence starting to show whenever these targets are approached in actual trading.

Hong Kong has already fallen off its Bullish trend line ... something which has not yet happened decisively on the SP500 or ASX 200 ... and has also completed a backtest of the line. Big Bird, the 50CCI, is gasping in the dust of the mine floor.

There is a little positive divergence in the two faster Birds, giving at least some hope for a bounce "from the obvious" level of Fibonacci support.

It's a difficult call, though, since the index is currently stalled below long-range planetary price support. You'll note that in both charts, the next layer of major support doesn't come into force until around 16,000.

Singapore is holding up a little more strongly than the Hang Seng at this stage, still just hanging onto planetary support.

We can see the alternative levels of Fibonacci support and resistance in the chart below. Fibonacci levels and planetary prices will very often be quite close to each other.

The black lines are linked to the previous Bull High and Bear Low and the red ones run from the Bear Low to last year's High, and even a quick glance will show you both sets provide a reliable guide to the likely length of rallies and declines. Again, if you're actively trading in these dangerous conditions, use these as a big picture guide and watch the daily charts like a hawk for any potential turn as the prices are approached.

If this is a major, new Bear ... and it probably is ... the biggest, nastiest, fastest section of the crash is still ahead of us.

Safe trading - RA

 (Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011-2016

The Idiot and the Moon, eBook, available for purchase

Danger ... the Bear may be underway

Randall Ashbourne, an associate of Astrological Investing, posts reports and articles on his web site at  theidiotandthemoon.com   The following is this weekend's Eye of RA report: Week beginning January 10, 2016

Last weekend I warned that the alarm bells are screaming very loudly.  (scroll down to read last weeks post,. Beware of the Bear.)

After a week of deep-diving stock markets worldwide, I will review below where we may now be in long-range Elliott Wave terms.

It is possible, Stocks would need to begin bouncing strongly and virtually immediately for that to be true.

The alternative is that virtually all major worldwide stock indices made a long-term Bull market top last year and we are already in the grip of a Bear market which could last at least another year and, if follows the "norm", will wipe out perhaps as much as 50% of your net worth. And possibly more in the Wall Street markets.

The onset of the new Bear is not yet set in concrete. However, it is only a few per cent away and as I said last weekend, it was distinctly possible even before last week's dives, that some markets, such as Australia, are already in its grip. because of major astrological  events last week, that the drop is a head fake.

We will begin this report with an updated look at the broad Elliott Wave roadmap, where Bull markets rise in 5 waves. In Forecast 2015, (still available to download) , I had drawn the red arrow on the left indicating where we were at the start of 2015.

It is possible ... but only just ... that Wall Street still has two more rallies before the current Bull is dead. If that is so, those indices are close to where I have drawn the black arrow.

However, the very real danger is that the top is in and a large-scale meltdown is already underway. If that is the case, we may already be within the early stages of a crash ... the second part of a crash which has been underway for months.

As a rough guide, my best guesstimate would place Wall Street about where the red triangle is positioned. In short, we ALL need to watch the next rally very carefully and be prepared to: Get the Hell Outa Dodge!!

We'll look this weekend at the long-range charts for the FTSE and the DAX. England has slumped back into the price zone marked by the two thin, black horizontal lines.

Its position within that zone needs to be monitored VERY closely, because the Big Bird oscillator certainly looks to be in a death dive.

If you look at what happened during the 2007-2009 Bear market on the left of the chart you have a graphic illustration of what I mean when I say we may already be in the early stages of a crash.

The monthly Idiot is now firmly in Sell mode on Germany's DAX. The blue-line Big Bird oscillator is in deep trouble and so, too, is the red-line Medium Bird, which is clearly warning that more trouble is looming. The green-line Fast Bird is showing some positive divergence, though this will not be settled until the end of the month.

Still, it is giving preliminary notification of a potential bounceback nearby.

Please note in the chart above that the Fast and Medium Bird oscillators are looking suspiciously similar to their behaviour just before the 2008 crash.

Below is the DAX's long-range planetary price chart ... and that's one big hole its price is starting to drop into.

More than at any time in the past few years ...

Safe trading - RA

 (Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011-2016

The Idiot and the Moon, eBook, available for purchase

2016 ... beware of the Bear

Randall Ashbourne, an associate of Astrological Investing, posts reports and articles on his web site at  theidiotandthemoon.com   The following is this weekend's Eye of RA report: Week beginning January 3, 2016

Best wishes to everyone for a happy and prosperous 2016, though if you're counting on stocks to provide either happiness or prosperity, you'll need to be very nimble.
2015 has ended with very few worldwide stock indices holding onto the gains they made early in the year.v

Many commentators, even the optimistic ones, expect more trouble and few gains to be made in the coming 12 months.

From a contrarian point of view, there are ... perhaps ... too many people calling an end to the Bull run and a return of the Bear; the market rarely does what the majority expect and forecast.

Still, even the best Elliott Wave analysts now believe the end of this very long-running Bull market (at least for the American indices) is only a rally or two away from starting.

It is distinctly possible that some stock markets are already in its grip. Over the next week, I will try to bring you up to date on all the major markets ... starting today with Wall Street's SP500 and Australia's ASX200.

My apologies for my prolonged absence during the past few months. I am still ill and no longer have the energy to write regular columns.

Bear markets tend to be defined in line with the percentage crash from their Highs. The Australian stock market has been one of the world's real laggards in terms of its Bull run since the last Bear terminated in 2009.

The ASX200 made a double top at $5996 last March and April. In the next 4 months, it crashed a tad more than 17.5% from the High and has made four "tests" of that crash level, with December finally making a bounce from the obvious ... contact with a rising trendline.

The Idiot remains on a monthly Sell signal. Big Bird, the 50 CCI oscillator marked with a blue line in the lower panel, has plunged below the +100 level. There remains some hope for a rally in the first part of 2016; we have a bounce from the long-range trendline, Big Bird appears to have made a Zero Line Rejection (ie: it has bounced higher from the red, dotted zero line which tends to indicate a reliable bounce) and Fast Bird, the green line, has spiked above Medium Bird (the red).

Now let's take a look at the Pollyanna index, the SP500, using the alternative Bi-BB method recommended in The Idiot & The Moon. The August mini-crash took the index down 12.5% from its High. The fast MACD remains in clear Sell mode.

Nor is Pollyanna's Big Bird singing a happy song. In the chart below, take special note of what happened to this index when that blue oscillator line plunged below the red +100 line after the two previous Bull peaks. The alarm bells are screaming. Very loudly.

Thankfully, we have some tools which can be used to help us trade these volatile markets. The ASX200, for example, has been making regular stops and reversals at two sets of Fibonacci Retracement levels ... the blue ones from the 2007 peak to 2009 low, the red ones from the strong Bull market leading into that 2007 High.

These are long-range markers and should be used to inform any short or medium term trades you may be considering. In other words, if your daily and weekly charts are starting to show oscillator or momentum weakness as the price rises into any of these Fibonacci Rx targets you need to be very careful about staying Long ... and also need to move your Loss Stops much closer to the current price action at the time.

And we also have my long-range planetary price charts which can be used effectively for price targets ... up or down. The ASX 200 is quite simple. You know from past columns and the book that it is an index with a very strong relationship to Neptune.

Those price lines are marked with both grey and orange lines on the chart below and while there are often overshoots, the reliability of using Neptune prices as targets for moves in both directions, I think is too profitable, and too regular, to be ignored. Again, use these long-range targets to inform your decisions when daily and weekly charts are showing positive or negative divergence and the strong chance of a looming trend change.

And the same is true of the SP500.

In Forecast 2015, I published a basic Elliott Wave diagram, where a Bull run is made up of 5 large waves, with (1), (3) and (5) being the major rally phases and (2) and (4) being the downtrend waves. I marked last year with a red arrow, indicating we were nearing the end of 5 intermediate waves within a long-range 3 rally and that would normally be followed by a major wave 4 correction.

That appears to have happened fairly accurately. If it remains so, we start 2016 at about where I have placed the black arrow. In short, the good times are running out of room and time.

Do NOT go to sleep at the wheel any time during 2016.

Safe trading - RA
 (Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011-2016

The Idiot and the Moon, eBook, available for purchase