Reviewing the correction & Asian indices

Randall Ashbourne, an associate of Astrological Investing, posts a weekly market report on his web site, theidiotandthemoon.com The following is this weekend's Eye of RA report: Week beginning September 2, 2013

Big Bird - the 50CCI oscillator - remains distinctly unhappy.

And now we enter September which has been, on average, the worst month for Wall Street since the 1950s.

In a few moments we'll look at a couple of options for where we probably are within the correction. At this stage, I'm still assuming that it is a major correction and not the first leg down of a new Bear.

Before we get to the charts, though, let me outline the astrological weather for the month ... and the most likely dates for trend changes.

The most critical dates for the month I expect to be September 6 and 20.  In Forecast 2013, I said this about the month:

"September has the potential to bring relief from the volatility, though it probably won’t occur until the second half of the month.

While August looks to be a high-stress month, the September transits hold more promise, beginning with the Venus trine to Neptune as the month hits the halfway point.

Both Mars trine Uranus and Venus conjunct Saturn have a spotty record for turning markets during sustained trends, but can produce significant highs or lows during those periods the oscillators have moved into overbought or oversold readings.

The Venus trine to Jupiter has a more reliable record and tends to produce more highs than lows. It will be important here to watch the strength and direction of any market moves leading into the date, since the aspect can mark a turning point."

Well, August has been a high-stress month ... for most markets. The most important aspects for September involve Venus and Mars aspecting Jupiter, Saturn and Uranus.

Sep 01     SUN trine Pluto
Sep 05     New Moon
Sep 09     MARS square SATURN
Sep 14     Venus trine Neptune
Sep 15     Mercury square Pluto, MARS trine URANUS
Sep 16     Mercury trine Uranus
Sep 19     Full Moon, VENUS conjunct SATURN
Sep 20     Mercury square Jupiter, Pluto Direct
Sep 27     Venus trine Jupiter


I indicated last weekend I thought the Wall Street indices had entered what I stressed was a temporary bounceback mode. And it was very temporary, which suggests a stronger bounce might now have started.

I really don't want to delve too deeply into Elliott Wave analysis. But the basics are that corrections tend to trace 3 distinct waves, referred to as an ABC ... where A is down, B is up and C is a downwave which completes the pullback. The difficulty in real time analysis is that each of these waves can break down into their own abc patterns - and since an A wave can be made up of 3 or 5 waves, it's often hard to know exactly where it has finished.

So, we'll take a look at the two most probable options.

In our first chart this weekend, we'll assume that the A wave down did not complete until last Wednesday - making it a 5-wave A, rather than a 3-wave affair which finished on Wednesday of the previous week.

In the next chart, we will look at the alternative scenario ... that the A wave down finished on August 21, that there was a B bounce into last Monday's high, and that the index has been in a C wave down since that high.

If this is the case, there are some loose rules which provide a guide. The minimum "normal" distance for a C wave is a Fibonacci 618 extension of the A wave. More normal still is that C will equal A - giving a target around 1600 for the end of the correction.

There are occasions where C runs longer and/or deeper than the A wave - which gives two targets in the upper 1500s.

We will know the second scenario is in play if there is a close this week below last Wednesday's low.

There are, unfortunately, other scenarios, too. And that's the problem with Elliott Wave analysis in real time, rather than in retrospect.

With hindsight, it's the perfect theory. In practise, it can be extremely difficult at particular times.

Overall, I have little doubt the correction is not finished. Last weekend, I showed the Dow Jones Industrials to illustrate why; this weekend, we get the same sort of reading from the 500's weekly channel chart.

Big Bird - the 50CCI oscillator - remains distinctly unhappy. As with the Dow, the 500's oscillator is making a deeper plunge than it did during the June correction, indicating the potential for this downturn to go at least as deeply as it did in June.

Now, that's "potential", not a guarantee. As I said last weekend, let's not get married to the idea, but continue to watch the charts for clues ... and especially the direction of the index going into the dates marked with a yellow highlight on the list above.

Having largely neglected the rest of the world for the past couple of weeks, it's time to restore some international balance.

AUSTRALIA:

Company reporting season has been a relatively benign time for the ASX200. Apart from some individual stock performances, the market isn't stretching itself in rally mode - but nor has it been battered by big declines.

The index continues to move between two important Weekly Planet levels ... major Saturn acting as a downside floor and a lesser Neptune/Saturn zone providing an upside cap to the range. Big Bird is not at all happy and unless the index can breakout above the Neptune/Saturn "ceiling", the danger of an extremely negative Head&Shoulders pattern remains.

However, "predicting" the immediate future of the ASX is made more difficult by the imminent Federal election. To some extent, the index is already pricing in a conservative victory. That doesn't necessarily mean it'll be a case of "buy the rumour, sell the news", though an upset win by the incumbents would probably cause turmoil.

INDIA:

While many of the Western indices have been holding up reasonably well, several of the Asian markets have been taking a Bear-like hammering - including India's Nifty and Sensex indices.

Long tails on the last two weekly bars indicates buyer support is re-emerging at the 5280s Uranus and 5100s Neptune levels on the Nifty's Weekly Planets chart. It's probably an example of the potential facing indices like the ASX200, if it doesn't overcome the Head&Shoulders pattern very quickly.

INDONESIA:

Jakarta may also have hit bounce levels. The oscillator has plunged very deeply, indicating more trouble ahead.

MALAYSIA:

At this stage, Kuala Lumpur is not in the same state as some other parts of the region. The index gapped to new highs earlier in the year when the ruling party beat off a very strong challenge from opposition groups in the national elections.

The price action over the past couple of weeks has simply closed the gap and there are no clearcut alarm bells from the oscillator to suggest Malaysia is in Bear mode.

SINGAPORE:

The Straits Times Index has probably seen the worst of its drop. This is an example of the ABC style of correction I was talking about earlier ... the A wave plunge, the B bounce, and the index now getting close to completing what should be the C wave.

So far, the C wave has stalled at the level where it is 61.8% of the length of the A wave drop. It may be over, but probably not.

HONG KONG:

The Hang Seng seems to be in a stronger position in the near-term. However, for the moment we still have lower Highs and deeper Lows - so an abundance of caution remains necessary. You can see the decline from the February peak into the June lows appears to be an ABC 3 wave pattern.

But. Arghhhh! There is the possibility that it's not a complete ABC correction, but merely an abc correction which completes a 3-wave A ... and the index is topping out its B bounce.

Yes, yes, yes! It IS confusing ... and complicated ... and fraught with difficulty. This is why you and I don't talk about Elliott Waves very often!

And why I introduced the three-timeframe Idiot system so that we don't have to drive ourselves nuts with this stuff!

Next weekend, I'll try to look at the European indices again and bring those charts up-to-date for you.

Until then ...
Safe trading - RA

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  Sale price 1/2 off!

• Major trend change dates for the full year, plus a month-by-month breakdown of high-energy trading dates and critical reversal dates.

• An index-by-index analysis of Moon Trading across major American, European, Asian and Australian stock indices-

• Identifies the major indices where following the phases of the Moon can dramatically cut profits, or even result in large losses.

• Old Gods & Gold ... a Eureka! discovery about exactly what drives gold prices during rallies and corrections and charts showing highly-reliable target levels to both the upside and downside.

These price charts are individually-tailored to each index and cover Wall Street, Australia, Canada, Hong Kong, Singapore, Shanghai, India, England, Germany and France.

You will not see these charts anywhere else on the Internet!

And much more...

It is NEVER too late in the year to have this monthly information!
Sale Price $10.00

Imminent danger of another fast drop

Randall Ashbourne, an associate of Astrological Investing, posts a weekly market report on his web site, theidiotandthemoon.com The following is this weekend's Eye of RA report: Week beginning July 29, 2013

The alarm bells are now ringing continuously, and at full volume ... warning that stock markets are on the verge of another sharp decline.

For the moment, it is unlikely the Bull run has reached its final High. But that peak may be less than 5% away from Friday's closing price on Pollyanna - Wall Street's SP500 index.

Some markets may already have entered another correction mode; it could be delayed another few days for Wall Street.

Even if that is the case, however, Miss Polly is probably less than 2% away from an intermediate peak.

In plain-speak ... there is probably very little upside left for either the completion of this upleg OR the 5-year Bull run which has been underway since 2009.

We will spend most of this edition looking closely at the state of the SP500, as the proxy for the major world indices; and at the ASX200, as a proxy for the resource-heavy markets.

And we are in the middle of an astrological high-energy zone, with 5 major planetary aspects now in play ... Sun square Saturn and Mars opposed Pluto this weekend, Venus trine Pluto and Mars square Uranus occurring mid-week, and Sun trine Uranus next weekend.

A little more about the potential impact of those as we go through some charts

In recent weeks I've been using various charts to illustrate some lessons in positive and negative divergence, from The Technical Section of The Idiot & The Moon.

And we'll continue that this weekend, starting with Pollyanna's daily chart. While Price has gone higher, our favorite oscillator, the Big Bird, has been singing increasingly out of tune.

It's a warning the 500 may already have reached the top of its bounce from the low of its recent multi-week correction. I'm not convinced that is the case, but I'll deal with the details of that a little later.

What is much worse than daily Big Bird starting to screech, is that weekly Big Bird, in the chart below, is falling off its perch - warning that the next correction is likely to fall through the rising trendline which has underpinned the rise from last year.

However, in the long-range monthly chart below there are still only preliminary, early-warning signs that the Bull is fading, but probably not yet terminally ill.

Note that in the run-up to the 2007 peaks, Big Bird's peaks also rose - right up until the topping "process" which took place from May to October of that year, when the Bird started to diverge significantly. And it is now starting to give similar signals.

So, while the short-term and intermediate-range signals are now starting to screech horribly, and there is now considerably increased danger of another major correction starting, it is still too early to be calling the final top of the Bull with a high degree of certainty.

Those of you holding Long positions in American indices, or in stocks which tend to follow the indices, do need to have an escape plan on standby to protect your profits and your capital.

In part, because the final peak may be less than 5% higher than Friday's close. And the downside, even for a multi-week correction, is higher.

Most of you have been with me now long enough to understand my Weekly Planets and Long Range Planets charts for various indices. Below is a variation on Pollyanna's long-range. These are major planetary Support/Resistance levels for the index and I use daily bars, rather than the normal monthly candles, so that their importance to the price action becomes even more obvious.

It is possible, perhaps even probable, that the 500 still has enough spurt left for another brief upleg before we hit the danger period of the August/September timeframe - traditionally the two weakest months of the year for the American indices.

But, the maximum reach for the final minor wave up in this rising leg is probably only 1.6% away. The peak of the entire post-2009 rally may be only 4.7% away.

There are three obvious target zones for another downside correction - and we're talking only about an intermediate-length correction, not a full-on resumption of Bear mode.

Now, I spent a little time last weekend trying to explain why it is that astrologers sometimes get in wrong trying to time a market turn in conjunction with major planetary aspects. And it is simply that to be certain of a turn, the Price of an index or stock MUST meet exactly with the Time and price level of the aspect.

The chart below shows all the important levels for the 5 aspects I mentioned near the start of this edition. Note that Friday's bar for the 500 dropped down to where the falling, dashed green line intersects the dashed, light blue line. This is the exact Time/Price crossing point for the Sun square Saturn aspect happening this weekend.

While the Time is not exact because the aspect is happening while the market is closed, we can see there was a reaction - a strong bounce. There is a planetary resistance cluster around 1700 - a cluster the index could not get through last week. If it does, there's a zone relatively free of resistance until 1720ish. And that one is more than a cluster; it's an important long-range level from the earlier chart.

Now, while it is possible that Pollyanna and other indices have already entered another correction mode, there are a couple of reasons I'm not utterly convinced ... even though there is no question daily and weekly Big Birds are very, very unhappy with current prices.

And it's simply that the "odds" are against it. For a start, it's the final week of the month and that's normally positive.

In terms of The Moods of The Moon, we now enter the 3Q-NM phase, which is statistically positive.

To the left is one of the illustrations from Forecast 2013, detailing exactly how Pollyanna behaved during The Moods of The Moon throughout 2012.

Only four of the 3Q-NM periods last year were negative - and none of them occurred during this part of the year.

So ...

A Friday candle which went down to the exact Sun/Saturn crossing price, but bounced back - apparently rejecting the level.

The traditionally positive period that occurs regularly at the end of a month into the first days of the next month.

We are in the rising lunar phase between Full Moon and New Moon, specifically the 7 days from three-quarter Moon to New Moon, which tends to be positive in the middle of the year - even though that is the weak "season" for stock prices.

For these reasons, I tend to think the bounceback is not quite done.

I could be wrong, of course. It wouldn't be the first time and it won't be the last. Still, I'm inclined to go with what I think the odds are. Even so, I doubt there is very much upside - short-term, or now even long-term.

So, that's where I think we are with the SP500 and how it behaves will affect most Western indices, especially the Europeans.

Now let's take a look at my home index, the ASX200, which might also be a guide to markets like Canada and Brazil. Here, we see a potential problem. While Polly on Friday went down into Sun/Saturn and bounced, Auntie on Friday stuck her head above the level, but closed below it.

Again I caution that this was not a PRECISE meeting of Time and Price because the astrological aspect did not become exact until after Friday. But, it is another klaxon going off loudly. In the chart below, the oscillator is the 20CCI - a medium-range Bird. And it ain't happy!

We also need to be aware that the 5050 price is an important Weekly Planet level for the ASX200 and was one of our primary targets for a bounceback once the recent correction ended. Again, the oscillator used in the chart below is the medium Bird. And it's NOT unhappy.

So we do have some contradiction evident between the two charts. If the index does manage to overcome the 5050 barrier in the next few days, there are no aspect price crossing points in reasonable range; only the important Neptune level in the 5140s. If the index drops, we would need to watch the reaction closely if it goes into the Sun-Uranus price crossing in the 4920s next weekend.

In terms of months ahead, rather than the next few weeks, I would make the same comment I made about Pollyanna. I do not, at this stage, hear major alarm bells starting to become strident. In the chart below the oscillator is Big Bird ... and he is only just starting to display potential divergence.

The last price peak saw Big Bird confirm its validity. It's the next price peak we have to worry about. The Support/Resistance levels on the chart below are purely technical. Yes, they'll be very close to Fibonacci or planetary levels. It's just an example of how we can know important price levels well in advance just by anchoring a few horizontal lines at levels which have been important in the past.

The boxed numbers are the amounts the index lost during the three biggest corrections since the last Bear collapse ended.

And I would repeat the point I made about Pollyanna. Again, one of  The Moods of The Moon tables from Forecast 2013.

While Miss Polly had four negative 3Q-NM phases last year, the Auntie had only three.

None in this part of the year.

So, while Auntie's behaviour in failing to break above the Sun square Saturn price crossing level on Friday is a cause for some concern, I am not convinced even this small upleg is quite finished.

The statistical odds are against it ... and there is no obvious screeching from the weekly or monthly Birds.

Even so, Auntie is a Neptunian index and if it does break out northwards early this week, the 5148 level is only 2% away.

I think then it's reasonably clear that even if the buoyant phase of the monthly lunar cycle plays out statistically, there is not a huge amount of near-term upside left on the table.

Especially, given the shrillness of the alarm bells now going off in the daily and weekly charts for the SP500.

Next weekend ... some more targets for The Top in a few more of the major stock indices.

Safe trading - RA

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  Sale price 1/2 off!

• Major trend change dates for the full year, plus a month-by-month breakdown of high-energy trading dates and critical reversal dates.

• An index-by-index analysis of Moon Trading across major American, European, Asian and Australian stock indices-

• Identifies the major indices where following the phases of the Moon can dramatically cut profits, or even result in large losses.

• Old Gods & Gold ... a Eureka! discovery about exactly what drives gold prices during rallies and corrections and charts showing highly-reliable target levels to both the upside and downside.

These price charts are individually-tailored to each index and cover Wall Street, Australia, Canada, Hong Kong, Singapore, Shanghai, India, England, Germany and France.

You will not see these charts anywhere else on the Internet!

And much more...

It is NEVER too late in the year to have this monthly information!
Sale Price $10.00