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

Gold rally, Euro indices & Wall Street 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 Sept. 9, 2013

Lion Tamer / Cosmic Cop

Last week's trading has provided some clarity on a couple of important fronts.

The bounceback rally on Wall Street is probably about to fail again and gold may have launched a new rally phase.

We will take a closer look at the targets for both of those in a few moments.

Also in this weekend's edition ... an update on the major European indices

Last weekend, I outlined my overview for the month ahead and provided a list of important dates. If you missed that edition, or want a refresher, you'll find it in the Archives.

The week begins with Mars squaring Saturn and Mercury moving to Libra. Midweek, Venus moves into Scorpio as the Moon makes its monthly transit of Sagittarius for a couple of days.

We almost always get wide-range moves with a Saggy Moon - up or down, depending on whether optimism or fear gets exaggerated. It could be fear, because ...

Venus is in detriment in Scorpio and will be approaching a conjunction to Saturn; Mercury in Libra suggests a lot of diplomatic talk; and Mars square to Saturn suggests the desire for heroic aggression will face increased challenges from stubborn resistance.

Astrologers call Saturn the cosmic cop. America likes to think it's the world's policeman. The two are having a face-off ... and with even the French starting to backpeddle over Syria, Saturn seems to be winning.

We will start this edition with a look at gold, which is probably now launching into a rally phase likely to run for a few weeks. It also means, unfortunately, we need to chat a little more about Elliott Wave theory.

We talked about this last weekend. Corrections within uptrends tend to mark a three-wave pattern known as an ABC correction. And uptrends tend to occur in a five-wave pattern where Waves 1, 3 and 5 are upwards and Waves 2 and 4 are ABC corrections downward.

So, gold ...

There is now some evidence to suggest, very strongly, that the big correction in gold is over, done, finished. If that is so, gold prices are now in the early stages of a new Bull run.

I normally place no real importance at all on a single day's price bar. However, on Friday, the move in gold was strong enough to greatly decrease the possibility of another dramatic slump and greatly increase the probability that the June 28 low was The Low ... for a very long time to come.

In the chart below, I have marked out what I think is now happening ... that the Wave 4 correction is probably finished and that gold has started its Wave 5 push higher. Until then, it was possible that the rise from late June was an ABC correction upwards in an ongoing Bear market ... where 1 was really an A, 2 was really a B, and 3 was C.

If you look closely, you can see that both Waves 1 and 3 subdivided into 5 individual subwaves - and Wave 5 may do the same.

If gold is now embarked on a Wave 5 rise, there are two obvious targets - 1450ish ... or potentially even 1520ish, though that one would really be pushing the envelope.

Let's view the weekly ...

One of the things that concerns me about the 1500s target is the past performance of the gold price as it rose into Sun intersections; both of which I've marked with a light blue circle. The timing for that is the few days around September 23.

However, if price can get back above the Wave 3 high, it does enter a zone where there is little planetary resistance to prevent it from reaching 1518. One word of caution though. In Elliott Wave terms, Wave 3 cannot be the smallest wave. And since this one is smaller than Wave 1, it means Wave 5 must not run longer than $161.40. That puts the 1518 target at the very outer edge of what's "allowed".

Now, also some advance warning. If what I think is probably the right pattern turns out to be so in reality, it means gold will then have finished Wave 1 of a new Bull run. In other words, it'll just be a bigger version of what we've seen so far, where the individual waves have so far subdivided into a 5 wave pattern.

And that means there will be another BIG correction ... a higher-level Wave 2 downwards. We'll keep track of this as it goes along. For the moment, the odds favour a multi-week gold rally.

Now let's turn our attention to Pollyanna, Wall Street's SP500. Last weekend, I indicated two possible options with a leaning towards a stronger bounceback. I'll update and combine those charts now into one ...

I indicated last weekend we were more likely to see a bounce into the 1658 to 1690 price range. The minimum target has now been reached. We cannot set the downside target for certain until we are sure the bounce is over. The probability still remains the 1580 to 1600 zone.

One thing ...

The correction has filled all the gaps Pollyanna made when it launched into its post-June rally - except one; at 1593. There is also an unfilled upside gap at 1684.83, but that need not be filled during this bounce because the probability is that this Bull run still has one more major rally left in it.

There are ... groan ... alternative counts. Which, as I've said, is the danger in trying to apply EW accurately in real time. The most significant alternative remains the possibility that the correction will chop about in a contracting sideways triangle, eating Time rather than Price.

Still, overall ... especially with this month's transits and the current state of the lunar phase ... I think what's probable is a rally for gold and further decline for Wall Street stocks.

In a moment, I'll update the Weekly Planets charts for some of the major European indices.

Firstly though, in quite unabashed favoritism, I'll deal with my home index - the ASX200. Australia is off to the polls this weekend for a Federal election.

London is next ...

Holland ..

France ...

Germany ...

Okay, that's enough waffle for one weekend. Take a look at gold and the charts for your favorite gold miners. Carefully consider whether your general stocks are showing topping signs.

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

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