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 May 13, 2013
This
weekend I'm going to depart from the normal format to discuss Jupiter's
travels through the zodiac ... and how that causes bumps and slumps in
groups of stocks.
In tech-speak, we call it "sector rotation". We've all seen it in action; investors seem to fall in love with stocks in particular groupings and they fly into the sky like Icacrus ... before their popularity fades and they tumble back down to earth.
Well, we can forecast this by watching Jupiter.
I first learned this from my old friend, the late Kaye Shinker, one of the real pioneers of research into financial astrology at a practical level.
I will explain it as simply as possible. The principle behind Jupiter symbolism is to "expand" whatever it touches. The down-to-earth meaning is that Jupiter will increase either the demand for OR
the supply of a particular product as he travels through the zodiac, spending about a year in each sign before moving onto the next one.
Products ruled by Jupiter's current sign position will tend to suffer a glut. VERY bad for stock prices in that area. Products covered by the signs Jupiter is squaring will tend to be in short supply AND high demand. Very GOOD for stock prices.
We'll see how this works in action by looking at some charts.
Now what Kaye discovered is that
The Jupiter Effect takes place while the FatBoy travels from the middle-range of one sign to the middle-range of the next.
Jupiter is now at 19 degrees of Gemini heading onto Cancer - and that means we are now starting the early stages of what should turn out to be a massive sector rotation over the coming year.
To be frank, Jupiter in a particular sign does not necessarily produce a glut. It is one of the reasons I am so constantly nagging you that astrological expectations do NOT over-ride technical conditions.
But, let me show you. Jupiter in Gemini should have had a dramatic impact on: telecommunications, media, travel, broadcasting. I am using Incredible Charts monthly data for all the charts in this weekend's edition - and we begin with the telecoms index of the ASX.
As we can see from the chart, Jupiter in Gemini prompted a very strong rally in telecom share prices over the past year.
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Now, if we had known ahead of time that there would be some sort of big move in communications, we could have fine-tuned our stock buys for the year ahead ... looking at, say, two of the Dow's biggest companies, Verizon and AT&T.
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Now, these two Dow components did not enjoy quite the same strength as the ASX telecoms index. And it wasn't a particularly good year in terms of phone wars for some electronics companies.
But, what happened to stocks from those sectors that Jupiter was squaring? Well, from Gemini, the squares were to Pisces, which rules shipping, oil, alcohol, drugs and "dreams" and to Virgo, which has rulership of health and hygiene.
Here's Chevron ... which is now making all-time highs!
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And here's what happened with perhaps the ultimate dream/fantasy/celluoid stock, Disney ...
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And here's what happened with healthcare stocks over the past year, seen through the lens of the ASX healthcare index ...
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We get some idea from these charts exactly HOW The Jupiter Effect works. Some of the Gemini-type stocks, like the phone makers, had an awful year, while there was a glut of that Gemini trait "talk", increasing the demand for telecom service providers.
But, some of the biggest winners from the past year were from the "square" areas - Pisces and Virgo. Now, a word of warning! You'll notice that the tech signals in those stocks are starting to roll over.
And that's because from where he is now, in mid-Gemini, Jupiter's travels will cause a major shift in investor thinking.
Cancer, his next sign, and taking into account Capricorn (the sign opposite Cancer), will impact: food, restaurants, farms, hotels, restaurants, building supplies, household appliances and dwellings of all kinds.
The two signs that will be "squared" are Aries and Libra. Aries is military gear, heavy machinery, iron, steel, engineering. Libra is luxury goods, copper, jewels.
So, while it might not seem like it at the moment, it is highly likely that mines and miners and heavy industrials are about to make a big comeback.
That's the astrological expectation! But, do the technical conditions support the theory?
Well, here's the ASX materials index ...
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The index may now be starting that turn. On weekly charts, firms like BHP and Rio Tinto appear to be forming a long-term bottom. The effect may also impact on firms like Caterpillar, which had a very strong rise while Jupiter was actually in Aries.
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As well as strong miners, and heavy machinery makers like Caterpillar, we should also be trawling through our lists of engineering and building companies. The ASX engineering index chart, below, is showing signs of a potential turn northwards
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However, with the Cancer symbolism starting to come into play, we also need to watch for changes in the popularity of building supply companies - like Home Depot, for example.
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And since Cancer specifically rules things like food we need to be aware there will be either a food glut OR food shortages.
Cancer rules consumer staples. But Libra is coming into "square" and Libra rules consumer
discretionary items. Here is the ASX consumer staples index ...
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And below is the ASX consumer discretionary index ...
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Please note the vastly different status of the long-range Canary on these charts ... consumer staples are showing signs of topping-out and consumer discretionary is showing marked positive divergence.
Cancer/Capricorn also rules real estate and office accommodation. Below is the ASX property trust index ...
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And below is the chart of the ASX industrials index ...
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Okay. By now you should have some grasp of what stocks you need to start considering with caution ... and which ones have the potential to rise strongly over the course of the next year.
I stress that I have only scratched the surface here! Individual stocks having strong Jupiter transits can resist the Icarus dive for a while; and "square" stocks suffering strong Saturn aspects to their first trade chart might NOT rise as strongly as some others within the sector rotation.
Again. You MUST use a technical oscillator to help determine the direction of your trades! The purpose of this weekend's edition is to get you to start thinking about the impact of a large-scale shift in investor thinking and emphasis, now starting to get underway and which will gather momentum over the next year.
You need to remember the very first rule of trading successfully - Buy Low, Sell High! It's time to go through your portfolio stocks and look to exit those sectors starting to roll over from highs ... and start identifying those which appear to have spent some time trying to lock in a solid base from which to launch an Icarus flight.
The individual stocks will vary from market to market, but the overall principle of The Jupiter Effect knows no international boundaries.
The Jupiter squares to Aries and Libra should cause price increases for things like iron ore, steel, copper, heavy machinery and military gear, as well as luxury goods and consumer discretionary items.
It MAY cause an increase in demand for real estate and/or office accommodation, rather than a glut of supply. But, exactly which of these actually manifests will depend on local conditions.
If you're using
The Idiot system properly across the three timeframes AND using one of the recommended oscillators to look for either positive or negative divergence, you should have no trouble identifying the stocks you need to be selling now ... and those showing the potential to run hard and run fast over the next year.
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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