Mission accomplished ... at least so far!
Week beginning October 31, 2011
We have arrived at the point where I could be wrong - and I will go into the details shortly.
The Pollyanna index, Wall Street's SP500, gushed her way to 1292.66 on Thursday, just inside the upper range I identified last weekend as the potential target zone for this rally to face its first hurdle.
The Pollyanna index, Wall Street's SP500, gushed her way to 1292.66 on Thursday, just inside the upper range I identified last weekend as the potential target zone for this rally to face its first hurdle.
Warm regards .. and Safe trading - RA
(Disclaimer: This article is not advice or a recommendation to trade stocks; it is merely educational material.)
Copyright: Randall Ashbourne - 2011
For months now, markets have been closely following the roadmap I outlined in August as the "probable" pattern in play.
This weekend's edition of The Eye of Ra will, once again, spend some time dealing with the astrological weather conditions - what I call "the spooky stuff" - as well as the technical conditions. Because both of them have some bearing on what happens next.
In the October 10th edition, I displayed a calendar of the astrological transits for the month, indicating a likely rally into late last week, saying:
"Apart from the Sun's conjunction to Saturn, the strongest aspect in the list is the late October Jupiter trine to Pluto. The symbolism of that aspect in the current conditions is that a favourable solution will be found to "big debt" and tax issues.
So, according to my interpretation of les Spookies, the symbolism suggests a hiccup in the coming week followed by a growing optimism that a solution is coming to all the nasty stuff surrounding banks, debts and taxes. It won't be real and it probably won't last - because there are other, more negative transits in play over the longer term."
The interpretation proved accurate - Europe "solved" its Greek tragedy.
This weekend's edition of The Eye of Ra will, once again, spend some time dealing with the astrological weather conditions - what I call "the spooky stuff" - as well as the technical conditions. Because both of them have some bearing on what happens next.
In the October 10th edition, I displayed a calendar of the astrological transits for the month, indicating a likely rally into late last week, saying:
"Apart from the Sun's conjunction to Saturn, the strongest aspect in the list is the late October Jupiter trine to Pluto. The symbolism of that aspect in the current conditions is that a favourable solution will be found to "big debt" and tax issues.
So, according to my interpretation of les Spookies, the symbolism suggests a hiccup in the coming week followed by a growing optimism that a solution is coming to all the nasty stuff surrounding banks, debts and taxes. It won't be real and it probably won't last - because there are other, more negative transits in play over the longer term."
The interpretation proved accurate - Europe "solved" its Greek tragedy.
In last weekend's report, I said:
"At this stage, we still appear to be repeating a similar pattern to the first Bear wave from 2007 to 2009. And, while it ain't broke we won't try to fix it.
If the pattern continues - which we'd expect given the Time requirement and the divergence in the oscillators on the daily chart - it's all still on track to probably top out within the 1240-1280 range we've been discussing, with some potential to reach 1291 or the low 1300s."
Now, I'm not rehashing all this old ground to stroke my Ego. So far, this has gone exactly according to the roadmap I laid out months ago, even down to hitting the precise expected Price levels, albeit at the upper end of my expected range, rather than the lower.
The point is: I could be wrong about what happens next. In New Bull or Old Bear (available under the Articles button) I outlined three possibilities - 1. The New Bull market is already underway; 2. The Great Sideways Shuffle; and 3. The Bear is back!
If you haven't read the piece, please do so - because while I think it's the case of The Bear is back, we have to allow for the potential for the unexpected ... a rally which continues into early 2012.
I will go over the Spooky Stuff in a little while to examine that potential in greater detail.
However, on the basis that "while it ain't broke we won't try to fix it", let's review where we are on the roadmap.
For many weeks now, we've closely followed what I've called the timeworn old script for the first leg - and rebound - of a developing Bear market.
As you know, I've put the case that we're currently in the rebound and that it will be a three-legged affair with the first upleg now probably reaching both its Price and Time requirements.
What I think will follow is a period of downwards to sideways shuffling to eat up more Time ... then another exhaustion run higher ... to be followed by a CRASH into late next year.
So, let's take a look at where we are.
"At this stage, we still appear to be repeating a similar pattern to the first Bear wave from 2007 to 2009. And, while it ain't broke we won't try to fix it.
If the pattern continues - which we'd expect given the Time requirement and the divergence in the oscillators on the daily chart - it's all still on track to probably top out within the 1240-1280 range we've been discussing, with some potential to reach 1291 or the low 1300s."
Now, I'm not rehashing all this old ground to stroke my Ego. So far, this has gone exactly according to the roadmap I laid out months ago, even down to hitting the precise expected Price levels, albeit at the upper end of my expected range, rather than the lower.
The point is: I could be wrong about what happens next. In New Bull or Old Bear (available under the Articles button) I outlined three possibilities - 1. The New Bull market is already underway; 2. The Great Sideways Shuffle; and 3. The Bear is back!
If you haven't read the piece, please do so - because while I think it's the case of The Bear is back, we have to allow for the potential for the unexpected ... a rally which continues into early 2012.
I will go over the Spooky Stuff in a little while to examine that potential in greater detail.
However, on the basis that "while it ain't broke we won't try to fix it", let's review where we are on the roadmap.
For many weeks now, we've closely followed what I've called the timeworn old script for the first leg - and rebound - of a developing Bear market.
As you know, I've put the case that we're currently in the rebound and that it will be a three-legged affair with the first upleg now probably reaching both its Price and Time requirements.
What I think will follow is a period of downwards to sideways shuffling to eat up more Time ... then another exhaustion run higher ... to be followed by a CRASH into late next year.
So, let's take a look at where we are.
I have indicated for months now that Pollyanna would recover the 1240/1280 Price zone on her weekly planets chart - with potential to hit 1291, or even the early 1300s.
Now, even with all the goo-goo/ga-ga gushing, it's not really likely that she's just going to blow through all that overhead Resistance.
We expected her to get back into the bottom layer of the previous congestion zone - and now we need to see how she reacts to it.
I won't go into the FTSE and the DAX this weekend. But, before turning my attention to the Spooky Stuff, we'll take a quick look at Auntie, the ASX200.
Now, even with all the goo-goo/ga-ga gushing, it's not really likely that she's just going to blow through all that overhead Resistance.
We expected her to get back into the bottom layer of the previous congestion zone - and now we need to see how she reacts to it.
I won't go into the FTSE and the DAX this weekend. But, before turning my attention to the Spooky Stuff, we'll take a quick look at Auntie, the ASX200.
The ASX, too, managed to get back inside the Price zone marked out as its probable distination for the current, cyclical wave higher - though it did so only briefly. On this leg.
I pointed out that the Canary oscillator had gone higher than at its previous peaks (marked), while Price was lower - which is an example of positive divergence.
However, we need to be aware of the negative divergence now showing in the current height of the MACD histogram peaks. They suggest this last run has been blowing on hot air and a downward correction is nearing before we see what I still expect to be a final push higher back inside the Cyclical Target Zone.
As with Pollyanna, Auntie is hitting her weekly planet lines on cue - and reversing from them, also on cue.
I pointed out that the Canary oscillator had gone higher than at its previous peaks (marked), while Price was lower - which is an example of positive divergence.
However, we need to be aware of the negative divergence now showing in the current height of the MACD histogram peaks. They suggest this last run has been blowing on hot air and a downward correction is nearing before we see what I still expect to be a final push higher back inside the Cyclical Target Zone.
As with Pollyanna, Auntie is hitting her weekly planet lines on cue - and reversing from them, also on cue.
The chart above shows the repeating patterns which developed to complete the first Bear leg down from the 2007 High - and the recent big drop. We've been expecting the rebound to perform in a similar way, too - and that's what it has been doing.
One of the other charts I first used many weeks ago was to predict that Pollyanna would come back to test The Last Low Before The High, and I said at the time, we would get some useful information from the way the index reacted the first time it reached back that far.
One of the other charts I first used many weeks ago was to predict that Pollyanna would come back to test The Last Low Before The High, and I said at the time, we would get some useful information from the way the index reacted the first time it reached back that far.
Well, what happened was that the index attacked the LLBH with vigour. This is both a sign of inner strength and, also, indicative of a likely near-term exhaustion.
As we've been discussing, it's not a surprise because we have been anticipating a strong rebound following the struggle-down trading against the August spike Low (discussed in previous Eye of Ra reports) - and it was all part of our broad roadmap.
However, what is NOT undone on the chart above is the state of the fast MACD, whose trough went much lower than it did midway through 2010. It is a warning that this is probably a corrective rebound, rather than the resumption of a Bull market.
The depth of the MACD trough strongly suggests that Price is going to plunge below 1000 on the SP500 on its next sustained Bear dive.
However, as we've discussed, I suspect that's not an immediate danger.
For the moment, Pollyanna continues her planetary dance between the Old Gods price lines peculiar to her.
As we've been discussing, it's not a surprise because we have been anticipating a strong rebound following the struggle-down trading against the August spike Low (discussed in previous Eye of Ra reports) - and it was all part of our broad roadmap.
However, what is NOT undone on the chart above is the state of the fast MACD, whose trough went much lower than it did midway through 2010. It is a warning that this is probably a corrective rebound, rather than the resumption of a Bull market.
The depth of the MACD trough strongly suggests that Price is going to plunge below 1000 on the SP500 on its next sustained Bear dive.
However, as we've discussed, I suspect that's not an immediate danger.
For the moment, Pollyanna continues her planetary dance between the Old Gods price lines peculiar to her.
Okay, so it's Mission Accomplished. Now, I am perfectly well aware of what happened to the last bloke who used that phrase prematurely.
We have reached the targets I laid down many weeks ago; the pattern has developed as it should have done - meeting the Price & Time targets. My bias remains that this is a Bullish corrective leg higher in a redeveloping overall Bear with another crash leg due by early next year.
I think the way it is probably going to unfold is that we are nearing, or have reached, the high point of the A leg upward and will go into a sideways shuffling B-leg with a downward bias, before a final, exhaustion run C leg higher.
Which brings me to les Spookies!
We have reached the targets I laid down many weeks ago; the pattern has developed as it should have done - meeting the Price & Time targets. My bias remains that this is a Bullish corrective leg higher in a redeveloping overall Bear with another crash leg due by early next year.
I think the way it is probably going to unfold is that we are nearing, or have reached, the high point of the A leg upward and will go into a sideways shuffling B-leg with a downward bias, before a final, exhaustion run C leg higher.
Which brings me to les Spookies!
We've already seen some superficial remarks about the devil being in the detail of the European bail-out. Well, the devil ain't started looking at the detail yet. But, just wait till the little red devil moves into Virgo and turns all that drive and energy to waging war on who's been cooking the books! And he's going to go Retrograde in Virgo! He'll be marching back-and-forth, nagging and picking and worrying over every detail.
The other significant period is towards the end of the month, centred around the Solar Eclipse on November 25. Now, it's a Sagittarian affair happening in trine to Uranus.
This is why: I MAY BE WRONG!
I've made the technical case for what I think SHOULD happen. And it remains what I think is likely to happen. And I don't want to upset the Mystic Meg Coven by suggesting that technical analysis should take precedence over Spooky Stuff. Actually, no. Bugger it. Technical analysis SHOULD take precedence over Spooky Stuff.
However, as we all know, it just doesn't do to Tempt The Gods because the rotten scoundrels have no qualms about sending the Furies screaming at you if you get too far out of line.
So, I do want to point out something in that calendar above ... no nasty Saturn stuff on the page. And markets do tend to turn around the time of a Solar Eclipse if it's a biggie - and this one is, because it's trine to Uranus, the ultimate Aqueerian whose capacity for weirdness knows no bounds.
But, I'm not finished yet.
The other significant period is towards the end of the month, centred around the Solar Eclipse on November 25. Now, it's a Sagittarian affair happening in trine to Uranus.
This is why: I MAY BE WRONG!
I've made the technical case for what I think SHOULD happen. And it remains what I think is likely to happen. And I don't want to upset the Mystic Meg Coven by suggesting that technical analysis should take precedence over Spooky Stuff. Actually, no. Bugger it. Technical analysis SHOULD take precedence over Spooky Stuff.
However, as we all know, it just doesn't do to Tempt The Gods because the rotten scoundrels have no qualms about sending the Furies screaming at you if you get too far out of line.
So, I do want to point out something in that calendar above ... no nasty Saturn stuff on the page. And markets do tend to turn around the time of a Solar Eclipse if it's a biggie - and this one is, because it's trine to Uranus, the ultimate Aqueerian whose capacity for weirdness knows no bounds.
But, I'm not finished yet.
Those of you who recall the October 10 edition know I used a similar calendar to the one on the left to show why I expected "a growing optimism" that "a favourable solution" would be found to big debt issues last week.
There is potential for further upside as Venus and Mercury enter the optimistic sign of Sagittarius in the coming week to make a favorable trine aspect to Uranus, who has natural rulership of stock markets.
On November 11, Mars will change signs from Leo into Virgo, which is a more difficult energy for the gung-ho warrior boy.
Mars, symbolic of the energy which drives all things, is happiest in the Fire signs. Virgo is demanding, discerning and very picky about the details.
It also rules accountancy. What I suspect will happen is that warrior boy will sheath the sword and laurel crown and take out his quill and magnifying glass.
There is potential for further upside as Venus and Mercury enter the optimistic sign of Sagittarius in the coming week to make a favorable trine aspect to Uranus, who has natural rulership of stock markets.
On November 11, Mars will change signs from Leo into Virgo, which is a more difficult energy for the gung-ho warrior boy.
Mars, symbolic of the energy which drives all things, is happiest in the Fire signs. Virgo is demanding, discerning and very picky about the details.
It also rules accountancy. What I suspect will happen is that warrior boy will sheath the sword and laurel crown and take out his quill and magnifying glass.
Y'see ... this period of mindless optimism might just run out to March next year.
The calendar above concentrates on the small-scale stuff - it's like gutting a rat to read the entrails, while the one on the right is a goat much more worthy of an Olympian nosh-up.
Now, that doesn't mean I'm wrong about the technical probabilities.
What I've predicted is a sideways shuffle developing near-term ... another exhaustion run higher ... and then the crash.
I've highlighted three Time zones on the transit calendar likely to signal significant shifts.
That yellow one next March repeats the same aspects we saw into last week - and with Mars in tow, not just Jupiter. So, the energy we saw last week has two encore performances - late November and mid March, 2012.
I mentioned on October 10 that one way of getting a feel for the astro energy at play is just to "eyeball" a chart.
As with the November calendar ... no nasty Saturns!! No nasty squares or oppositions.
The early part of this transit list is ALL kissy-smoochy ... grovel, smarm, suck, crawl ... Oh, Jupie, your benefic bounty showers us with olives and garlands.
And so on.
The nasty stuff - the Uranus squares to Pluto, later joined by a Libran Marshun getting in on the act - doesn't start happening until the second half of the year.
Which is when I think markets should be in full-on crash mode.
So, I could be wrong about what happens next. It all depends on whether the Old Gods are in party mode all the way to next March.
The calendar above concentrates on the small-scale stuff - it's like gutting a rat to read the entrails, while the one on the right is a goat much more worthy of an Olympian nosh-up.
Now, that doesn't mean I'm wrong about the technical probabilities.
What I've predicted is a sideways shuffle developing near-term ... another exhaustion run higher ... and then the crash.
I've highlighted three Time zones on the transit calendar likely to signal significant shifts.
That yellow one next March repeats the same aspects we saw into last week - and with Mars in tow, not just Jupiter. So, the energy we saw last week has two encore performances - late November and mid March, 2012.
I mentioned on October 10 that one way of getting a feel for the astro energy at play is just to "eyeball" a chart.
As with the November calendar ... no nasty Saturns!! No nasty squares or oppositions.
The early part of this transit list is ALL kissy-smoochy ... grovel, smarm, suck, crawl ... Oh, Jupie, your benefic bounty showers us with olives and garlands.
And so on.
The nasty stuff - the Uranus squares to Pluto, later joined by a Libran Marshun getting in on the act - doesn't start happening until the second half of the year.
Which is when I think markets should be in full-on crash mode.
So, I could be wrong about what happens next. It all depends on whether the Old Gods are in party mode all the way to next March.
Seems like an awfully long time to party. But then, the Old Gods of Greece just screwed the German bankers down to a crewcut. And, puhleeze, no snide sniggering from the English readers about that one!
So, to be completely honest ... the astro entrails do allow for a full Bull run. That's the potential. I'll stick with the probable until it proves to be wrong.
I think the roadmap has served very well until this point. I think it's still in play. And if I am wrong and Jupiter is in Bull mode, then you have the Old Gods horizontal levels to guide your weekly games and, by now, you should have picked up a little from The Idiot and positive or negative divergence signals to keep your capital intact and book some more profits in the weeks and months ahead.
So, to be completely honest ... the astro entrails do allow for a full Bull run. That's the potential. I'll stick with the probable until it proves to be wrong.
I think the roadmap has served very well until this point. I think it's still in play. And if I am wrong and Jupiter is in Bull mode, then you have the Old Gods horizontal levels to guide your weekly games and, by now, you should have picked up a little from The Idiot and positive or negative divergence signals to keep your capital intact and book some more profits in the weeks and months ahead.