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This is not one of our normal
charts. I used it last week to show what appeared to be a triangle
pattern forming in the Wall Street blue chip index and made the
remark last week that “it is now rapidly approaching the
point where it simply must break clear of
It’s obvious the index finished the week at the point where it must breakout or breakdown.
The relatively high level of the Ratio Oscillator and the fact that last week’s High was recorded with slight negative divergence in the height of the indicator peak, suggest a lot of weakness.
We’ll take a different view of the same chart, which suggests the same thing …
And it’s this … a Bearish rising wedge, with rising Lows, but prices unable to break out to the topside.
The peaks in the fast-moving RSI 3 have been dropping steadily.
And yet, we have a contradiction … the slower RSI 14 has been gradually improving. As I indicated earlier, that improving underlying support also shows up in the money flow indicators.
They’re not exceedingly Bullish, but nor are they as Bearish as both of these charts tend to suggest.
So, let’s consult our normal chart …
You might notice that on the previous charts I was extremely generous in the placement of that rising trendline.
This one, I think, is more attuned to reality – and it compounds the more negative scenario for pricing as we enter the holiday-shortened trading period ahead.
All three indicators are showing signs of wanting to head south.
So, what we have so far on all three daily charts, are signs which lean more towards the negative than the positive – coming into the period when most professional managers are looking forward to leaving their desks until next year.
Let’s look at the weekly …
And it highlights the breakout/breakdown point at which we’ve now arrived.
Neither the MACD signal line, nor the histograms, have yet given a Buy signal and the Stochastics still can’t decide whether to rise, or fall back into the Bearish zone below 25.
Too, the slower, red CCI line has yet to make it back to the Zero level, let alone cross it to the topside.
The blue line, however, is much more optimistic about the very short-term.
However, I warned last week both the technical patterns and the planetary price lines do suggest any further rally in the 500 runs a high risk of topping out near the 940 level.
So, while the professionals prepare for holidays, the markets will be in the hands of players … and the fund managers who want to do some end-of-year window-dressing.
Which means … we may yet get a slimmed-down Santa rally, but it will be largely meaningless and there will be great danger in locking-in Long positions thinking that a bigger, intermediate-term rally is underway.
S & P 500 Harmonic Planetary Price Lines [click for complete printable PDF report including all charts]
Technically, we know the Support/Resistance lines come into play at particular price levels … that they’ve been in play now for a couple of months … and that they link back further to price levels near the bottom or the previous Bear.
Astrologically, there are a couple of Pluto lines that have been constraining price rises.
The 500 broke to the other side of the downtrending, dashed Mercury line that we’d been hoping might take the index down to make a firm, tradeable bottom at the Mars/Saturn price crossing, but it didn’t co-operate and simply tracked sideways under the Pluto line.
And we may see more of the same. Any topside breakout is likely to be halted by the downtrending Mars mirror – and a drop down could be rescued by the rising, red Mars.
In short, we have no clear direction – and both downside and upside appear to be quite limited, suggesting the indices will remain trapped within a narrow trading range until 2009 gets underway.
Volatility Index [click for complete printable PDF report including all charts]
The medium-term decline in the VIX, the fear index, continues. Despite Friday’s wavering reaction to the US car industry’s temporary bailout in the Wall Street indices, the VIX dropped to its lowest level in months.
Curses and unseemly sailor language, of course, because the CCI and the Stochastics suggest volatility could rise again this week, even while the more intermediate decline continues.
The Bollinger Bands are narrowing; the bottom band is curling upwards; and this drop below the red horizontal may prove to be a “false break”.
There were a couple of bright notes on Wall Street last Friday … the small cap Russell 2000 improved and the Nasdaq Composite behaved better than the Dow Jones Industrials.
NASDAQ Composite [click for complete printable PDF report including all charts]
Technically, there are a couple of interesting points.
The short-term triangle pattern appears to have been invalidated. But, the rising Bearish wedge is not – at least, not yet.
To the topside, the blue line at 1600 limits the rises, even while the Nasdaq continues building along a rising red trendline, which may be the bottom of a developing channel.
The indicators are not decidedly Bearish, even with some small negative divergence.
As with the 500, however, the planetary price lines suggest not much further upside – and not much strong downside.
NASDAQ Harmonic Planetary Price Lines [click for complete printable PDF report including all charts]
On the Nasdaq, it is a Neptune line which has capped prices recently, while index prices have been following the general thrust of a rising Mercury.
The lines indicate any rally would run into planetary resistance at 1650 … but that support will come into play in the high 1400’s.
Overall then, nothing dramatic has happened that suggests we did
not make “the” bottom on November 21 … but the
rallies on various indices have not retraced very much
This pattern is repeated on most of the worldwide indices in Europe, Asia and Australia.
In fact, the ASX has been hovering just below the Fibonacci 23.8 level for weeks – and not 23.8% of the major range down from last year, just the drop from early September.
It’s hardly an indication of great strength!
Signs of a slowly-improving outlook do show up in all three technical indicators, especially the CCI.
The 200 reconnected last week with the fast downtrend line from October – and backed off.
It points to the risk that this sideways pattern has merely been a pause, a consolidation, before resuming the fast trend down.
The state of the indicators suggests that interpretation is unduly pessimistic.
It’s a question one would prefer not to see answered, either
way, during the final two weeks of the year – since the lack
of volume and the distraction of the holidays means
A reminder anyway … we enter an important Fibonacci turning
point cluster zone over the next two weeks and we have a New Moon
in Capricorn at the end of the week,
As with all the other indices, London’s FTSE has remained
trapped in a very narrow range … and we now find out which
line holds and which breaks – the red uptrend line or the
The indicators are pessimistic.
I’m not certain they’re right; it depends on how badly fund managers want to make things look prettier by December 31st.
My best wishes go out to all of you.
During the break, I will give some thought to making some changes
for next year. Please feel free to write to me with your suggestions.
I’m thinking our friends in Singapore
Warm regards and best wishes – RA, firstname.lastname@example.org
*NOTE: Jeanne Long, professional trader and a leader in the research of financial astrology, was a student of the works of W.D. Gann. She has authored several books on financial astrology and developed the principles used in all the Galactic Investors Astrology software. Randall's technical charts and the planetary price line charts included in this report are created using the Quick Harmonic Trader Software, by P.A.S. Astro-Soft, Inc. makers of Galactic Investor Astrology software.
The World At Large is delivered in advance to Astrological Investing Premium Member subscribers. Randall Ashbourne is a former journalist and political strategist who trades the Australian market..
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