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[tradermama]

MMA Comments for the Week Beginning August 9, 2010

Written by Raymond Merriman

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The midsection of the Cardinal Climax correlated with powerful developments in nature last week. Monsoons in Pakistan have killed hundreds of people, and in China, rains have recently displaced over one million people. A record heat wave in Europe has led to fires and soaring Wheat prices as Russia has now banned all exports of the grain. Wheat futures rose to 841 intraday on Friday, following Thursday’s limit up, an appreciation of nearly 100% since its low of 425 under the Jupiter-Uranus conjunction of June 8. Of all the forecasts made in the Forecast 2010 Book, this may have been the most impressive, for it clearly described the possibilities of a drought in July-August, and gave a price target as high as 880 +/- 108 for Wheat. That’s not bad in terms of time or price for a forecast made back in November 2009. By the end of the day on Friday, Wheat was limit down at 725.

There are some indications that major developments in both politics and economics are also transpiring as we are now well within the middle part of this fifth layer of the Cardinal Climax (July 21-August 21). As mentioned previously, the “Financial Regulatory Reform Act” passed right as this time band began on July 21, and this promises to be a monumental shift of the power balance between the government and banks. Previously it may have seemed as if government existed for the benefit of the banks. Imagine that being reversed in this new decade, this “New Era of the Regulator.” But just as important may be the increasing – not decreasing – role of the Federal Reserve as the “Fourth Branch of Government.” This is a subject I will be addressing more and more in the Longer-Term Thoughts section of this column, for the well-controlled “leaks” of the past week regarding the Fed’s tentative actions are a concern for the financial well-being of this country, its people, and in fact of people everywhere.

It is too early to tell how many markets are to reverse under this incredible geocosmic set up of July 23-August 9. But there are early indications that substantial reversals could commence from the highs or lows that formed in many markets this past week. In Europe, the German DAX didn’t just make a new cycle high, it made anew yearly high on Friday, August 6. On Thursday, the London FTSE took out its previous cycle high of June 21. However, rallies in both the Netherlands AEX and Swiss SMI indices did not take its cycle highs of June 21.

The same type of divergence was noticeable in Asia and the Pacific Rim. Like the DAX, India’s NIFTY index made a new yearly high, and the Hang Seng of Hong Kong made a new cycle high, taking out the previous cycle crest of June 21-22. But the August 3 high in the All Ordinaries of Australia fell short of its June 21 high, and the Japanese Nikkei only got to 9750 last week, which was below the 9760 high of the prior week and well off the 10,251 high of June 21.

Intermarket bearish divergence in this incredible geocosmic reversal zone was also evident in the Americas. The Dow Jones Industrial Average soared to a new cycle high of 10,703 on Thursday, August 5, well above its previous cycle high of 10,594 back on June 21. Yet the NASDAQ Composite could manage a rally to 2291 on August 4, which was not only below the 2307 high of July 27, but well below the 2341 high of June 21. Both the Bovespa of Brazil and Merval Index of Argentina rallied into early last week, but fell well below the prior cycle highs of June 21-22. It is too early to claim these markets have indeed topped out and will now fall hard, but these are the kind of leading indicators we look for under powerful geocosmic signatures like we see in effect right now.

Yet the big story is in the drought-driven grain markets, especially Wheat. Soybeans and Corn also posted big gains last week, especially when measured from their lows of June. Currencies were another big story as they exploded last week under the transit of heliocentric Mercury in Sagittarius (August 2-12). The Japanese Yen soared to a new multi-month high, and to a lesser extent, so did the Euro and Swiss Franc currencies, as the dollar fell to a new multi-month low. In concert with the currencies and heliocentric Mercury in Sagittarius, both Gold and Silver rallied. But the even bigger story was in the Treasuries, which have now risen to their highest levels since the Panic of 2008.

Short-Term Geocosmics

This week continues the awesome lineup of geocosmic signatures that constitute the midsection of the Cardinal Climax. Venus now enters Libra (August 6-September 8), a planetary cycle that is usually bullish for stock indices because Venus rules Libra, and pertains to assets (like stocks). However, the initial aspects that Venus forms to the Cardinal Climax planets can make this particular cycle a little bumpy. Venus starts with an opposition to Uranus on Saturday, August 7, followed by its conjunction to Saturn on August 8. On Monday, August 9, it will then square Pluto and form an opposition with Jupiter. Later that night (and early the next day in Europe and Asia), there will be a new moon in Leo. By the end of the week, heliocentric Mercury will end its ten-day sojourn through Sagittarius, and Uranus will retrograde from Aries back into Pisces, where it will remain through March 11, 2011.

But it won’t end there either. The following week (August 16) begins with the 2nd passage of the 20-year opposition between Jupiter and Saturn. At the end of that week (August 20-21) Venus will conjunct Mars in Libra (Venus rules Libra, Mars is in detriment in Libra), the Sun will be in opposition to Neptune (a very powerful Level 1 reversal signature), Mercury will commence its three-week retrograde motion through September 12, and Saturn will end its 32-37 year waning square to Pluto cycle. Then we might be able to look back and realize the importance of what just happened. Or maybe we will even need to wait until Mercury retrograde ends before we begin to understand it all. In fact, there are likely more decisions to be made and more events to unfold that will potentially alter our reality and transform our future in ways we can’t quite fathom right now. This is both an exciting and dangerous time. We are still very much in this new portal where the rules of before no longer work and the rules that will now apply are still being learnt.

But the bigger question will be: who is in charge? The people? The government? The banks? The multi-national businesses? The delicate balance between all four is changing as the Cardinal Climax of 2008-2015 gets into full gear now.

Longer-Term Thoughts

There was a time, not long ago, when I interpreted the transits of today’s Cardinal Climax to the Federal Reserve Board Chart (December 23, 1913, 6:02 PM, Washington D.C.) and compared them to taking a brand new Ferrari out for a test drive one night, taking the speed up to something like 160 mph, and then lights go off, the accelerator gets stuck, and directly ahead is a bend in the road. And there you are, trying to figure out it, thinking “What the ____ do I do now?” I mean, to me, this is the symbolism of Jupiter conjunct Uranus in Aries, T-square to the FRB Pluto-Sun opposition at 0-1 Cancer/Capricorn. Jupiter in Aries by itself, in square to the FRB Sun-Pluto, would be a time in which the Chairman (who is a Jupiter-ruled Sagittarian) would be prone to over-estimation, and poor judgment exemplified by taking on too much risk (the downside of Uranus also in Aries). It is an aspect signifying over-confidence, maybe over-generosity, and one that could lead to large losses. And then comes Saturn in Libra, in opposition to Jupiter-Uranus in Aries, to complete the grand square to all of these planets. Oh, oh. The lights suddenly go out. And the accelerator gets stuck while the Ferrari is at top speed. “What the ____ do I do now?”

So, what is happening with the Fed right now? They are committed to keeping rates low until they are more certain that the economy can stand on something of a foundation without crumbling down to a second dip recession and - *******-forbid - another Panic. OK. And they are discussing purchasing more Treasuries to support longer-term Treasury prices and lower long-term interest rates. The lead article in Tuesday’s Wall Street Journal put in perspective as follows: “The issue: Whether to use cash the Fed receives when its mortgage-bond holdings mature to buy new mortgage of Treasury Bonds, instead of allowing its portfolio to shrink gradually.”

Now let me see if I get this right. The Federal Reserve Board controls the printing of money and the amount of money in circulation in the USA. They are the government’s bank, where the government deposits the people’s money (tax monies). And that bank, privately owned but rapidly becoming the fourth arm of the government itself, is purchasing more and more of the government’s (really, the people’s) debt as a result of its government’s excessive spending. In other words, the government is going into this massive debt to its own bank. The question I would like to ask is this: if government treasuries (debt) are so much in demand right now, why does the Federal Reserve Board even have this kind of discussion? Isn’t it like pushing the accelerator to the floor? At night? And losing sight of where you are going?

“The central bank’s $2.3 trillion (that’s with T, not a B ) portfolio has nearly tripled in size since 2007,” according to the same article. And the Fed is discussing increasing it even more now, rather than allowing this grossly overextended portfolio to contract? Something’s wrong. As we look at the recent market activity of U.S. Treasury Bonds and Ten-Year Notes, we observe they are starting their most ambitious run upwards since the all-time highs recorded in December 2008, when the Panic was in full force. That was a bubble, created by fear. This is starting to look like another bubble created by fear. It’s on the way to becoming a double bubble and if it continues, it means “double bubble trouble.” Treasuries don’t become bubbles unless there are troubles. It may be time for the Fed to get its foot off the accelerator as the lights are going out, and start to think about taking less risk. Yes, I know the argument that this is how the Fed is keeping us from falling into another recession by purchasing mortgages and Treasuries to keep rates low. But why is the government allowing its bank to buy so much of its debt? Who is in control here? Those who control the debt. And who is losing control by these decisions?

[golden]

MMA Comments for the Week Beginning August 9, 2010

Written by Raymond Merriman

Review and Preview

Hi Tradermama,

Can you please translate that into where the gold and stock markets are headed over the next few weeks.

What's your take.

Best regards,

Jesse

[tradermama]

MMA Comments for the Week Beginning August 9, 2010

Written by Raymond Merriman

Review and Preview

Hi Tradermama,

Can you please translate that into where the gold and stock markets are headed over the next few weeks.

What's your take.

Best regards,

Jesse

Hi Jesse,

I can only give what I see at the present because my crystal ball is at the cleaners. On a TA basis, we are at a crossroad here closing at 1205.20 which looks bullish due to a few buy signals from actually last week..ie; macd crossover, over it's 55 em which is 1196.78, nice bullish close on the weekly above its 8 ema (1202.19) but barely....that said, like always it seems to close at resistance which on the daily is the 55 ma at 1209.86...(yes, it could gap over it)...last week action was wild if one was watching gold and silver etfs...because intraday I think it was Thursday around 11am est both dropped fast..especially on silver..I didn't know what to make of that..you can go to a 15 minute chart and see that.

Long term of course, you can't time gold...and right now, it can be poised to break up if it can get over 1220 on a closing basis. Whether it makes a new hi from that point right away, I wont venture on saying it because I do allow the market to tell me that. I think gold right now is going up into Tues/Wed for one reason and that is expecting some quanitative easing from the FED...In fact, I think that's why the market recovered too....Tues is a new moon and also is a bradley turn date..and the Fed meets...so Tues/Wed we either accerlate or reverse in the markets imo...and I think gold will react to the Fed..the Fed is in a tight spot with this last jobs report...

Astrowise...the Fed is a Saggitarius..they have a tendency to take big risks, can be careless with money, and can have a big ego. That said, perhaps his ego gets in the way here and he holds to his path of saying that there's no change in policy because being opinionated he couldn't have made a mistake in thinking the economy is out of control. If he shows panic by lowering rates which won't really help, that would show panic imo...which could create a pop and drop later in the week. So, to me, what happens Tues/Wed is the key for direction including gold/silver. As Merriman said, the Mercury Saggitarius factor runs out Friday. Mercury represents communication. Saggitarius can exaggerate. But exaggeration can work both ways..up or down.

But short term, gold needs to close over 1220 and then we go from there. I know Dharma has a new cycle which I believe he said should end in October. Silentone has a low no sooner that around end of 3-4th week of August but can go later. They both have been right on with their outlook. Merriman in his forecast book of 2010 said to buy the low in gold in August....so far that's round 1175 area...the question is have we seen the low? If you search my posts here, I mentioned what Merriman said about gold in his webcast on 7/11 which he thought it could have a possibility of going to 1300-1350 if it didn't break 1168. It went as low as 1155.90 end of July. so I"m not sure if that negated his outlook or if he is more subdued on his call now. But remember, nothing is 100%...Astrology is just a forecast of the weather per se..it doesn't predict..just allows you to get your umbrella before you go out if that forecast shows a possibility of rain. One thing you need to do is to understand it's going to be choppy in the markets. People are nervous and you can see that with the hi trin Friday. I think the Fed stepped in Friday and saved the market based on the way it was looking imo.

Hope that helps..that's my take..long term gold up..short term gold needs to get over 1220 and then we see..that's just for trading purposes which is definitely hard to do when they whip it around a lot which they did last week.

TM

[golden]

Short term, gold needs to close over 1220 and then we go from there. I know Dharma has a new cycle which I believe he said should end in October. Silentone has a low no sooner that around end of 3-4th week of August but can go later. They both have been right on with their outlook. Merriman in his forecast book of 2010 said to buy the low in gold in August....so far that's round 1175 area...the question is have we seen the low? If you search my posts here, I mentioned what Merriman said about gold in his webcast on 7/11 which he thought it could have a possibility of going to 1300-1350 if it didn't break 1168. It went as low as 1155.90 end of July. so I"m not sure if that negated his outlook or if he is more subdued on his call now. But remember, nothing is 100%...Astrology is just a forecast of the weather per se..it doesn't predict..just allows you to get your umbrella before you go out if that forecast shows a possibility of rain. One thing you need to do is to understand it's going to be choppy in the markets. People are nervous and you can see that with the hi trin Friday. I think the Fed stepped in Friday and saved the market based on the way it was looking imo.

Hope that helps..that's my take..long term gold up..short term gold needs to get over 1220 and then we see..that's just for trading purposes which is definitely hard to do when they whip it around a lot which they did last week.

TM

Thanks tradermama,

Your input is very much appreciated.

Jesse

[Islander]

Good analysis, I think 120 GLD on good vol, above 19 million shares, is required to move into a new ABC up. Anything less means a slow correction down to probably 113, not the end of the world, but a short trade. Longer run I see the upside driven by fear. Good post, Islander