The volatility has picked up in the markets. Last week the Nasdaq timing signal turned bearish for the long term. The Dow however remains bullish for the long term. We would need to see 2-3 weeks of continued selling pressure for the Dow to also signal a bearish trend. In light of my projections for the first week of November I believe we will see the Dow also turn bearish the week of October 20th.
Bill Gross’s departure from Pimco and move to Janus is a big deal. The markets rebounded on Friday with the announcement but in my view there is more trouble to come. Gross’s departure has the signature of a former professional gambler calling the cards, it was expected that he would be dismissed on Saturday. After the first week of October there could be a mass exodus from Pimco funds as more investors learn Bill is no longer a part of the firm. There have been rumors for months that Bill was potentially going to be forced out/retire. An article in Reuters last February titled “Is It Time For Bill Gross To Retire?” said it all, they wanted him out. Looks like Bill threw has his own agenda and the market volatility peaked on the rumors.
The risk for more volatility is higher now with Uranus moving retrograde and then square the U.S. Sun at 13 degrees Cancer in October. From here the markets will likely resume an upward trend and could potentially test the recent highs. We will book profits into strength and look for short setups into October.
Lunar Eclipse October 8, 2014
Last week I covered the Mercury retrograde beginning October 5th. On the heels of the retrograde is a total lunar eclipse at 15 degrees Aries. This is a powerful eclipse so I have added the astrology chart to illustrate what is happening. You can see a kite formation in the center with the aspect lines.
Kites are powerful configurations and I often mention them in stock chart analysis. (more…)