InvestingSuccess

Copper sees half of its global demand coming from China. Copper is a good barometer of the China situation. Problem is, China right now is not the robust, double-digit growth China of the past. The Chinese economy is struggling. Economic uncertainty is prompting Chinese households to stash money into savings rather than go out to spend, and companies remain wary of making new investments.

The following chart shows a bearish intermediate trend (red dashed line) on copper. The major trend (200-day average, black dashed line) is also bearish with price trading beneath it. All in all, not a good situation. Note what happened on the above chart when the 200-day average intersected with the intermediate trend line. Price turned lower. This is not a positive situation.

The January 2023 highs of $4.30 represent a Fibonacci 61.8% retrace of the 2022 declines. Price could not push beyond the 61.8% retracement level. Here and now, Copper is below the 38.2% retracement level. I expect to see a re-test of the May 2023 lows.

The next Hurst intervals of longer duration (602 days and 285 days) will manifest in October 2023.

In late October 2023, Mars and Sun will both transit past 9 of Scorpio, a key planetary point in the 1988 Copper futures first trade horoscope. In addition, a Venus 137-degree heliocentric interval will manifest in October (measured from the March 2022 price high point).

These bits of evidence lead me to believe that October could bring a meaningful trend change in Copper prices.

Aphelion and Perihelion are two terms that are seldom mentioned when it comes to astrology. To be entirely correct, these terms are more related to astronomy than astrology. When a planet is at aphelion, it is farthest away from the Sun as part of its orbital journey. When a planet is at perihelion, it is closest to the Sun as part of its orbital journey. Do aphelion events of inner planets like Mercury and Venus affect human emotion? I say they have a very strong propensity to affect emotions. Let’s look further.

Here is a chart segment from 2020 when the Covid panic set in. Days ahead of the massive meltdown, Mercury was at perihelion. In March 2020 as the market was finding a bottom and as human emotion was settling down, Venus was at perihelion and Mercury was at aphelion.

The following is a chart of Corn futures. Note the shallow rounded top at the Mercury perihelion event in April 2023. The Venus perihelion event in April created a more pronounced selloff. The Mercury aphelion event in May culminated in a swing low. The Mars aphelion event in late May resulted in an end to the price recovery. More recently, a Mercury perihelion event in June led to a steep selloff in Corn prices.

These are but two examples. My back-testing shows that all of the Mercury, Venus, and Mars aphelion/perihelion events should be looked at. There will be many that do not affect human emotion. BUT when there is an effect, the financial markets will react strongly. As the old adage says, forewarned is forearmed.

Many years ago the administrators who worked to launch a new commodity contract onto an exchange seemingly were well versed in astrology. A case in point is crude oil futures and their first trade date of March 30, 1983. The horoscope wheel shows a rectangular pattern with corner points of Neptune, Mars, Node, and Moon. I have noticed that times when Sun (or Mars) passes these corner point locations in the zodiac, there is a price response on crude oil futures; sometimes a muted response, sometimes a significant response.

The following chart shows what happened recently when Sun passed three of these corner points:

In December 2022, Sun passing the 1983 Neptune point caused a drawdown in oil price. In March 2023, a steep drawdown was associated with Sun passing the 1983 Node point. In April 2023, a steep selloff was triggered as Sun passed the 1983 Mars location.

Along the way, Mercury and Moon passing these same corner points helped to define other pivot points.

Fibonacci math also plays a role in defining the crude oil price chart. In Nov-Dec 2022, oil prices fell significantly. Price recovering to the $80 level was Fibonacci 48.6% retrace of this drawdown. This same price level recently acted as overhead resistance in April 2023. A selloff in early May was halted as Moon passed the 1983 natal Moon point.

And so it goes. Astrology is a powerful tool in guiding you through the turbulent oil market.

After making a significant low in March 2020, the Canadian dollar rallied into mid-2021. Since then, it has retraced much of those gains and now is trading in a sideways channel.

In fact, the Canadian dollar retraced a Fibonacci 78.6% of its 2020-2021 gains. This level forms the lower bound of the trading channel.

In August 2022, the Canadian Dollar started on a swift trajectory lower. The recent recovery amounts to a Fibonacci 48.6% retrace of this steep drawdown. This 48.6% level forms the upper boundary of the channel.

A pullback towards the lower part of the channel will set up the opportunity to sell some Put Options. A rise through the top of the channel will provide the opportunity to take a long position.

In the segment of S&P 500 chart pictured here, the various swing points have been labeled. The movement from point I through J is equal to 123% of the quantity H to I. The movement I to J is 100% of J to K. The quantity K to L is 78.6% of J to K. The quantity L to M is 68.1% of K to L. The move L to M is 61.8% of K to L.

The S&P has been rallying during this Mercury retrograde period. How much more can it go? One possible answer is it can move up until it tests the point L. This will be a 61.8% move of the quantity K to L. Notice also at this time that price action is just poking above the 200 day average. The Fast Stochastic is now over the ’80’ mark. The coming few days after the Jan 16 MLK Day holiday will be crucial.

After reaching a high of 4808 at the start of 2022, it was a downward journey for the rest of the year. At least, to a casual observer, that is how it appeared. Looking deeper at the S&P behavior reveals something humbling. The declines on the S&P 500 were occurring in harmony with science and Nature. Consider the following chart segment of the S&P from early 2022. In particular, consider the move lower from A to B. The recovery attempt from B to C was an amount equal to 61.8% of the A to B amount. The move lower (C to D) was an amount equal to 78.6% of the A to B amount. The move higher (E to F) was 78.6% of the A-B amount. The substantial move lower F to G was 161.8% of the A-B amount.

What do these various numbers (61.8%, 78.6%, 161.8%) have in common? They are all Fibonacci retracements/extensions. The Fibonacci recursive sequence is 1,1,2,3,5,8,13,21,34,55,89,144…. Taking one of these terms and dividing it by the prior term gives figure that converges on 1.618. This is known in science and Nature as the Golden Mean. Taking the inverse of 1.618 yields a value 61.8%. Taking the inverse of the root of 1.618 gives 78.6%.

So while the price action of a stock, a commodity, or an index might appear to be random and nasty, peel back the layers of the veil and you will all too often find price moves that are in alignment with the Golden Mean.

The sign says it all. We are transitioning from a ridiculously low rate environment to a higher rate situation. The Federal Reserve bowing to political pressure and market temper tantrums refused to raise rates in 2019. Then 2020 arrived and with it came Covid and spiraling mortality rates. The taps were opened wide and money flooded the financial system in a bid to keep it afloat.

But, like the gardener who starts to water his garden and walks away, the FED left the tap running too long. In classic textbook fashion, this excess money has now created an inflationary monster. The FED is now scrambling to slay this beast.

The Bond market is anticipating that rates will move higher and that the FED’s balance sheet will be run down to drain money from the system. This is a correct anticipation on the part of the Bond market.

Equity analysts are now likewise scrambling to re-jig their NPV models in light of a higher discount rate. Mr. Market is uncertain whether to rally, go sideways, or drop as the yield curve flirts with inversion.

Volatility is the new mantra. If you know how to use technical chart indicators and hourly charts, you can take advantage of this volatility. Unfortunately, the vast majority of people have not honed this skill. 2022 could be a rough year for people who follow the buy and hold philosophy.

Will the economy tip over into recession? Or, is it robust enough to handle real interest rates going positive? McWhirter astrology says that with the North Node of Moon in Taurus, the economy will gradually slow from here until the end of the current 18.6 year cycle in 2026. The final phase of 18 year cycles usually bring with them recessionary pain, and lots of it.

To get a glimpse of what may come to North American shores, the following chart shows the ETF (N:EZU) that tracks the Euro market complex.

The MAC-D is below zero, the SMIE Oscillator is in negative territory and the Lane Stochastic has further to fall into negative territory. The European market complex is broken right at the moment.

In North America, the chart of the S&P 500 tells more of the tale. The MAC-D is above the critical zero line, but the SMIE Oscillator and Lane Stochastic are looking shaky. If the MAC-D should dip beneath zero, things could get rather ugly. If I turn my attention to Quantum Lines, I note that the 5th harmonic of the Jupiter and Neptune Quantum Lines have been violated. This is not a good sign. Support now is apparent at a Saturn 5th harmonic QL (4315 on the S&P) and failing that at Neptune and Jupiter 4th harmonics (4256 or 4125). There is some more weakness coming in the near term. Whether either of the actual 4th harmonic levels will be hit or whether a mid-point between them and the recently violated 5th harmonics acts as support remains to be seen. My hope is that the Saturn 5th harmonic level at 4315 acts as support.

Do not lose sight of the fact we are in a Shemitah Year which started in September 2021 and runs until late August 2022. Powerful events unfold in Shemitah Years in accordance with Biblical texts. I envisioned that interest rates would be a theme in this Shemitah Year. Sure enough – bond markets are trending strongly negative. What I did not fathom was the Ukrainian situation unfolding as it has.

The volatility will continue as we venture deeper into 2022. I will do my best to keep readers and subscribers apprised of what I see coming with regards to cycles and planetary events.

Lithium stocks are all the rage these days. But….buyer beware.

Broadly speaking, there are two types of lithium batteries.

First, there is the type with a short lifetime. Take some video with your camera, the battery runs low, and you have to recharge it. Do some work with your re-chargeable drill, the battery runs low, and you stop to recharge. No big deal. We are quite used to batteries like this. These lithium batteries are made using lithium carbonate material. This is the type of lithium that is extracted from the salt salar formations in parts of South America. The market is littered with companies of all market cap sizes touting their South American projects. Carbonate material can also be found in some deep wells. Again, the market has no shortage of companies touting their brine well projects.

Second, we are witnessing the electrification of vehicles. The batteries that power Teslas, however, cannot be the same as the ones that power your electric drill. A car battery must have a longer life between charges. This charge longevity can only come from batteries made using lithium hydroxide. The most economic source of lithium hydroxide is spodumene rock. But, here is the problem. There are not many companies with hard rock lithium projects. The ones that do exist are still a ways off from any type of mining scenario. And once the rock is mined, there is a processing component to the story that will allow for the lithium hydroxide extraction. It is possible to take the lithium carbonate from a South American type project and chemically convert it to lithium hydroxide. But, the cost is prohibitive. Lithium pricing is dominated by China. Right now the price of lithium hydroxide is less than the price of lithium carbonate.

Take the case of NYSE: LTHM. This US based operator has a South American project and it converts some of the carbonate to hydroxide. But, its profit margins are squeezed accordingly. Is this stock worth $23? Probably not. It is being held aloft because of the current lithium battery craze.

Take the case of Piedmont Lithium (NYSE:PLL). This is a screw up of epic magnitude. The company raised a huge sum of money to pursue its North Carolina hard rock project. Plus it carries a 37% interest in a Quebec, Canada hard rock project. The Quebec project is still a ways off from a mining scenario. The North Carolina project is a “shit show”. It seems the Company overlooked one critical element. They forgot to reach out and embrace the local County Commission. Years ago when I was chasing a rare earth project in Lincoln County, New Mexico I was called on the carpet by the 6 person Lincoln County Commission. They wanted details on what I thought would be water usage, dust creation, noise levels, highway traffic density. This 6 person group had the power to make me or break me. In the case of Piedmont, the overlooked local Commission now has imposed a series of mining moratoriums that now extend into summer 2022. On the PLL website, there is an aerial view of the area of the planned mine. There are houses and small acreages located very near to the planned site. These local residents have no desire to live beside a mine. It is plainly evident why the Commission has slapped a moratorium on the project. Is PLL worth $51? Not a chance. The lithium craze is keeping it aloft. People who are just looking at the PLL story at face value are buying the shares. They have no idea that the project is under moratorium. This detail has been downplayed and smoothed over by PLL and their propaganda machine.

Lastly take the case of Lithium Americas (TSX: LAC, NYSE:LAC). This is a high flying stock. They have a South American project that is based on brine wells and lithium carbonate. They also have a project in northern Nevada near a geological formation called the McDermitt caldera (an ancient volcano site of 16 million years ago). The lithium is embedded in a claystone formation that geologists call hectorite. Preliminary testing suggests an acid leach process will be required. The economics of the process have not been detailed yet. But, here is the rub – the lithium to be extracted will be carbonate. Is LAC worth $30? Not a chance, I say. This stock is caught up in the lithium craze.

This blog obviously has nothing to do with astrology, astronomy or market cycles. I am writing this post to help people avoid getting tangled up in the lithium craze.

Bottom line – you want a hard rock lithium story. It has to be close to being an operating mining scenario and the company must have plans to process the rock to extract the lithium hydroxide. Moreover, the company must be fully permitted by all levels of government right down to any local Commissions. Anything else is just chasing a dream….. Buyer beware.

The other day I was searching through the available books from my local Library. I spotted one called Making It In The Market – so I ordered it in.

Turns out the book was written in 1975 by Richard Ney who was a financial advisor in New York. He did a few appearances in Hollywood movies, which put him in close contact with some “monied” people.

In his book he makes the claim that the equity market is dominated by market makers who are tasked with ensuring orderly trading in stocks. Each market maker is assigned a basket of stocks to supervise. They are also free to use their own money to amass positions in the stocks they manage. There is an unwritten rule that says market makers will always collaborate together to either give the overall market an uptrend or a downtrend. An individual market maker will never run against the herd, so to speak.

He further goes on to reveal that a market maker holding shares in Company ‘A’ will buy more shares and cause the price to move up. This will grab media attention. People will read about the stock move in the media and call their broker to place a buy order. Through it all, the market maker is in control. Once he has sold off his position to hungry retail investors seeking to get rich, the price trend of the stock will have no more support and price will drop.

Ney wraps up the book with a detailed explanation of 3 lines that should be sketched on monthly price charts. The angles defined by these lines are key to understanding future trends.

All in all, a very revealing book. If your local Library has it (or can get it on an inter-library loan) I suggest taking the time to read it.

As suggested in my most recent blog, the month of January has a whole lot of cosmic energy squeezed into a lunar cycle. The first trigger point I listed was Jan 5 and Moon being Void of Course. These Moon VOC events have a tendency to cause unsettled nerves across equity markets.

Today, Jan 5, started more or less normal. The S&P was quiet for the first couple hours. This allowed me to gracefully sidestep a couple long positions (Borg Warner – NYSE BWA) and (ERO Copper – TSX: ERO) to take a modest gain. My trades came just in time because the S&P soon turned nasty as the following hourly chart shows. As I post this blog, the March S&P is down 70 points. January is not over yet. There are several more trigger points to come….