Stock Market Astrology Part IX
We have seen that the primary trend is always interrupted by secondary trends and a bust can happen in a primary booming market. Most deceptive is the secondary reaction ! Investors shiver when such a secondary reaction happens. Many panic and sell off their entire holdings. It is difficult to identify this secondary trend because one does not know whether it is the beginning of a primary bear market or a secondary reaction. Intuition alone can identify secondary trends. The foremost amongst the intuitive sciences, Astrology, here comes to our rescue.
The investor population in India did panic when the Sensex slid from 20400 to 18000. Normally a secondary reaction lasts from 3 weeks to 3 months. The market recovered only after 3 weeks. Many panicked and thought that this signalled a bear phase. It was disproved only after 3 weeks when the market surpassed 20000 !
We have declared that Intuition alone can determine trends. Amongst the Scientia Intuitiva, the foremost science Astrology can definitely determine primary, secondary and tertiary trends. That Jupiter's transit of the second can fuel an economic boom was known to the sages. " Nana Dukham Vitha Samriddhi " - thus runs an aphorism, meaning that Jupiter's transit of the second can trigger a stock market boom, if the stock market can indeed be taken as a barometer of the economy !
We will define secondary reactions which are a bull decline in a Bull Phase and a bear rally in a Bear Phase.
Nelson remarks that " A secondary reaction is considered to be an important decline in a bull market or advance in a bear market usually lasting from 3 weeks to 3 months during which intervals the price movement generally retraces from 33 percent to 66 percent of the primary Price change since the termination of the last preceding secondary reaction. The reactions are frequently erroneously assumed to represent a change of primary trend, because obviously the first stage of the bull market must always coincide with a movement which might have proved to have been nearly a secondary reaction in a bear market, the contrary being proved after the peak has been attained in a bull market. " ( The ABC of Stock Speculation ).
While theoretically it is easy to talk about primary trends and secondary reactions, practically it is difficult for an invester who has invested all his savings in an unpredictable market. The investor's normal reaction to a decline is to panic. Suppose you buy Reliance for 2800. After 2 days Reliance becomes 2780 ! What will you do ? You panic thinking that a bear phase has started and will sell the scrip at a loss. Then later, say after 3 weeks Reliance starts its climb and becomes 3000 ! So the investor needs guidance from technical and fundamental experts. But can Fundamental Analysis and Technical Analysis guide him ? If FA and TA could guide millions, we wont have so many losers ! This indicates the scope for another analyst - The Stock Market Astrology expert - who alone can determine trends based on the intuitive sciences !
Now a secondary reaction is taking place and the Sensex had slid down to 4700 levels. 4930 meant an overbought situtation and a correction had to occur. You can either hold on to your portfolio ( as this is merely a secondary reaction in a primary upward market ) or sell off and enter when the Sensex is 300/400 points down. There is no need to panic as this reaction is secondary and not primary.
Even though we are confronted with a Bull Market now, we will deal with a Bear Market which will come after some time as the Market is cyclical.
The Primary Bear Market
According to Nelson " A primary bear market is a long downward movement interrupted by important rallies. It is caused by various economic ills and does not terminate until the stock prices have thoroughly discounted the worst that is apt to occur. " ( The ABC of Stock Speculation ).
When we take a graph and when we find falling resistance ( high ) and support ( low ) levels, we can deduce the primary trend as a Bear Phase. When we see secondary rallies known as bear rallies, we can identify the secondary trend as rallies in the primary bear market .Tertiary trends are unimportant. Nelson categorically states that " a primary downward market is characterised by a) extinguishment of all hopes upon which the stocks were purchased at inflated prices b) selling due to decreased business and earnings c) distress selling of sound securities, ragardless of their value, by those who must find a cash market for at least a portion of their assets."
When the Sensex slid from 6151 in 2001 to 2900 at the beginning of 2003, it signalled a Bear Phase. There were many rallies but they were all secondary rallies in a primary falling market. Stock markets are cyclical and he who knows about the cyclical nature of the stock market grieves no more !
Tertiary Trends - Daily Fluctuations
Nelson averrs that " the third and usually unimportant, movement is the daily fluctuation. Nevertheless, the day to day pattern must be studied because they nearly always develop into a pattern easily recognised and having a forecasting value." ( The ABC of Stock Speculation )
Relation of Volume to Price Movements
Says Nelson " the market, which is in an overbought state, becomes dull on rallies and develops activity ( read as volume ) on declines. Conversely, when the market is in an oversold condition, the tendency is to become dull on declines and active on rallies. Bull markets terminate in a period of excessive activity and begin with comparitively light transactions. " ( The ABC of Stock Speculation )
"Manipulation is possible in the daily movements and secondary reactions are subject to such an influence to a more limited degree, but the primary trend can never be manipulated". ( The ABC of Stock Speculation ).
The primary trend is caused by a variety of economic factors and is not manipulated although there were some manipulations in the tertiary and secondary movements.
There can be corrections. We have to understand that they are mere secondary corrections in a primary bull market. Patience alone can win the game for us ! He who exhibits one man's intelligence and six men's patience alone can win !
Article by G Kumar, astrologer, writer and programmer of www.eastrovedica.com He has 15 years research experience in Stock Market Astrology and various other branches of Astrology. Recently he was awarded a Certificate by the Planetary Gemologists Association. as a Planetary Gem Advisor. His lens is up at http://squidoo.com/FinancialAstrology & blog at http://stockmarketastrology.blogspot.com
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