Sand Spring Advisors LLC
Of the Sun and the Moon
July 23, 2002
by, Barclay T. Leib
How fitting that it is that we have reached our 7693-7705 target range on the Dow and 794-808 target range on the S&P 500 going into Wednesday's full moon. How fitting as well that into this period, G.E. has now finally reached (and slightly exceeded) our long espoused downside target of $25.50 -- first mentioned back in our June 1, 2001 Chart du Jour when we showed subscribers a pattern match of GE compared to the 1936-1937 Dow Jones chart pattern.
Human emotion is certainly high at the moment, and in addition to the pull of the moon on the human psyche, the sun appears to be involved too. In the current sunspot cycle #23, sunspot activity has remained unusually high for far longer than normal. Sunspots have still been numbering well above 170 on certain days recently, with Tuesday witnessing 176 sunspots -- still a very high number on an outright basis, and still relatively high when compared to the NASA prediction below for soon-to-be waning sunspot activity.
Chart courtesy of Nasa
As explained by SpaceWeather.com, the sun even experienced a rather large coronal mass ejection on July 23rd:
The source is sunspot 39, emerging near the Sun's southeastern limb (pictured below). Twisted magnetic fields above the active region erupted this morning, July 23rd at 0035 UT. The explosion sparked a powerful X4-class solar flare and hurled a coronal mass ejection (CME) into space. Although the CME was not squarely Earth-directed, some of the expanding cloud is heading our way. Sky watchers should be alert for auroras when the CME arrives--possibly late Wednesday, July 24rd.
Photo courtesy of SpaceWeather.com
The moon will specifically be full at 5:07am EDT Wednesday. The CME will likely hit Earth later in the afternoon. We can almost picture the moon pulling human emotions in one direction, while the sun's influence buffets electromagnetic impulses in another. Specifically, since we have already reached a region that we preceive should be technical Fibonacci support, if there was ever to be a day when the heavens might offer up a sharp reversal, Wednesday should be it. The only worrisome portent against this was the Tuesday break of the NASDAQ 100 below the 930-970 range that had been holding -- amazingly enough -- ever since July 2nd. Wednesday's price action should confirm whether this breakdown was truly real, or just an intra-week throwover.
Chart constructed using Advanced GET End-of-Day
We think a reversal of some sort will come near current levels. But if a reversal does not arrive almost immediately, the only other target range we can dare mention is the region of 6500-6995 on the Dow Jones, and we will have to belatedly conclude that a true "crash" is currently unfolding that could drag all the way out to our November 7, 2002 cycle date. For now, we maintain reasonable hope that November 7, 2002 will yet come to represent a knee-jerk bounce period back toward neckline resistance (as pictured below by the blue line on the S&P 500). But the impact of Wednesday's sun and moon will likely lend further clues as to what exactly is transpiring here.
Chart constructed using Advanced GET End-of-Day
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