August 9, 2002
randomhouse.com
The market will likely rally into the month's end. Most intermediate-term cycles point up. But traders should take profits as the month progresses. From August 22 to 28, there are aspects that have brought the market down in the past. September, which has traditionally been weak, looks like a downer. The magnitude will not be nearly as great as that of last September; in fact, the high will likely occur late that month.
In addition, as all Gann students know, there have been many turning points within this time period. The Mars-Uranus opposition on the 24th is one of the better top-spotters. In 1983, when I first programmed the basic algorithm for assessing the impact of planetary aspects on the market, the first cycle that I ran was this one. This basic calculation is the heart and the soul of the later commercially available programs that I designed. The opposition is the peak in the 1.8-year cycle between these two planets. In addition, Arch Crawford has pointed out that all serious crashes have come near this opposition. Not all such aspects precipitate a crash, but crashes do occur near this aspect. Pluto opposing the Node lends support to the bear's case as the month ends. So sell into strength.
Let's look at the defense stocks. This was the domain of many stocks in the old days, but consolidation reduced the number of companies to a handful of giants. Recently, a few new companies have popped up, and some companies, like Goodrich, have shifted the focus of their business to this area. I have created a group of 13 stocks as representative of this industry. I prefer to loosely follow the ValueLine groupings rather than the Standard & Poors, because the latter tends to be very narrow. Here are the stocks, symbols, and their first-trade dates:
Alliant Techsystems (ATK-10/8/90)
Aviall (AVL-12/1/93)
Boeing (BA-9/4/35)
General Dynamics (GD-4/25/52)
Goodrich (GR-10/31/50)
Lockheed Martin (LMT-3/16/95)
L-3 Communications (LLL-5/19/98)
Moog (MOGA-8/27/2001)
Northrop (NOC-6/19/85-This is the date upon which NOC merged with Grumman)
Orbital Sciences (ORB-7/10/97)
Raytheon (RTN-12/18/97)
United Defense Ind. (UDI-12/14/2001)
United Ind. Corp. (UIC-12/15/64)
The next step is to scan the charts to see where the significant sign placements are. Looking at all planets, the Node, and angles, we see that Scorpio and Sagittarius are heavily tenanted. Aquarius and Cancer are next. In a mundane horoscope, some points are more important than others. Charles Jayne always assigned the greatest importance to the Sun and its progressed position. Sag is the number one Sun-Sign in this small sample. In first-trade horoscopes, the Moon and MC are very sensitive. The Moon is most frequently in Cancer, followed by Sagittarius and Taurus. Scorpio is on the MC most frequently, while Cancer and Taurus are second. Another consideration is the planet that is most descriptive of the industry. In this case, it is Mars for most stocks, which is most often in Sagittarius or Scorpio. Uranus might also be considered an industry planet for the more high-tech companies. Uranus is most frequently in Aquarius or in Capricorn for most stocks. The next step is to determine what phenomena will influence the charts the most. In this case, a favorable transit in Cancer, such as Jupiter, will conjoin all of the planets in that sign while trining the planets in Sag.
ATK makes conventional munitions, smart munitions, and aerospace propulsion components. In light of the war and the President's projection of a long conflict, it seems likely that demand will stay strong for two of ATK's business lines, which represent sixty percent of sales. Pluto is sextile the Sun, and Saturn is sextile the MC. There will be a Jupiter return next month. There might be some doubt as to ATK's earnings in the fourth quarter when Uranus stations opposite the MC. Thus, ATK will likely stay ahead of the average stock for the next two months, at least.
MOGA makes precision instruments and controls for the defense and airline markets. The stock has benefited from Jupiter in Cancer because it has a grouping of planets in Cancer plus another group in Sagittarius. Jupiter leaves that sign this month, so the beneficial influence dissipates and the stock will no longer be as attractive.
GD is the well-known defense contractor, making submarines and aerospace systems. Saturn ran over the progressed Sun last month, and Jupiter trines the MC this month, so GD shares will likely move up a little. Other than these aspects, there is not much to suggest that this stock will outperform in the next few months.
UDI is a new company that moved onto the NYSE in late 2001, so there is little price history. The company makes armored vehicles. Six planets and the Node are in the Gemini-Sagittarius axis, and Mars is in Pisces. Saturn is exiting Gemini next year, so this stock's chart will not be afflicted after that. The December eclipse opposes Saturn, so wait until the first quarter of next year to consider these shares.
RTN is the result of a merger between the old RTN company and Hughes Electronics. The company makes ground-based air defense systems, missiles, radar, and general aviation aircraft. Jupiter's move into fiery Leo will be a benefit due to the presence of five planets in fire signs. Jupiter will also oppose four planets in Aquarius. The only difficulty is the transit and the station of Saturn opposite the 26° Sag Sun in the fourth quarter. This will likely hold the stock back. So buyers can purchase now and "look across the valley" to 2003, or they can defer purchase until early next year.
NOC makes warplanes and electronic warfare systems. The stock has many planets in Cancer, so Jupiter's departure from this sign is unfavorable. Saturn will cross the 28° Gemini Sun through the first quarter of 2003, so these shares will likely lag the market.
BA just benefited from the passage of Jupiter over its MC-Pluto conjunction. The aspects are a bit less favorable from here, so BA will not likely be as strong as it has been. |
