Brokers Eating Crow

The big boys – Goldman Sachs, Merrill Lynch, etc. are adjusting their taste palates from steak to crow. The day after MER dropped its forecast for the Federal Reserve to cut interest rates this year, GS announced yesterday that they are dropping their call for the FOMC to cut by 75 basis points to leaving rates unchanged.

My forecast for yesterday was basically that good news would create a “more bullish market as the day progresses” due to the Sun’s alignment to optimistic and expansive Jupiter. The May ISM Services came in higher than expected, showing 12 of 15 industries expanding last month. However, Street math works like this: Good News = Rates Unchanged or + = - Money For M&A/PE = Less Fat Fees.

Every planetary energy has a flip side. Jupiter as the largest planet in our solar system does everything in a Big way, so any unfavorable news will make a reversal larger. As June progresses, Uranus, the wildcard energy will bring unpredictable trading patterns, especially from June 15 (Options expiration) onwards. Add Mercury, planet of communication, retrograde (see next Post) from June 15-July 9, AND the final alignment of Saturn/Neptune on June 25 (the prior one was Feb 27), and you get the idea that the market going forward is only for those who love volatility or are long-term investors.

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