Weekly Forecast: February 23 – March 1, 2009

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Summary Of Last Week’s Influences:
Three months to the day, the DJIA “broke on through to the other side” of the November 20, 2008 low at 7,552.29 and took a short trek back in time to 7,365.67, its lowest close since October 9, 2002.

Saturn is the planetary energy relating to learning life’s lessons. If we fail to grasp the message of the cycle the first time, each subsequent lesson can be more difficult to digest than the preceding one. Saturn is a slow and cautious energy that tends to become fearful when faced with the unknown. Saturn also represents government and authority figures. With the Moon in Saturn-ruled Capricorn February 19 and 20, market sentiment was fearful in reaction to what certain government and other authority figures were saying. Saturn in worrywart Virgo, the sign of the accountant (Sep 2007 - Jul 2010) is about getting everyone’s balance sheets back to health, from banks, businesses, and government (HA!) to consumers. Saturn in Virgo needs to be able to analyze every minute detail of plans announced by the government - not outlines and “we’ll have more details in a few weeks.” Saturn in Virgo is being assisted in this endeavor by Pluto, the planetary energy of transformation in Saturn-ruled Capricorn (2008-2024). What is not working must be restructured (Pluto rules bankruptcy) and reformed if it is to be viable.

Since last autumn and through mid 2010, Saturn in Virgo is being opposed by Uranus, the erratic and unpredictable energy of change and innovation, in hopeful Pisces. Uranus energies create sharp and sudden record breaking price moves that can go in either direction. Uranus rules Aquarius, which is where Jupiter is spending time this year. Jupiter energies like to be expansive and optimistic, but transiting through Capricorn in 2008 and now Aquarius, tends to get reined in by Saturn’s contracting* energies. This creates big market moves that for the most part have been to the downside.

When the luminaries and the faster moving planets (Mercury/communication, Venus/finance & alliances, and Mars/action) impact the slower moving planets, things get volatile. The prelude to the escalation of the economic turmoil began with the August 30, 2008 Virgo New Moon which conjoined Saturn and opposed Uranus in Pisces. In addition, the New Moon challenged the USA’s natal Uranus in Gemini indicating that there would be some shocks and surprises in store for the US during September. Issues reached a critical point at the September 15 Harvest Moon. Three months later at the December 12, 2008 Full Moon the Detroit automakers were in financial crisis.

Almost six months have passed since the fall of Lehman Brothers, the 79.9% solutions for AIG, Fannie & Freddie, and the TARP, and what has changed? Friday’s volatile record breaking session was caused by the usual suspects – the banks and the government. Markets were already apprehensive over regulators beginning their stress tests of banks this week, when Senator Dodd said in an interview on Bloomberg TV that banks might need to temporarily be nationalized after dismissing speculation two weeks ago that Bank of America (BAC) might have to be nationalized. Markets recovered somewhat after Bank of America and Citigroup (C) reaffirmed their strong capital positions. The DJIA even briefly went positive after the White House Press Secretary stated the Administration “strongly believes in a privately- held banking system” but refused to say never on bank nationalization.

And as I’ve written, we’re now approaching the point where multiple planetary cycles are coming together.

Summary Of This Week’s Influences:
Just like six months ago, Tuesday’s New Moon in Pisces challenges the USA Uranus, creating shocks and surprises. In the USA, the New Moon, Mars, and Neptune fall in the area representing financial speculation and matters of the heart/stress test. Wall Street continues to react to what Washington says and does. And just like last autumn, volatility is likely to reach its height around the March 10 Full Moon in Virgo that emphasizes the energies of the Saturn/Uranus opposition, along with the USA’s natal Mars in Gemini challenging Neptune in Virgo. Additionally and as explained in my post on “Aspects Further Stressing the Banking System,” in early March Pluto in Capricorn will oppose the USA’s natal Venus (banking system) at the same time Venus in Aries turns retrograde. With all this happening at once, if the government was going to “nationalize” any banks, March would be the most likely time. Nouriel “Dr. Doom” Roubini thinks it would happen six months from now. That’s when Saturn and Uranus will be in exact opposition at the time of the September 18 Virgo New Moon. (More on my thoughts about bank nationalization in a separate post.)

In the February 2 Forecast I posed the question of what would happen if other nations didn’t want to buy all the debt we’re creating. Although I was wrong (so far) about the Treasury auctions, I think my timing will turn out to have just been a bit premature. Bloomberg is reporting that Secretary of State Clinton is in Beijing begging China to continue as the number one buyer of US government debt. Whether it’s through rising prices or through lack of Treasury buyers, one way or another as I wrote last June, inflation will arrive by May 2009.

As long as Washington continues to operate in the ad hoc, vague, and confusing fashion that began with the previous Administration’s handling of the financial crisis, Wall Street will continue to trend to the downside that is likely to be accentuated during the times the above described planetary energies interact.

Monday, February 23, 2009
The Moon in Aquarius today can create erratic and unexpected conditions. The influence of Mercury conjoining Jupiter represents news that can create large market moves in either direction today and tomorrow. Choppy to positive trend bias could find indices up early in session, then could weaken and turn negative in late morning. Improving conditions in early afternoon could weaken before the close.

Tuesday, February 24, 2009
The Moon in Neptune-ruled Pisces today through Thursday can inspire hope that things are better than they appear, but just as easily create confusion and uncertainty. Market strongest early and weakest in afternoon.

Federal Reserve Chairman Bernanke gives his semi-annual monetary policy testimony to the Senate Banking Committee at 10 AM. The New Moon occurs at 8:35 PM EST, less than a half hour before President Obama gives his first State of the Union address.

Wednesday, February 25, 2009
Negative trend early could give way to choppy/mixed to improving conditions as day progresses.

Thursday, February 26, 2009
Unsettled/volatile to negative trend bias, but could see late day improvement. The Administration is scheduled to release their budget proposal today.

Friday, February 27, 2009
Moon enters action-oriented Aries. Choppy to negative trend early could give way to buying, although could weaken going into the close.

*Aquarius expresses the energies of Saturn and Uranus as Saturn was its planetary ruler before Uranus was discovered in 1781.

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