WallStreetWeather.net Forecast For Week Of June 29, 2009

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Summary Of Last Week’s Influences:
Last week opened bearish as the World Bank’s downgrade of GDP growth had the same effect as when the IMF lowered its economic growth forecast one week prior.

The Federal Reserve’s statement Wednesday reiterated its intention to keep rates at its “exceptionally low levels for an extended period,” since the Fed “expects that inflation will remain subdued for some time.” Bernanke tried to calm the bond market by saying the Fed will “make adjustments” to its credit and liquidity programs “as warranted” to show he has an exit strategy. The problem is that few people believe him. The following day the Fed announced it would extend its lending programs for the commercial paper market (CPFF & AMLF) through February 1, 2010, while reducing the size of its TAF auctions noting that conditions in wholesale funding markets have improved.

With the Sun opposite Pluto falling on the Fed’s natal Sun opposite Pluto, scrutiny has turned to the Fed’s secretive (Pluto) actions taken during the financial crisis, and specifically by the Chairman (Sun). Ben Bernanke got grilled for just over three hours on Thursday by the House Oversight and Government Reform Committee over the Fed’s involvement in pushing Bank of America (BAC) to complete its agreement to purchase Merrill Lynch.

Discontent with the Fed Chairman is growing on both sides of the aisle, but the Street is pushing for Bernanke’s reappointment because he is against the Obama Administration’s plan to create a new Consumer Financial Protection Agency that would take away the Fed’s authority to regulate consumer financial products. With bank fees comprising 53% of the industry’s income in 2008 vs. 35% in 1995, you can understand why Wall St. wants someone who solely supports the industry. The Fed should be audited on all its special lending programs, but despite the damage caused to the economy by its current and former Chairman, it is necessary that the central bank retain its independence.

In last week’s Forecast I wrote that “anecdotal reports of economic contraction” would keep the market lower on Friday. Quantas canceled its order for 15 Boeing (BA) Wet-Dreamliners and is delaying delivery on 15 more. Economic reports supported the premise of my post on “Wall Street and the Consumer in Parallel Universes”, as the personal savings rate in May was the highest since December 1993. And it appears that the slight boost in personal income was due to a onetime gain of stimulus checks to seniors. People rebuilding their balance sheets is vital to rebuilding a healthy and sustainable economy, but the market’s reaction shows it is not ready to face that reality. While the University of Michigan’s Consumer Sentiment was the highest since February 2008, the boost came from current expectations, as people’s future economic expectations were lower. This is downbeat news for markets that are always focused on the road ahead.

Summary Of This Week’s Influences:
“Expected the unexpected” this week as Uranus in Pisces turns retrograde* on Wednesday until December 1. The planet symbolizing independence and eccentricity is pronounced June 26 through July 6, just in time to celebrate U.S. Independence Day. Uranus in Pisces is out to shake the world up from its slumber of outmoded beliefs as it dissolves preconceived barriers of separation. This is particularly taken to a personal level while Uranus is retrograde. (As Uranus again approaches opposition to Saturn in Virgo in September, this will become even more evident.) Pisces and its planetary ruler Neptune represent the interconnectedness of all things. For example, the housing bubble could not have happened without the participation of individuals, realtors, appraisers, lenders, institutional investors, politicians, and government regulators – especially the Federal Reserve.

The interconnectedness between Uranus and Pisces and Neptune in Uranus-ruled Aquarius is dominated by Jupiter again conjoining Neptune in Aquarius. Neptune represents illusions, and Jupiter is expanding that. With such a short time span between the first Jupiter/Neptune conjunction on May 27 and the next one occurring on July 10, Bulls hope the market is just resting in a sideways position until second quarter earnings news propels the indices higher. Venus (July 1-2) and Mars (July 6) in stubborn and slow moving Taurus will be challenging Jupiter/Neptune just before their next conjunction. Mars is action; Mars in Taurus might decide it’s time to at least take some gains off the table. As an earth energy, Taurus recognizes that a profit is not real unless the money has been deposited into their bank account. As Jupiter and Neptune begin moving apart, the market’s optimism might begin to wane.

It could be a wild Wednesday with Uranus turning retrograde and Mercury in Gemini challenging Uranus could bring some shocking news. These energies can make people jittery and highly excitable. Focus on one thing at a time to keep your mind clear of clutter. Ensure that all electrical devices are fully charged and back up files, as these energies can bring electrical and computer system disruptions/outages. Freaky weather conditions (these energies create high winds) could suddenly arise that create travel delays. Mercury harmonizing with Jupiter and Neptune can inject some humor and creativity to work around any inconveniences. With Venus challenging Neptune today, there could be unrealistic expectations about money and love. Inflation could be a concern.

The abbreviated holiday week begins with the First Quarter Moon in Libra, symbolized by the scales of justice. Even if Bernie Madoff receives the justice he deserves (the government’s recommended 150 years in prison) Monday morning, I believe that Madoff did not completely act alone. The scales will not be balanced until the people who assisted Madoff face justice as well.

Monday, June 29, 2009
Mostly choppy/mixed as market swings indecisively from negative to positive. (Now I sound like I just attended the Alan Greenspan School of Communication!) :-)

Tuesday, June 30, 2009
Negative trend bias.

Wednesday, July 1, 2009
Uranus turning retrograde and other planetary pair ups create mixed signals that could create more volatility in either or both directions, but tendency is toward the downside that may have a late day turnaround.

Thursday, July 2, 2009
Positive trend bias.

Friday, July 3, 2009
Market closed for Independence Day tomorrow. Mercury enters Cancer until July 17. Thoughts and news focus around food, real estate, and economic and physical security. Mercury opposes Pluto in Capricorn which can create disagreements over debt issues, as well as geopolitical tensions over nuclear issues and state secrets.

*Planets do not really move backwards, but appear to from Earth’s vantage point.

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