WallStreetWeather.net Forecast For Week Of July 6, 2009

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Summary Of Last Week’s Influences:
A light volume holiday week and Uranus turning retrograde* brought some unexpected surprises that shook up the stock market. After the indices posted their best quarterly performance since the fourth quarter of 2003, more analysts are coming to believe that the market got a bit ahead of itself.

Uranus is futuristic, or what the market calls a leading indicator. Employment is viewed by the market as a lagging indicator as companies are reluctant to hire until after their business begins to show evidence of sustainable growth. With the “shock and awe” energies of Uranus dominating last week, the market was surprised that the jobs lost in June was about 100,000 more than the market anticipated. Saturn represents contraction, and Saturn in Virgo since September 2007 represents contraction in the workforce. Since the NBER officially declared that the recession began in December 2007, the number of unemployed since then has increased by 7.2 million. It is unlikely employment will begin to grow until Saturn leaves Virgo in July 2010.

The key piece of data from the June payroll report is that the average workweek dropped to 33 hours, the lowest level since data began to be recorded in 1964. This reflects companies retaining workers but reducing their hours. Less hours = less income, and less income = less money for discretionary spending. Another factor is that if a worker’s hours get reduced to part time status their healthcare coverage could be in jeopardy.

I had written in last week’s Forecast that Uranus retrograde could bring “computer system disruptions/outages.” The NYSE remained open until 4:15 PM Thursday in order to ensure that all orders were processed after “system irregularities” caused several stocks to be halted just after 10:30 AM for five minutes due to a technical glitch in the exchange system’s network. According to CNBC, all extended session trades at the NYSE had to be processed manually.

Uranus relates to rebellious and unconventional behavior. As Uranus represents sharp and rapid price spikes (in either direction), the transit since 2003 of Uranus in Pisces has brought sharp swings in the price of oil. WTI Crude hit an 8 month high of $73.38 on the futures market in the early morning on Tuesday following Brent oil’s spike from $71 to $73.50 in one hour after contracts for more than 16 million barrels were traded. According to the FT, that is about double the daily production of Saudi Arabia, and an extreme spike compared to the normal 500,000 barrels typically traded at that time of day. Oil was down 10% Thursday from Tuesday’s spike partly due to the fact that a “rogue” trader at PMV Oil Associates in London had accounted for at least half of the futures buying; other traders then climbed aboard thinking they must have missed some breaking geopolitical news.

Saturn in Virgo exactly conjoined California’s natal Sun (identity) on July 1, reflecting the state’s $24 billion budget deficit. Jupiter and Neptune conjoining California’s progressed** Sun in Aquarius reflect the inability of Republicans and Democrats to overcome their extreme political ideologies to make the hard choices necessary to break the budgetary impasse. This has forced California to issue its own currency in the form of IOUs.

Summary Of This Week’s Influences:
NOTE: For more information on this week’s influences, see my posts on “Eclipses and Other Planetary Pair Ups Will Bring Back The Bear Market By Autumn” and “Wall Street and the Consumer in Parallel Universes.”

The indices reached their high for the year on June 12, the last trading day before Jupiter turned retrograde. Since then the indices have been trading in a sideways but downward trend. We are now in the period between eclipses through August 5 that tends to create unsettled conditions and reverse trends. Although Tuesday’s Full Moon is a “milder” Lunar Eclipse, the Full Moon in Saturn-ruled Capricorn raises worries about the health of the consumer and residential and commercial real estate and their underlying securities. The Lunar Eclipse affects the USA’s natal Sun in Cancer and Saturn in Libra, reinforcing the theme of growth constraints.

Meanwhile Jupiter and Neptune conjoin in Aquarius for the second time. This planetary pairing played a big role in the market’s spring run up, but with both planets retrograde and separating after Friday, their influence now can exaggerate the pessimism seeping back into the market.

On a personal level, the second Jupiter/Neptune conjunction represents a good time to ask yourself, what is your truth? Are you willing to embark on a new journey into unexplored territory in order to free yourself of the illusions that can be comforting because they are familiar yet hold you back from bringing a vision into reality? The eclipse energies relate to this theme as they highlight the issues of personal needs, security issues, family, career and public reputation.

The week begins with Mars in Taurus challenging Jupiter and Neptune. Mars challenging Neptune shatters financial illusions, especially regarding credit issues. The last time Mars in Taurus challenged Neptune in Aquarius was on July 23, 2007 when the market reacted bearishly to Countrywide’s (BAC) earnings call after CEO Angelo Mozilo told analysts that “prime is not prime.”

Alcoa’s (AA) earnings release after Wednesday’s close marks the start of earnings season which will get fully underway next week. Saturn in Virgo conjoining Alcoa’s stock chart progressed Venus, challenging its Sun in Gemini, and a Saturn return in September will tend to keep the stock under pressure during this quarter. This earnings season the markets are going to need more than numbers and projections that were “less bad” than expected to compel the markets to move higher.

President Obama will attend the G8 meeting in Italy on Wednesday where Russia plans to resume talks begun at the April G20 meeting on creating a mix of regional reserve currencies as an alternative to the U.S. dollar as the world’s reserve currency. Brazil and China will send officials to the meeting that will also be attended by India’s PM Singh. Bloomberg reports that an economic advisor to Singh is urging the government to hold fewer US dollars in India’s foreign currency reserves.

The Treasury will sell $136 billion of “junk” this week, including $8 billion in 10 year TIPS on Monday, $35 billion 3 year notes on Tuesday, and $19 billion 10 year notes on Wednesday, and $11 billion in 30 year bonds on Thursday. Bernanke could never buy enough Treasuries to make up for reduced purchases of U.S. debt by sovereign nations should they decide to act on their rhetoric.

The market has a bearish bias, particularly during the first half of the week. The strong influence of the Jupiter/Neptune conjunction is likely to bring big market moves.

Monday, July 6, 2009
Negative.

Tuesday, July 7, 2009
Negative.

Wednesday July 8, 2009
Negative, but could see improving conditions approaching the close.

Thursday, July 9, 2009
Negative to choppy/mixed conditions.

Friday, July 10, 2009
Market improves as day progresses.

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

**A mathematical calculation that moves the planets forward in time as a method of prediction.

No disclosures.

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