WallStreetWeather.net Forecast For Week of July 13, 2009

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Summary Of Last Week’s Influences:
Venus (money) entered dualistic Gemini early Sunday morning, and talk of a second economic stimulus package became the topic du jour on the Sunday morning talk shows. (Never mind that only 10% of the original $787 billion stimulus has been put to work.) Financial markets became worried on Tuesday after Laura D’Andrea Tyson, an Obama economic advisor and former Chairman of the White House Council of Economic Advisors during the Clinton administration, advocated the U.S. should start planning for a second stimulus. Born with Venus in Gemini and the Sun (self-identity) in Cancer conjoining the USA’s natal Jupiter, it’s not surprising that Ms. Tyson advocates expanding government spending and is not the least concerned about inflation!

Neptune rules oil; Mars in Taurus challenging Jupiter and Neptune on Monday began a rapid selloff in crude that closed down 10% for the week to $59.89 a barrel. Oil was driven down by two issues: rising inventories in a weak economic climate and the CFTC proposing to crack down on speculation. Venus in Gemini is very changeable about financial matters; exactly one year ago the CFTC told Congress there was “no evidence” speculators were bidding up crude prices. The truth is that the Federal Reserve’s overly accommodative monetary policy (low interest rates and E-Z money) encourage reckless speculation.

Tuesday’s Lunar Eclipse in Capricorn opposed the USA’s natal Cancer Sun and challenged the USA Saturn. This brought some sobering statistics concerning consumer economics. The American Bankers Association reported that credit card and home equity lines of credit delinquencies hit a record high in the first quarter of this year. June same store sales were lower for the tenth consecutive month and the University of Michigan’s consumer sentiment gauge was lower as well.

Jupiter and Neptune conjoined for the second time on Friday. Unlike their first conjunction on May 27 that represented excessive optimism and hope that “green shoots” had sprouted, Neptune turning retrograde* May 29 followed by Jupiter on June 15, has brought a big dose of introspection over the fantasy of the economy turning the corner versus reality.

The period between the eclipses and the second Jupiter/Neptune alignment occurring in between represents a malaise where it can be difficult to move forward. Not all the facts are evident so sentiment fluctuates rapidly; emotions run high as people tend to stubbornly cling to their most ingrained ideologies. That will likely change in late August.

Summary Of This Week’s Influences:
Venus (July 5-31) and Mars (July 11-August 25) in Mercury-ruled Gemini tend to bring a lot of talk and calls for policy actions on multiple fronts. News can be contradictory; is it gossip or fact?
Banks will begin to report second quarter earnings this week, including “superTARPED” Bank of America (BAC) and Citigroup (C), as well as JPMorgan Chase (JPM), and “bank holding company?” Goldman Sachs (GS).

Congress will hold hearings on whether or not hedge funds should be regulated. That should have happened in 1998 when the Fed bailed out Long Term Capital Management! And just last week LTCM founder John Meriwether announced he is shutting down his Relative Value Opportunity II fund due to heavy losses. But with his natal Sun, Venus, Saturn, and Pluto in speculative Leo challenging Jupiter in Pluto-ruled Scorpio, you can bet it won’t be long until he’s back with yet another fund for masochistic investors.

Other hearings will be about the creation of a Consumer Financial Protection Agency, and other aspects of the Obama Administration’s financial regulatory overhaul. For all of Wall Street’s resistance to creating a consumer regulator, the origins of the idea are in former Treasury Secretary Paulson’s Blueprint for regulatory structure. Why would the former head of Goldman Sachs care at all about consumers? Because as we have witnessed, exotic consumer financial products created systemic risk.

After hearing testimony from Ken Lewis and Ben Bernanke, Hank Paulson will appear before the House Oversight Committee’s hearing on the government’s role in the Bank of America/Merrill Lynch merger on Thursday.

Monday, July 13, 2009
Negative trend bias.

Tuesday, July 14, 2009
Swings from choppy/mixed to positive.

Wednesday, July 15, 2009
Negative early; starts improving around midday/early afternoon and turns upward going into the close.

Thursday, July 16, 2009
Positive but begins to deteriorate approaching the close.

Friday, July 17, 2009 (Options Expiration)
Market strongest in afternoon.

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

No disclosures.

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