WallStreetWeather.net Forecast For Week Of August 10, 2009

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Summary Of Last Week’s Influences:
A favorable alignment between Mercury in Virgo and Venus in Cancer Friday brought pleasant financial (Venus) news (Mercury) that fewer workers (Virgo) lost their jobs than expected in July. Hours worked and average hourly earnings increased slightly. The DJIA and the S&P500 closed Friday at new highs for the year, but the NASDAQ failed to top the high it made earlier in the week.

While Friday’s employment report was certainly a favorable development, looking at the “numbers behind the numbers” warrants a more cautious interpretation. The Unemployment Rate dropped from 9.5% to 9.4% as the separate household survey showed that the number of people who gave up looking for work (422,000) exceeded the number of jobs lost (247,000). 1 in 3 workers (5 million) were unemployed for 27 weeks or more.

Summary Of This Week’s Influences:
Volatility and larger price movements are likely to heat up this week as fast-acting Mars interacts with Saturn in Virgo on Monday and Jupiter in Aquarius on Thursday.

Mars in Gemini tends to react quickly to information, as it represents acting on multiple issues. With the Moon (sentiment) in Mars-ruled Aries Monday, the desire to act quickly will be challenged by cautious Saturn that tends to put the brakes on moving forward. In the stock market this energy is likely to hit a roadblock.

As Mars and Saturn are in signs ruled by Mercury, communication and travel delays are possible. The internet and other data feeds could run slower or access could be temporarily blocked. Disagreements over contractual agreements could arise.

Mars challenging Saturn can bring frustrations dealing with superiors and governmental authorities. On Monday Bank of America (BAC) and the SEC will have to explain to U.S. District Judge Jed S. Rakoff at a court hearing how BofA without admitting or denying any wrongdoing, agreed on August 3 to pay the SEC a $33 million fine to settle a civil lawsuit for failing to disclose in the BofA/Merill Lynch merger proxy filing that BofA had agreed that Merrill could pay up to $5.8 billion in bonuses to certain Merrill executives. Judge Rakoff also wants to know if the $33 million is coming from the $20 billion Fed Chairman Bernanke and former Treasury Secretary Paulson agreed to provide BofA to consummate the merger with Merrill.

Mars and Saturn are affecting BofA CEO Ken Lewis’ natal Mercury in Pisces,* along with SEC Chairman Mary Schapiro’s Mercury and Sun in Gemini, indicating the two have a lot of explaining to do. As I wrote in a post last year, Mars challenging Saturn when the SEC was founded “inhibits its ability to take action.” Unlike other bank regulators, the SEC must turn over the $1 billion plus it earns in transactions fees** every time a security is bought or sold, to Congress who must appropriate its budget every year. Mars/Saturn challenging Chairman Schapiro’s Sun and Mercury in Gemini reflects her dual frustration at not having the appropriate resources or authority (Saturn) to take serious and aggressive action (Mars) against securities violations.

The Treasury will auction a record $75 billion this week: $37 billion in three year notes on Tuesday, $23 billion in 10 year notes Wednesday, and $15 billion in 30 year bonds on Thursday. But the big afternoon event this week will be Wednesday’s FOMC announcement.

Now that the biggest banks are rolling in the profits, it is likely that the Fed will de-emphasize extending the Treasury purchase program and purchase of agency MBS. In keeping with the planetary influences this week, it would be interesting if the phrase “dual mandate” was incorporated into the FOMC announcement. With Mars and Saturn challenging his natal Sun and Jupiter now, Bernanke is under pressure to defend his economic philosophy that partially conflicts with the Administration’s regulatory reform proposal, along with resisting the growing call to have the GAO audit all of the Fed’s special lending programs and their financial arrangements.

The Leo Sun opposite Jupiter on Friday can be overconfident, creating a clash of egos (along with a tendency to exaggerate and overspend). Friday’s CPI could show inflation higher than expected, echoing July Personal Spending that was higher due to an increase in food and energy costs.

Monday, August 10, 2009
Selling pressure keeps market in negative territory.

Tuesday, August 11, 2009
Choppy/mixed; swings from moderately down to moderately up for most of the morning before turning negative.

Wednesday, August 12, 2009
Negative, but begins to improve in late morning to early afternoon and turn choppy/mixed to moderately up.

Thursday, August 13, 2009
Positive; rapid gains as morning progresses but profit taking could cause market to begin to weaken in mid afternoon.

Friday, August 14, 2009
Volatile; large moves in either or both directions, but tendency is to the downside.

*Shareholders in April voted to strip Lewis of his position as Chairman. The House Oversight Committee is extending its investigation of the BofA/Merrill merger after a Wall Street Journal article last week described an email sent by BofA’s Chief Accounting Officer to top executives two days before the December 5 shareholder vote that Merrill’s Q4 loss projections had increased by $2 billion.

**This is not a transaction fee but in essence a tax payable to Congress who ensures that wrongdoing is not properly prosecuted at the expense of investors.

Mary Schapiro: June 19, 1955 time unknown New York, NY

No disclosure.

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