WallStreetWeather.net Forecast For Week Of September 7, 2009

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Summary Of Last Week’s Influences:
Contrary to an “overblown reaction” to the downside Friday, the market reacted positively to the August employment report, although less enthusiastically than some pundits would have expected.

The good news is that job losses are showing signs of moderating even though payroll losses for June and July were revised upward. The media primarily focused on the higher than expected increase in the unemployment rate to 9.7%. The unemployment rate will likely continue to climb as economic conditions show signs of gradual improvement, as more people become motivated to seek employment opportunities after previously giving up.

Analysts and economists are starting to declare that August marked the end of the recession began in December 2007. The sharp run-up in equities since early March reflects these expectations have already been baked into the cake. The market is just now coming round to realize that consumer spending which comprises at least 70% of the U.S. economy, is not going to rebound anytime soon. Saturn in Virgo reflects that a reduction in the workforce cuts or reduces consumers’ ability to spend much beyond the basics needed for daily living. With Pluto (debt) in Saturn-ruled Capricorn until 2024, consumers will restrain excess spending to pare down or pay off their debt. Consumer spending will improve slowly over time but it will be with a “less is more/quality is better than quantity” mentality.

Venus (monetary value) entered Leo (gold) on August 26 until September 20. Since then, gold has risen over $50, with most of the gains occurring last week. After almost reaching $1,000 an ounce Thursday, September gold closed Friday at $994.60. Jewelry demand is down and scrap inventory is up, so buying comes down to fears of inflation or adverse events that cause the stock market to drop. Inflation has received little attention, but with interest rates nearly zero, there’s only one direction rates can go. With the Federal Reserve and other central banks as well as the G20 finance ministers making it clear that interest rates and special lending and stimulus programs established during the financial crisis are not going to go away anytime soon, many investors fear central banks will be too slow to react as the economy heats up.

Summary Of This Week’s Influences:
Labor Day is celebrated the first Monday in September when the Sun (self-identity) is in Virgo (workforce), creating a shortened work week.

Mercury, the planetary energy of communication and movement turns retrograde on Labor Day until September 29. Financial markets tend to get erratic during Mercury retrograde, and this period is exceptional.

Congress returns Tuesday from their August recess to face a very crowded legislative agenda that for the most part involves addressing established issues which is best suited for Mercury retrograde.

Wednesdays are ruled by Mercury, and President Obama will address a joint session of Congress to articulate his message for healthcare reform. With Mercury retrograde, it would be appropriate if President Obama keeps it simple by stating that healthcare reform will remove health insurance companies’ ability to reject you or your claim for any reason.

As Mercury turned retrograde at the beginning of the week, Pluto moves direct on the day of the Last Quarter Moon in Mercury-ruled Gemini.

Tuesday, September 8, 2009

Wednesday, September 9, 2009
Choppy/mixed to negative trend bias starts improving in final two hours.

Thursday, September 10, 2009
Choppy/mixed to positive trend bias.

Friday, September 11, 2009
Volatile; could see large moves in either or both directions as the market’s sentiment is overdone. (Most likely to the downside.)

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