WallStreetWeather.net Forecast For Week Of December 13, 2009

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On Monday the Sun in Sagittarius challenges Uranus in Pisces and also aspects Jupiter and Neptune in Aquarius. Sagittarius is ruled by Jupiter and Aquarius is ruled by Uranus. Together these planets reflect the cycles of Saturn opposite Uranus (2008-2010) and Jupiter conjoining Neptune in Aquarius this year.

Uranus is the planetary energy of extremes and sharp and sudden price movements. The stock market went from making a twelve year (one Jupiter cycle) low in early March to the opposite extreme where certain asset prices have now entered bubble territory.

Saturn rules government. The first two oppositions of Saturn and Uranus (November 4, 2008 and February 5, 2009) were followed by new multiyear declines in the stock market as the government became more deeply involved in financial institutions. By spring, markets went from being spooked by the government’s involvement in the financial (and auto) sectors to reaping the rewards provided by government guarantees, stimulus programs, and zero interest rates.

Jupiter represents expansion and optimism and Neptune represents beliefs and bubbles. With both planets exactly conjoining for the first time on May 27 in futuristic Aquarius, the “ocean of liquidity” provided by the government and the Federal Reserve was the rocket fuel needed to send stocks, bonds, and commodities soaring as if the economy was on fire. Each time it appeared that the hot air balloon could come crashing to the ground, the Fed would reiterate that “rates were likely to remain low for an extended period of time” and the government would institute another round of stimulus in one form or another. The impetus was so strong that when Saturn and Uranus made their third opposition on September 15, the indices went on to make fresh 2009 highs the following month. (Rather than the stock market retreating, Mercury retrograde during September ended up reversing the prior outcomes of Saturn opposite Uranus.)

To paraphrase the title of an article in last Monday’s Wall Street Journal, the bull market is exhibiting some signs of aging as the cycle of Jupiter conjoining Neptune comes to a close.Venus in Sagittarius harmonizing with Mars in Sun-ruled Leo this week continues the party now, deal with the tougher issues later attitude.

The Sun and Leo rule speculation. Mars in Leo turns retrograde December 20 until March 10 and Mercury is retrograde December 26 to January 15. Retrogrades can reverse trends as communications (Mercury) and actions (Mars) get reexamined. Jupiter and Neptune will conjoin for the final time on December 21, the same day the Sun enters Capricorn. From December 25 when Venus enters Capricorn until January 18, there will be four planets in Saturn-ruled Capricorn. At a minimum these energies could put the brakes on the market making new highs.

While Jupiter’s energy is expansive and optimistic, Saturn is more realistic and grounded in fundamentals. Saturn is in Libra now, seeking to balance what has become out of balance. Saturn’s energies will be particularly prominent in January as it turns retrograde January 13, two days before a Solar Eclipse in Capricorn that conjoins the USA Pluto which is located in the sector of the USA chart representing the financial system. The eclipse occurs the same day Mercury turns direct in Capricorn. At the end of the month, Saturn will square Pluto for the second time.

One thing that’s certain in 2010 is that interest rates can only go up from here which will burst the bond, gold, oil, and dollar carry trade bubbles. The deflationistas are in for a rude awakening in 2010 unless the Fed starts taking action now to gradually raise rates and rein in excess liquidity.

Just as companies and individuals who like Saturn’s infamous rings lived beyond the boundaries of their incomes, in 2010 we will see the fallout if Washington still fails to grasp Saturn’s lessons of fiscal discipline required to reform (Uranus) and transform (Pluto) the nation’s financial, healthcare, energy, infrastructure, and military.

The Moon (sentiment) will be in Sagittarius for the first half of the week, conjoining the Sun (New Moon) early Wednesday. The nation is feeling optimistic that economic conditions and their personal circumstances are improving. Wednesday’s CPI could come in higher than expected.

Sagittarius rules foreign matters. The Sun and Moon in Sagittarius squaring Uranus in Pisces (creditors) will put the focus on Dubai World’s $3.52 billion Nakheel bond maturing Monday. Saturn squaring the UAE’s Venus in Capricorn indicates Dubai as well as the federation itself will seek to delay payment to creditors, pushing banks to negotiate a deal. On December 21, 100 bank creditors are scheduled to meet with Dubai World officials for restructuring talks.

The Fed and its Chairman will be the focus on Wednesday when the FOMC releases their statement on monetary policy following a two day meeting. The Fed is unlikely to make any meaningful changes to their November 4 statement. On Thursday the Senate Banking Committee is scheduled to vote on confirming Ben Bernanke to a second term as Fed Chairman before his nomination goes to the full Senate for a vote. The Committee will likely approve him, but Bernanke’s confirmation faces further delays and obstacles.

Monday and Wednesday look to be the biggest moving days in a market that is starting to stall out, creating choppy conditions.

Monday, December 14, 2009
Positive bias, but Uranus can create unexpected surprises that can take the market in either or both directions.

Tuesday, December 15, 2009
Slightly up early then becomes choppy/mixed to negative.

Wednesday, December 16, 2009

Thursday, December 17, 2009
Negative trend bias; choppy/mixed conditions (strongest in the late morning).

Friday, December 18, 2009
(Quadruple options expiration.) Choppy/mixed to moderately positive.

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