WallStreetWeather.net Forecast For Week Of December 20, 2009

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Summary Of Last Week’s Influences:
Last week’s events primarily emanated from Wednesday’s New Moon in Sagittarius that made contacts to every planet except Mercury.

With the New Moon conjoining his Sun in Sagittarius, TIME magazine named Federal Reserve Chairman Ben Bernanke “Person of the Year” Wednesday, the same day the FOMC kept monetary policy unchanged but reiterated in its announcement when the Fed would end its special liquidity programs and stop buying agency MBS. Sagittarius is ruled by Jupiter, the planet of expansion. With his Sun in Sagittarius opposite Jupiter in Gemini, Bernanke believes that the only way to expand the economy is to create an economic environment of ultra low monetary policy and excess liquidity that will push investors to go further out on the risk curve to seek yield.

Jupiter and Sagittarius rule academia. The former Princeton professor takes pride in being a scholar of the Great Depression, yet Bernanke’s chart reflects that even if he never studied the Depression it is his nature to engage in policies that promote excess because of his Sagittarius Sun opposing Jupiter.

He exaggerates when he says “we came very, very close to a depression. The markets were in anaphylactic shock,” believing that the actions he took during the financial crisis is “a lot better than where we could be.”

With several planets in fire and none in the practical earth element, Bernanke is a true firestarter. He continued to expand Greenspan’s bubbles. And when they burst he was lauded for putting out the flames of the fire he had turned into an inferno.

Bernanke believes the politicians and the public who are disgusted with him and the Federal Reserve are just angry about the Fed’s bailouts when the real issue is that many members of Congress have had enough of the Greenspan/Bernanke philosophy of creating asset bubbles that burst and cleaning them up later.

As I wrote last week, by a vote of 16-7 Bernanke’s nomination to a second term as Fed Chairman passed the Senate Banking Committee, with Richard Shelby, the ranking member among the Senators voting no. A vote by the full Senate has not been scheduled and is already being blocked coming to the floor by a couple of Senators from both parties. With Jupiter conjoining Neptune, rumors began circulating last week that the rising opposition will force Bernanke to withdraw his nomination. A couple of Senators have said they’d like to replace Bernanke with former Federal Reserve Chairman and current Chairman of President Obama’s Economic Advisory Board Paul Volcker who is respected on both sides of the aisle. I couldn’t agree more! From a planetary perspective, there is potential for this to happen. At a minimum, Volcker looks to be having an expanded role in shaping financial regulatory reform in 2010.

Volcker has been outspoken lately about the damage that Wall St’s financial innovation has done to the economy. Volcker would like to see commercial banking separated from investment banking. On Wednesday, Sens. McCain and Cantwell introduced a bill to repeal the 1999 Gramm-Leach-Bliley Act that repealed the Depression era Glass-Steagall Act. Mercury was retrograde when President Clinton signed the 1999 Act, raising the possibility that the bill could be repealed. Venus rules banking. Saturn conjoining the Act’s Venus in Libra and Pluto squaring it illustrates that the marriage of commercial and investment banking has been self destructing and needs to die so it can reincarnate in a different form.

The New Moon squaring Uranus in Pisces raises the potential for defiant behavior. The New Moon squared and Uranus conjoined Iran’s natal Mars, increasing the potential for aggressive actions. On Wednesday Iran test fired an “optimized” version of its Sajjil-2 missile with a 1200 mile range. Crude oil rose Friday after the Iraqi government said Iranian troops seized an oil field along Iraq’s southeastern border with Iran.

Last month’s New Moon revealed more evidence against cholesterol drug Zetia. Under the Sagittarius New Moon, an FDA advisory panel overwhelmingly recommended the FDA approve Crestor for men 50+ and women 60+ who have normal cholesterol levels and no heart disease risk but have an elevated level of C-reactive protein. Their recommendation was based on AstraZeneca’s (AZN) Jupiter trial. Crestor costs $1,900 a year retail. 25 patients would have to be treated just to potentially avoid 1 cardiac event. To put it bluntly, 24 people would have to suffer the needless adverse effects of statins just so one person might be protected.

Summary Of This Week’s Influences:
An abbreviated holiday week is not the only reason that trading will substantially slow down. Mars, the planetary energy of action, appears from Earth’s vantage point to turn retrograde today until March 10, 2010. Mars is in Leo, the sign of speculation. Trading volume tends to slow down and it will become more difficult for the stock market to continue making new 52 week highs. At best, the major indices will drift sideways. However, it is more likely that the market exhibits difficulty holding onto the huge gains made from the early March lows.

On Monday Jupiter and Neptune make their third and final conjunction in Aquarius. Jupiter represents excess as in the Fed taking interest rates down to zero. As the ruler of the oceans, Neptune combined with Jupiter provides plenty of liquidity. Neptune rules social programs which the Fed and the government have provided not only for financial institutions, but insurance and auto companies. Neptune rules bubbles and inflation, and Jupiter conjoining Neptune has created a giant asset bubble in stocks, commodities, bonds, and betting against the dollar.

Government lending and stimulus programs end in the first quarter of 2010, along with the Fed’s agency MBS buying. Congress will pass sweeping financial regulatory reforms, and interest rates will rise much sooner than Wall St. believes. Economic conditions will continue to improve, but the stock market already reflects the most optimistic projections have been priced in. Jupiter conjoining Neptune was like an oasis in the desert. Now that it’s over, it will seem more like a mirage.

Jupiter rules religion, Neptune beliefs, and Aquarius represents pooled investments such as exchange traded funds (ETFs) and mutual funds. Aquarius especially reflects socially responsible investing (SRI). So it seems fitting that FaithShares, a group of five different religious ETFs (Catholic, Christian, Baptist, Lutheran, and Methodist) will ring the opening bell at the NYSE Monday. (Jupiter conjoining Neptune also reflects the huge management fees SRI funds charge investors to feel good about what they’re investing in.)

Leo rules gold. Since Mars entered Leo October 16, gold has soared from $1,050 to a record nominal high of $1,217 December 3. Since then the dollar has strengthened and gold has declined almost every day to close Friday at $1,110. Gold usage remains weak. Gold’s enemy is a strong dollar and higher interest rates as the metal’s carrying costs becomes too expensive to own relative to other investments. Mars retrograde decreases the probability that gold will bounce back and exceed its December 3 high.

The Winter Solstice occurs at 12:47 PM EST Monday when the Sun enters Saturn-ruled Capricorn. In the USA, Mars rules the Solstice chart and is located in the sector of financial speculation and forms a challenging alignment to Saturn square Pluto. The global risk trade slows down. The chart for Thursday’s First Quarter Moon in Aries conveys a similar energy to the Winter Solstice chart.

Spending becomes more cautious and restrained as Venus (money/banking) enters Capricorn until January 18. Mercury, the planet of communication, movement, and commerce will turn retrograde in Capricorn early Saturday until January 15. During Mercury retrograde it’s important to put the re prefix in front of everything you do: reconfirm, rethink, renegotiate, repair, revise, redo, reconnect, reinvent, retry, etc. Reconfirm all travel plans and allow extra time to reach your destination.

Mercury and Mars retrograde at the same time emphasize the slowdown and choppy/sideways trading to reversals of market trends in place prior to retrograde. Mercury and Mars are in a stressful alignment to each other during this time, emphasizing that thoughts and actions are subject to readjustment.

I will write a post on the Winter Solstice tomorrow and more on Mars and Mercury retrograde by midweek. I’d like to wish all Wall Street Weather readers a joyous and peaceful holiday season!

Monday, December 21, 2009

Tuesday, December 22, 2009
Positive in the morning, then becomes choppy/mixed before declining in the afternoon.

Wednesday, December 23, 2009
Choppy/mixed; negative trend bias.

Thursday, December 24, 2009
The Sun conjoining Pluto and squaring Saturn exerts downward pressure, keeping the indices in a tight range between negative to choppy/mixed to slightly positive. The stock market closes at 1:00 PM for the Christmas holiday.

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