WallStreetWeather.net Forecast For Week Of January 11, 2010

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Summary Of Last Week’s Influences:
The Sun represents self-identity and Capricorn rules high places such as mountains. The Sun conjoining Mercury in Capricorn last Monday marked the opening of the Burj Dubai, the world’s tallest tower (2,717 ft). With Mercury retrograde, the tower was immediately renamed the Burj Khalifa in honor of U.A.E. president Sheikh Khalifa bin Zayed al-Nahyan, the ruler of Abu Dhabi who gave a second bailout loan to help alleviate Dubai’s $100 billion debt mountain. As The Economist points out, “skyscrapers have long been associated with the ends of financial booms.”

The choppy and “see saw” trading I described in last week’s Forecast certainly reflected last week’s market behavior as Monday was the only day the indices moved in one direction all day as “investors gained renewed faith in the global economic recovery,” according to The Wall Street Journal (italics mine). Mercury conjoining Venus did indeed bring out “the feel good factor.”

Many analysts expected December’s employment report would show jobs being added to nonfarm payrolls instead of a reported loss of 85,000 jobs. November nonfarm payrolls were revised from -11,000 to a gain of 4,000 jobs. Even accounting for such wide revisions, the employment picture reflects that fewer jobs are being shed each month. A steady increase each month in temporary workers (+46,500) is viewed as a precursor to permanent hires. Sustainable employment growth should begin to appear later in the third quarter.

As I’ve written before, Wall St. and Main St. are in parallel universes. Wall St. wants a jobless recovery so the Fed will keep interest rates at zero and financial markets can party on. Each week there are more signs that Wall St. is returning to its pre-crisis behavior. Yesterday’s Wall Street Journal reported that super-TARPED Citigroup (C) and former “TARP babies”* JPMorgan Chase (JPM), Bank of America (BAC), and Morgan Stanley (MS) are offering hedge funds leverage again. Citi is even calling up hedge funds to ask if they want to borrow money as they believe the stocks and bonds hedge funds put up as collateral are a safer risk than lending to small businesses and consumers. Loading up leverage for deal making has also made a comeback.

Wall St. would freak out, but I believe financial reform should prohibit or at least institute high margin requirements. Leverage exaggerates the market’s rise as well as its fall when securities must be sold to meet margin calls.

Is what happened during the fall of 2008 already too far away to remember?

Summary Of This Week’s Influences:
Planets giving the appearance of changing direction from Earth’s vantage point symbolize shifts in consciousness which can also reflect a shift in market sentiment.

Saturn represents caution, fear, pessimism, and accountability. As Saturn appears stationary in the sky all week as it turns retrograde on Thursday, the lord of the rings could not only put the brakes on stocks moving higher but increase the potential for the market to fall.

Saturn rules Capricorn. With the Moon (sentiment) in Capricorn from late Tuesday night until midday Friday afternoon and Mercury moving direct in Capricorn on Friday just hours after the Capricorn Solar Eclipse, Saturn’s energies are particularly potent now.

And to top it off, Saturn in Libra is about to exactly square Pluto in Capricorn for the second time on January 31, highlighting how out of balance our economy has become. Libra is ruled by Venus (money/banks). Mountains of private and sovereign debt cannot be concealed by central banks creating asset bubbles. Saturn retrograde until May 30 means now is the time to restructure the financial system to create a more balanced economy.

The Sun rules speculation, and with the Sun conjoining Venus Monday and the Moon in optimistic Sagittarius through Tuesday, the stock market is likely to begin the week on a high note that deteriorates as the week progresses. Venus conjoining the Solar Eclipse and Mercury moving direct Friday should help bring milder weather conditions even though most of the planets will still be in cold signs.

Monday, January 11, 2010
Positive as Wall St. believes markets are in a “sweet spot.”

Tuesday, January 12, 2010
Positive early but could weaken in the afternoon to close to mixed to moderately up.

Wednesday, January 13, 2010
Negative.

Thursday, January 14, 2010
Positive early, then turns negative.

Friday, January 15, 2010
Negative. (Options expiration)

*Paraphrasing JPMorgan CEO Jamie Dimon’s description when his bank was TARPed.

1 comment:

vanessa said...

More on the jobless recovery and what needs to be done http://www.huffingtonpost.com/julian-l-alssid/will-a-skills-recession-p_b_420550.html