Summary Of Last Week’s Influences:
The stock market made more gains last week, with the Dow closing just shy of 11,000 on Friday. The indices and several commodities are trading at levels not seen since between 2007 and the 2008 Harvest Moon when the financial crisis got in full swing.
Pluto’s energies were pronounced then as it had just stationed direct. Last Wednesday as Pluto in Capricorn turned retrograde and Capricorn’s ruler Saturn shifted back into Virgo, the market took a tumble in the afternoon when Kansas City FRB president Thomas Hoenig, an FOMC dissenter, told an audience in Santa Fe that interest rates need to rise to 1% to prevent an asset price bubble. Hoenig’s speech occurred the same day as the current and former Fed chairmen were defending their “bubble now, mop up later” doctrine.
Hoenig’s speech came a day after the Minutes of the FOMC’s March 16 meeting were released with the remark that: “A number of members noted that the Committee's expectation for policy was explicitly contingent on the evolution of the economy rather than on the passage of any fixed amount of calendar time.” Richmond FRB president Jeffrey Lacker (a non voting member) told CNBC that his comfort level in keeping rates low for an extended period “is diminishing somewhat over time.” Lacker wants the Fed’s exit strategy to start with asset sales so the Fed is left with “holding Treasuries only.” That would be a $1 trillion plus garage sale!
And so while there was a lot of news correlating to Pluto turning retrograde, it is my opinion that the news related to the Federal Reserve now and in the coming months is the most important financial story related to Pluto turning retrograde last week. See my post “Bernanke’s Grip on the FOMC Is Weakening” for all the details.
“Interest Rates Have Nowhere to Go but Up” proclaims the front page of today’s New York Times, and follows the planetary trend I described in the Fed post. Bond king Bill Gross is going with the planetary flow by selling as interest rates face “an extended climb.”
A related NYT op-ed by Robert Shiller (of the S&P/Case-Shiller Home Price Index), points out NAR’s homebuyer traffic peaked in June 2005, one month before Saturn finished its transit of Cancer (real estate). In August 2006 Saturn in Leo opposed Neptune in Aquarius, indicating a contraction of easy credit would start to pop the air out of the housing bubble. Traffic bottomed in November 2008 when Saturn in Virgo opposed Uranus in Pisces. Worries about employment, further credit tightening and stringent lending standards, kept home prices falling.
Since peaking in September 2009 when Saturn made its third opposition to Uranus, traffic has been steadily declining even though the Fed would buy MBS for another six months and the homebuyer tax credit was renewed and expanded through April 30. As mortgage rates rise, home prices will have to continue to decline to attract buyers. Banks will have to get real about the prices of properties being sold as short sales and foreclosures, as buyers have learned that homes today no longer come equipped with a built in ATM machine. Saturn re-entering Virgo coincided with February Consumer Credit declining 5.6% y/y to $2.45 trillion as consumers strengthen their balance sheet by cutting borrowing and paying bills on time.
Summary Of This Week’s Influences:
There’s been a growing chorus of analysts and commentators who think the market is due for a moderate pullback this month before continuing higher. The reasons cited are the trend to sell on the news of earnings season which begins this week, along with concerns about what the Fed will do at its April 28 meeting.
The planetary picture coincides with this view. Markets have accelerated since the March 20 Vernal Equinox and Wednesday’s New Moon at 8:29 AM EDT in Aries coincides with the beginning of earnings season. The Aries New Moon squares the January 15 Capricorn Solar Eclipse which brought a minor selloff driven by fears of sovereign debt primarily related to Greece and concerns about China tightening bank lending as China’s progressed Venus conjoined the eclipse (see “Chanos, China, and the Capricorn Solar Eclipse”). The June 26 Capricorn Lunar Eclipse opposes China’s natal Uranus in Cancer in the sector of speculation which could bring volatile market gyrations as well as the potential for public uprisings and turmoil over issues relating to food, shelter, and censorship. This could also be due to a natural and/or manmade disaster.
The New Moon in Aries conjoins the NYSE’s natal Saturn and squares the USA’s Pluto in Capricorn. This influence can represent selling pressure or a market that drifts sideways which would create a lot of frustration since the energy of Aries is about pushing forward into new (or in the market’s case), revisited territory.
Three months ago the market was driving under the influence of Saturn square Pluto as Mercury turned direct in Capricorn and Saturn turned retrograde. Now Mercury will be turning retrograde in Taurus (money/banking) from April 18 until May 11 which can stall or reverse trading trends. Saturn opposite Uranus for the fourth (and final pass in Virgo/Pisces) on the 26th can bring more volatility and wider price moves as Congress shifts their focus to financial regulatory reform with the goal of passing legislation before Memorial Day.
Aries is ruled by Mars, the planetary energy of action, aggression, and military matters. With the Aries New Moon and Mars in Leo, action this week centers on world leaders. On Monday and Tuesday our Leo Commander-in-Chief will host the Nuclear Security Summit in Washington. With leaders representing 47 countries, it will be the largest gathering of global leaders in the U.S. since the U.N. was established. President Obama signed a nuclear weapons reduction treaty with Russia last week as Pluto turned retrograde. This week’s Nuclear Security Summit will additionally reflect the energies of Aries/Mars as the gathering debates the best course of action in dealing with the nuclear threat posed by non-declared nuclear nations and terrorism by militant groups.
On Wednesday as the Aries New Moon squares his natal Saturn in Capricorn, President Obama will meet with Democratic and Republican leaders to discuss financial regulatory reform.
With the New Moon squaring NASA’s Moon in Capricorn and opposing natal Jupiter in Libra (which impactsObama’s natal Saturn in Capricorn), the President travels to Florida Thursday for a Space Summit to discuss what’s next for NASA. With NASA’s natal Uranus conjoining the President’s Leo Sun, it would seem that the Administration’s initial plans to cut the grander objectives of humans returning to the Moon and an expedition to Mars could find its way back to the table. With his Leo Sun squaring Neptune in Scorpio, President Obama must give his Saturn in Capricorn a workout by devising concrete objectives and timetables to replace nebulous “someday” talk of human expeditions beyond low Earth orbit and hitching a ride with the Russians to the ISS.
My next post will be on the Aries New Moon followed by a post on Mercury retrograde in Taurus.
Monday, April 12, 2010
Positive trend weakens and could reverse in the late afternoon.
Tuesday, April 13, 2010
Negative conditions improve turning mixed to moderately positive.
Wednesday, April 14, 2010
Thursday, April 15, 2010
Friday, April 16, 2010 (Options expiration)
Choppy/mixed to positive trend bias.