WallStreetWeather.net Forecast For Week Of April 26, 2010

Summary Of Last Week’s Influences:
For all of the negative connotations attributed to the three week period three times a year when Mercury the planetary energy of communication and movement appears to move retrograde in the sky, last week demonstrated that every planetary energy has two sides – especially when it comes to dualistic Mercury.

Mercury is retrograde in Taurus April 18 until May 11. (I apologize to readers for not writing a post specifically for this retrograde period, but reading my post for the previous retrograde as well as the Aries New Moon Cycle post pretty much covers it.)

As the Sun entered Taurus on April 20, the ban on air travel in the UK and Europe due to Iceland’s volcano erupting was removed. Iceland’s volcano began erupting on April 14, the day of the Aries New Moon. The Aries New Moon squared the Capricorn Solar Eclipse that had triggered the earthquake in Haiti. As part of the earth element, when Capricorn and its planetary ruler Saturn are strong, there is a greater potential for earthquakes. And when you combine earth with the fire element (Aries), you get a volcanic eruption.

Uranus rules air travel, Saturn can represent delays, and earth energies “ground” things. The eruption occurred as the opposition of Saturn in Virgo and Uranus in Pisces squared Iceland’s natal Saturn in Gemini. Additionally, Mars in Leo conjoined Iceland’s Pluto. These transits to Iceland’s natal chart not only reflected the massive problems caused by the volcano, but a report commissioned by Iceland’s parliament released two days before the volcanic eruption accused the country’s former PM and other government leaders of “negligence” and possible insider trading by key Icelandic investors before Iceland’s banking system collapsed in October 2008.

Mercury retrograde periods have a tendency to bring choppy trading as the market is not sure what direction it wants to go. Although the indices spent each day in negative territory and seesawed back and forth from negative to positive, they turned around in the afternoon to end each day in positive territory (except for the S&P on Wednesday).

Mercury retrograde periods tend to bring our attention back to issues from the past. Wednesdays are ruled by Mercury and so are motor vehicles. Last Wednesday General Motors repaid the $6.7 billion owed to the US and Canadian governments five years ahead of schedule after emerging from bankruptcy last year. The government still has a 60% stake in GM that the company won’t be able to pay off until it issues stock when it becomes a public company again (which might not be until around mid-2011 at the earliest).

The massive blaze on April 20 (10 PM CT) at the Deepwater Horizon oil rig 50 miles off the Louisiana coast in the Gulf of Mexico reflects Uranus (explosions) in Pisces, the sign ruling oil and the sea. Technological developments and higher crude prices since progressive Uranus entered Pisces in 2003 have fostered deepwater drilling in new areas of the world that are primarily offshore. As the “drill baby drill” mantra has grown louder over the past couple years, Saturn (conservation) retrograde in hygienic Virgo opposing Uranus in Pisces (freedom from boundaries), is a reminder that deepwater drilling is not only a dangerous activity in terms of human lives, but is showing us the environmental impact which came just in time for Earth Day celebrations. Saturn is pressure and Uranus is the unexpected, and now rig operator Transocean thinks the explosion might have been caused by a blowout.

Aside from Mercury retrograde, Venus (money/banking) in its home sign Taurus squaring Neptune in Aquarius (illusion/deception/scandal) Friday was the dominant planetary influence last week. The Moon (sentiment) in Leo (speculation) and the hopes that corporate earnings would continue to come in above expectations, propelled the major indices to fresh 2010 high Friday.

Although financial earnings have been strong, some of those gains are attributed to several banks reducing their loan loss reserves. With Jupiter, Saturn, Uranus, and Pluto forming stressful alignments to the USA Venus in Cancer for the next two years, I think banks and financial companies such as American Express and Capital One are acting prematurely.

Fridays are ruled by Venus whose strong influences might have facilitated the market’s late day turnaround in spite of Greece requesting activation of a total of 45 billion Euros in aid from EU members and the IMF. But if EU members fail to unanimously agree, Mercury retrograde and Saturn retrograde (time, delays) opposite Uranus might force Greece to reschedule the timing its debt payments are due.

Venus square Neptune reflects the deceptive valuations issued by ratings agencies Moody’s and S&P who were grilled at a hearing Friday by the Senate Subcommittee on Investigations. Neptune is all about the art of illusion which is probably a better word to use as investment grade buyers really wanted the ratings agencies to present a pretty face so that investment grade buyers could chase higher yields because of the Federal Reserve keeping interest rates too low.

Summary Of This Week’s Influences:
It is not surprising that with major planetary alignments occurring this week that there are major financial events scheduled to accompany them.

Mercury rules Gemini and Venus rules Taurus. As Mercury retrograde continues in Taurus, Venus moved into Gemini today until May 19. While Mercury and Venus in each other’s signs create rapport, it is not as bullish as having both planets in Taurus. Venus in Gemini is more fickle and will trade on the latest news development than Venus in Taurus who prefers to stay on a slow and steady course upward. Venus in Gemini for the remaining Mercury retrograde period is likely to make the markets choppier and more unpredictable than under Venus in Taurus. It is difficult to discern a clear sense of market direction when Mercury is retrograde, so currency reversals between now and May 11 could be temporary.

When planets are in opposition to one another they tend to help us understand their energies by manifesting through the behaviors/actions of others. On Monday and most of Tuesday, the Moon (sentiment) will be in Venus-ruled Libra. Libra helps us understand ourselves and our world through our relationships with others.

Saturn in Virgo will oppose Uranus in Pisces for the fourth and final time in these signs. Just as Mercury retrograde brings our attention to issues/matters from the past, Saturn rules history as the planetary ruler of time. Saturn rules government and all types of structures. Uranus in Pisces seeks to reform by dissolving the structures that have become outmoded and only serve the status quo.

Financial Regulatory Reform:
Virgo and Pisces represent cleaning up the system so that it serves the majority rather than just those at the top. Mercury-ruled Virgo rules health and financial details (accounting). Neptune-ruled Pisces can be overly idealistic; things are not necessarily what they are presented to be. Each of the last three oppositions of Saturn and Uranus (November 4, 2008, February 5 and September 15, 2009) occurred around major turning points in the financial crisis. Barack Obama was elected president on the day of the first Saturn/Uranus opposition. One of the biggest issues of his presidential campaign (healthcare reform) has passed and now the Senate is about to take up financial regulatory reform.

Senate Majority Leader Harry Reid has scheduled a procedural vote to open debate on Senate Banking Committee Chairman Christopher Dodd’s legislation for 5:00 PM Monday. The unpredictable nature of Mercury retrograde combined with the Saturn/Uranus opposition and Saturn on the Ascendant of the chart for the vote could delay this. However, with Venus ruling the chart overall as well as the sectors of the chart ruling the banking system and global finance, there is a strong chance that the vote will occur.

The Moon in Libra can help to facilitate the desire for people with opposing viewpoints to cooperate with each other to reach a compromise. Even though all 41 Senate Republicans have signed a letter stating they oppose the bill in its current form, key Republican Senators are beginning to show some signs of flexibility. As Saturn in Virgo exactly conjoined Senate Minority Leader Mitch McConnell’s natal Neptune earlier this month, McConnell’s hard line rhetoric has ever so slowly started to dissolve. Mercury retrograde squaring McConnell’s natal Mercury retrograde in Aquarius can influence McConnell to be more reflective about taking an extremist view in opposing any kind of financial reform.

Saturn in Virgo exactly opposed Sen. Richard Shelby’s natal Venus in Pisces earlier this month, putting pressure on him to work to improve rather than complain about the “bailout” provision of the bill. Mercury turning retrograde on Shelby’s natal Mars in Taurus, helped to push him to return to negotiating with Sen. Dodd.

With the Moon (the public) in Libra located in the sector representing the nation and ruling the sector representing the Administration, and with President Obama’s natal Venus conjoining this sector of the 5:00 PM chart, the public is supportive of the legislation. Despite the excuse of opponents who claim that restricting certain trading practices here will push business overseas, it appears that other nations will enact similar reforms after reform passes here. At 5:00 PM the Moon will be conjoining the USA Saturn located in the sector of the USA chart representing the Administration. The bottom line here is that the bill will likely pass before the Summer Solstice, so Republicans such as Sen. Shelby who is up for re-election, would be better off showing constituents he supported the bill rather than being seen as blocking reforms and greater consumer protections. If Shelby wants to rebel against the Administration’s proposal, he should show his distaste for giving the Fed increased regulatory powers (Shelby voted against reconfirming Ben Bernanke).

Last Wednesday after the Moon entered Leo (speculation), the Senate Agriculture Committee passed Chairman Blanche Lincoln’s derivatives bill that is expected to be incorporated into Sen. Dodd’s legislation. Sen. Chuck Grassley was the only Republican voting for the bill that would go further than the Volcker Rule by forcing banks to give up their lucrative swaps desks. Most but not all of the trades in the $450 trillion derivatives market would have to go through exchanges and clearinghouses. Reflecting the Moon in dramatic Leo and the influence of Venus squaring Neptune (film), Lincoln’s bill put an end to the idea of creating movie futures that would have allowed bets to long or short an upcoming film’s box office take.

Goldman Sachs:
There have been more developments since I wrote last week’s analysis paralysis post on the SEC’s fraud charges against Goldman Sachs. As expected, GS Q1 earnings did not disappoint. However, most analysts’ questions on last Tuesday’s conference call were focused on the SEC’s lawsuit. Rather than not commenting about the investigation, GS had their co-counsel on the call. During the Q&A GS basically admitted that the only reason they lost $83 million in the CDO was because they weren’t able to unload the equity tranche onto some other sucker.

And far from GS telling you that only “sophisticated investors” purchased the CDO, what GS is not admitting that the “sophisticated investor” (Germany’s IKB Bank) was acting on behalf of the “sophisticated investors” in charge of U.S. municipalities such as Oakland, CA, King county, WA and the state of Montana.

GS admitted it knew the SEC was investigating this case since August 2008 and didn’t think receiving the Wells notice from the SEC last July was “material” enough to need to publicly disclose to shareholders. On an unrelated legal issue, GS director Rajat Gupta is being investigated by the government for allegedly providing insider information to Galleon hedge fund founder Raj Rajaratnam just before Warren Buffett invested $5 billion in GS in September 2008.

On Tuesday at 10:00 AM “the fabulous Fab” Fabrice Tourre, CFO David (“GS is not a retail bank”) Viniar, along with CEO Lloyd Blankfein can explain to the Senate Subcommittee on Investigations how as Blankfein stated last week that the SEC’s lawsuit against GS will “hurt America.”

FOMC Announcement:
The Federal Reserve concludes its two day meeting on monetary policy with an announcement around 2:15 PM Wednesday. The market is not expecting the Fed to tweak or drop its “extended period” phrase in the statement. But as regular readers know from a previous post, I am.

Bernanke and his other dovish cohorts at the Fed keep harping that rates can remain low for an extended period due to low inflation and high unemployment. Yet beyond higher inflation if owner’s equivalent rent and depreciating electronics were stripped out of the CPI, last week’s March Producer Price Index (PPI) showed food prices rose 2.4% - the sharpest increase since 1984. Vegetable prices jumped 49.3% (this is NOT a typo!). While companies so far have held back from passing along higher commodity costs to consumers, the PPI is an early warning sign that inflation is coming down the pipeline as costs can be passed along before the Fed can blink. (A sudden spike in inflation is what I predict will happen when Jupiter and Uranus conjoin in Aries in June.)

Last week Australia and India’s central banks raised interest rates, and Brazil is expected to raise rates at its April 28 meeting. Of greater interest to the US, the Bank of Canada removed its equivalent of “extended period” last week by announcing it was removing its commitment to hold rates steady until the end of the second quarter. The action prompted the market to automatically assume Canada would become the first G7 nation to raise rates at the bank’s June 1 meeting. Jupiter expands and Uranus spikes (in either direction), but when rates are at nearly zero, there’s nowhere to go but up.

The FOMC announcement occurs at the midpoint of Mercury’s retrograde cycle as the Sun in Taurus conjoins Mercury at midday during the Full Moon in Scorpio, putting the spotlight on debt and interest rates. The combination of all the planetary energies I’ve described in this and related posts raise the potential for increased choppiness, volatility and larger market moves over the remaining retrograde period. Midweek looks to be a turning point that weakens the market’s upward enthusiasm.

Monday, April 26, 2010
Positive early then weakens and turns negative before improving going into the close.

Tuesday, April 27, 2010
Positive bias.

Wednesday, April 28, 2010
Choppy/mixed to slightly positive early before starting to decline. Regains going into the FOMC announcement before turning negative by mid afternoon.

Thursday, April 29, 2010
Strongest in the morning, then becomes choppy/mixed to negative.

Friday, April 30, 2010
Negative, but strongest at the close.

Mitch McConnell: February 20, 1942 time unknown Sheffield, AL
Richard Shelby: May 6, 1934 time unknown Birmingham, AL
USA: July 4, 1776 5:10 PM Philadelphia, PA

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