WallStreetWeather.net Forecast For Week Of May 17, 2010

Summary Of Last Week’s Influences:
Like an addict who needs an ever greater fix to make an impact, the “shock and awe” of the EU’s nearly $1 trillion backstop announced Sunday to prop up Greece and other troubled Eurozone nations wore off before the week was over.

As noted in last week’s forecast, Mercury retrograde in Taurus brought a repeat performance of the weekend deals arranged by the Treasury and Federal Reserve “before Asia opens” at the height of the financial crisis. Even though this deal was arranged by the European Commission together with the European Central Bank, Washington was aggressively working the phones since the market’s record point plunge to ensure a deal got done so Europe’s problems would not continue to jeopardize the U.S. stock market.

Once Mercury reversed course and slowly started moving forward, markets began to rethink the elements of the deal, questioning whether the move did anything more than delay the debt dilemma to another day.

The bulk of the $955 billion package would create a special purpose vehicle (an off balance sheet entity that got Citigroup into trouble). Creation of the fund is dependent on approval by all the parliaments of the contributing nations. The second largest portion of the package consists of matching loans from the IMF which would be conditional upon the borrowing nation enacting severe austerity measures. The only part of this deal that has funds that could be drawn upon quickly is a $60 billion emergency fund coming from the overall EU budget intended for dealing with natural (not manmade) disasters.

Ironically the EU’s loan guarantee package was put together on “Europe’s Birthday,”* which celebrates the day French foreign minister Robert Schuman issued a declaration calling for a united Europe back in 1950. Venus is the ruler of the chart, and Venus in Aries squares Uranus which conjoins the chart’s Cancer Midheaven representing its reputation. Jupiter, Saturn, Uranus, and Pluto will challenge these natal positions this summer, lead by the June 26 Capricorn Lunar Eclipse that exactly squares Venus in the sector representing financial relationships with other nations. This is likely to bring a catalyst event that will force Greece’s debt to be restructured, requiring European banks to take a haircut. The U.S. is concerned that when American banks counterparty with their weakened European rivals, risk is enhanced.

The last time shock and awe was popularly used was when U.S. forces invaded Iraq. Seven years or one Uranus cycle later, it’s ironic that on the day “shock and awe” was applied to lift up the markets, the deadliest violence all year occurred in Iraq. Just as the world was deceived into believing Iraq had weapons of mass destruction, the illusion is that Greece and other Eurozone members’ debt problems are now under control. Reorganizing Greece’s debt or forcing investors to take a haircut made out to be a weapon of mass destruction is also an illusion.

Summary Of This Week’s Influences:
Venus (money/asset values; banking) concludes its transit begun in Mercury-ruled Gemini April 25 that brought choppier and more volatile trading. Venus forms alignments to Jupiter (Monday), Saturn (Tuesday), Uranus and Neptune (Wednesday) before shifting into Cancer late Wednesday. This occurs at the same time the Sun in Venus-ruled Taurus (leaders; central banks, speculation) aspects Jupiter (Monday), Saturn (Tuesday), Neptune (Wednesday), and Uranus (Thursday), before entering Gemini Thursday night.

Jupiter expands and exaggerates while Saturn contracts and limits. Jupiter and Saturn will exactly oppose each other for the first time in almost 20 years on May 23. Volatility and large market moves will likely continue as markets see saw between optimism (Jupiter) and pessimism (Saturn) in interpreting economic conditions. Jupiter in Pisces expands the global interconnectedness of the sovereign debt crisis despite government efforts to keep it tightly contained (Saturn in Virgo). Between now and spring 2011, large scale global events will alter the balance of power in economic, political, and societal structures.

The Moon represents sentiment and rules Mondays. Beyond the planetary influences, Mondays are greatly determined by news events occurring over the weekend as this is a popular time for deals to get done. With the Moon in its “home” sign Cancer Monday and Tuesday and Venus and the Sun aspecting Jupiter in Pisces, the market Monday could make large moves in either direction. Leaders exhibit confidence that the economy continues to expand. Banks, transports, and the consumer sectors could be the focus. These planetary influences could bring news about diabetes.

Venus squares Saturn Tuesday, further emphasizing the government’s desire for accountability in the financial industry. Venus/Saturn can put pressure on valuations which could be slightly offset by harmonious alignments between the Sun and Saturn and Venus and Neptune in Aquarius that Congress and financial regulators will not want to enact rules that would impede the flow of credit.

The Moon in Leo Wednesday and Thursday puts the focus on speculation. On Wednesday as the Sun squares Neptune, the Senate Banking Committee will hold a hearing to see if they can sort out the confusion surrounding what specifically caused the start of the May 6 “flash crash.”

The May 10 Taurus New Moon squared Mars and Neptune, emphasizing that action will occur over the next month concerning individuals and institutions accused of fraudulent trading practices. Thursday’s First Quarter Moon reinforces these energies which will culminate on June 4 when Mars in Leo exactly opposes Neptune during the Last Quarter Moon in Neptune-ruled Pisces. Mars opposite Neptune tends to have a negative influence on the market as illusions in one form or another (credit-related issues is a favorite) gets shaken up.

Mercury in Taurus harmonizes with Pluto in Capricorn for the third time on Wednesday due to Mercury’s retrograde cycle. The previous alignments related to news by central banks favorable for debt and lending. On April 6 the market viewed the Minutes from the March 16 FOMC meeting as dovish, while on May 3 the ECB announced it would accept Greek bonds as collateral even if they were rated as junk.

Once again Mercury harmonizes with Pluto as the Fed releases the Minutes of the April 28 FOMC meeting on the same day as April CPI is released. What the Fed and the CPI have in common is that both ignore all forms of inflation such as asset prices, calculating the data in such a way to mask (Neptune) the true cost of living to reduce index expenses such as Social Security.

Barron’s is begging the Fed to “please raise rates!” before more investors desperate for yield pour money into overinflated assets. St. Louis FRB president Thomas Hoenig, who continues to expand on his dissent at each successive FOMC meeting and further elaborated his thoughts in a Wall Street Journal interview yesterday, won’t acknowledge that the Fed can predict bubbles (Neptune). Alan Greenspan freely acknowledged after he left the Fed that bubbles are the key to promoting real-world “innovation” and are an integral part of the Fed’s tool kit.

Venus squaring Uranus in Pisces Wednesday generates excitement in the latest tech trends. The Venus square to Uranus together with the Sun forming a favorable aspect to Uranus Thursday, creates excitement and the potential for sudden intraday gyrations.

Venus enters Cancer Wednesday evening until June 14. Planets entering cardinal signs tend to bring action and new information about the Fed, as the central bank has the Sun in Capricorn opposite Pluto in Cancer, and an Aries Midheaven (the sector of the its natal chart representing its reputation). Beyond monetary policy, Venus conjoining the Fed’s Pluto relates to the Fed’s secret lending arrangements and behind the scenes lobbying by Bernanke to keep all of its powers intact.

The Sun enters Gemini late Thursday evening with the Moon in Virgo. The Sun and Moon in Mercury-ruled signs emphasize communication and movement. The Moon emphasizes the energies of Saturn in Virgo which is gaining influence now due to its opposition to Jupiter Sunday and appearing to stand still in the sky May 27-June 2 as it turns direct May 30 after being retrograde since January 13. Transportation, jobs, and healthcare is in focus now. Unfortunately for travelers (especially foreign travel), these influences are likely to continue to create delays.

I know what I’m about to say is totally unprecedented in central bank history and goes against the grain of global central banks buying and holding gold when prices are high to create liquidity, and selling when gold prices are low during good economic times, but one wild and crazy thought is that the Fed starts to slowly sell a small amount of gold as a way of tightening the money supply.

While I know Uranus represents extreme and bizarre behavior, I probably need to come up with some more realistic scenarios regarding how half the planets in our solar system forming challenging alignments to each other at the beginning of initiating signs this summer could affect economic and geopolitical events.

With Jupiter and Uranus conjoining at the beginning of Aries June 8, only bold and innovative ideas and actions that haven’t been done before need apply.

Monday, May 17, 2010
Happy 218th Birthday, NYSE!

Tuesday, May 18, 2010
Moderately positive early before becoming choppy/mixed; see saws between moderately negative to positive.

Wednesday, May 19, 2010
Negative conditions improve and could stage an afternoon reversal.

Thursday, May 20, 2010
Negative before improving to choppy/mixed to moderately positive.

Friday, May 21, 2010
(Options expiration) Negative.

*Europe’s Birthday (Schuman Declaration): May 9, 1950 4:00 PM CET Paris (see p. 6)
Federal Reserve: December 23, 1913 6:02 PM EST Washington, DC

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