Summary Of Last Week’s Influences:
The major indices ended August on a negative note, with the Dow experiencing is worst August since 2001 and the Russell 2000 index of small cap stocks its biggest August decline in 12 years. 12 years represents one cycle of Jupiter, the planetary energy of expansion.
Last month the only thing Jupiter was expanding was an aversion to risk, reflected in Jupiter’s opposition to Saturn (fear/contraction) at the same time both planets squared Pluto (debt) in Saturn-ruled Capricorn (government/big business). These energies have given investors an insatiable appetite for government debt as well as corporate debt.
Mercury the planetary energy of communication, commerce, and movement turned retrograde August 20 amidst these energies. Many times when Mercury is retrograde markets will (at least temporarily) reverse their trend or remain range bound during the three week period Mercury is retrograde. Although the market reversed its down trend August 27 after weak yet slightly better than expected key economic numbers, neither acquisitions or stock buybacks announced at the beginning of last week could keep the market from reverting back to negative again.
It took a turn of the calendar (and with it the accompanying “new” money coming into funds for investment), for the indices to reverse course. The “triple Mercury day” that kicked off September brought triple digit gains for the Dow as the indices made moves reminiscent of the first trading day in August. Venus rules money and Mercury relates to trading it. “Currency Trading Soars” proclaimed the front page of The Wall Street Journal, reporting that currency trading has dwarfed stock and even trading in U.S. Treasuries, with retail investors getting into the game through currency ETFs and mutual funds.
Returning to the Jupiter cycle, the indices experienced their best start to September since 1998. The rally that began in Asia on the news of better than expected manufacturing data was repeated in Europe and the US. The Last Quarter Moon in Gemini conjoining the USA’s natal Uranus brought a sharp reversal as reduced expectations in the economic indicators allowed the slightest of improvements to “surprise” the market.
The triple Mercury day did bring some typical Mercury retrograde events in the corporate world. Apple (AAPL) sought to revive its Apple TV with a redesigned set top box, along with a refresh of its iPods. This is the perfect example of what to do when Mercury is retrograde: reintroduce and revamp existing products and services rather than announcing new ones. Mercury retrograde can bring a return to the past. Burger King (BKC) is reverting back to being a private company for the second time in a decade.
When it comes to the employment picture, any gains are a welcome sign, although it will require continued monthly payroll gains of at least 150,000-200,000 jobs to bring an economic sea change. 54,000 jobs were lost in August and 67,000 private sector jobs were created. The Sun conjoining Mercury retrograde brought major upside revisions to the June and July reports. Although I wrote back in November about the employment situation improving during the current quarter, I thought the market would react to a slightly better than expected employment picture in a perverse way as there are so many factions wanting the Fed to restart restart quantitative easing (QE2). This report gives less ammo to that (although Fed Chairman Bernanke is probably trying to figure out some way he can further accommodate what Wall St. wants).
In testifying before the Financial Crisis Inquiry Commission Thursday on “too big to fail,” Bernanke once again demonstrated that he hasn’t learned any lessons from the financial crisis. Indeed, the actions taken by Bernanke, Paulson, Geithner, and Bair created bank behemoths that might not have been too big to fail two years ago but certainly are now.
Summary Of This Week’s Influences:
The Sun rules career matters and Virgo rules the labor force. Labor Day is celebrated the first Monday in September as the Sun transits Virgo. Employment and economic data will continue to remain in the forefront with Wednesday’s New Moon in Virgo which occurs at 6:30 AM EDT.
Last week Dallas FRB president Richard Fisher remarked that “The ball is in the fiscal court for now,” insinuating that the Fed has done all it can do at this time to promote economic growth. In keeping with Virgo’s rulership of health and employment matters, President Obama remarked in his weekly address yesterday that “The steps we have taken to date have stopped the bleeding.” (Yes, but the patient is still weak and anemic.)
Mercury rules the New Moon chart set for the USA as well as the sector representing the Administration, and Mercury is retrograde in the sector of the chart representing R&D and behind the scenes activities. As Venus (money) enters Scorpio (taxes, debt) Wednesday morning, President Obama will give a major speech on the economy in Cleveland, proposing to increase and permanently extend the tax credit for R&D expenses that was first enacted in 1981 and is now experiencing its Saturn return.
Congress has extended the research tax credit 13 times after it lapsed in 2009 and its renewal is currently pending in the Senate. As The New York Times points out, “Doing so, however, would end one of the longest-running budget gimmicks in town: Presidents and Congresses of both parties have called for a permanent extension but ultimately kept it temporary to reduce deficit projections.” Although Republicans generally support the credit, they don’t want to give the Democrats any advantage in November. (Budget gimmicks are the reason why the Bush tax cuts expire at the end of the year and why healthcare reform is delayed until 2014.)
Venus will not fully complete its sojourn in Scorpio until January 7 due to being retrograde October 8 to November 18. Venus in Scorpio (particularly during the retrograde period), emphasizes revaluing debt which could trigger rising yields on government and corporate debt.
Venus changing signs can signal a change in investment values while Jupiter re-entering Pisces early Thursday until January 22 can signal a shift in economic and political philosophy related to global growth. Interestingly, Venus and Jupiter will turn direct on November 18 which increases the potential for large market moves to the upside then.
The Moon shifting into Venus-ruled Libra Thursday together with Venus and Jupiter shifting signs might bring a reversal in sentiment as the Moon reactivates the energies of the dog days of August. As September progresses, the more likely volatility will increase and with it the increased potential for another market downturn around the time of Vernal Equinox and Full Moon September 22-23.
It could be a good thing that the market is closed Monday as Mars in Libra squaring the January 15 Solar Eclipse and Saturn in Libra squaring the June 26 Lunar Eclipse might have temporarily reversed last week’s sentiment by renewing fears about sovereign debt, mortgage debt, regulatory changes created by FINREG, and fears of an economic slowdown.
Tuesday, September 7, 2010
Positive trend bias.
Wednesday, September 8, 2010
Choppy/mixed to positive.
Thursday, September 9, 2010
Negative trend bias.
Friday, September 10, 2010
Choppy/mixed to moderately negative.