WallStreetWeather.net Forecast For Week Of September 19, 2010

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This week’s planetary influences indicate the market is at a crossroads. On Friday the S&P 500 closed at 1,125.59 after reaching 1,131 which was its intraday high on the June 21 Summer Solstice.

90 days (and 90 degrees) later, the market has reached a turning point. As Summer shifts into Fall the moment the Sun enters Libra, it is time for the market to decide whether to break out and move higher or start to sell off.

The conjunction of expansive Jupiter and Uranus the awakener in dreamy Pisces which was exact September 18 remains an outsized influence as the Sun (speculation) and the Moon (sentiment) hook up with the planetary pair this week. If you want proof of Jupiter’s influence now, go outside at dusk Monday to see Jupiter rising in the East (or look to the West just before sunrise Tuesday morning when Jupiter sets) as Jupiter makes its closest approach to Earth since 1963.* (Uranus will be adjacent to Jupiter but requires a telescope to see clearly.)

Jupiter in Pisces can remain upbeat as long as investors maintain the faith that economic growth will continue to at least meet their expectations and the Fed will continue to feed their addiction to cheap money to fund riskier investments.

Jupiter expands and exaggerates the energies it aspects. Since Uranus tends to operate in extremes, Jupiter conjoining Uranus can manifest as a sharp and sudden breakout to the upside. Or Uranus can stir up an unexpected surprise or two that shatters Jupiter in Pisces’ grand illusion since Pisces rules bubbles.

Thanks to the Fed’s extremely accommodative monetary policy, stocks, bonds, and gold and silver have been moving in tandem rather than in opposition. This week there could start to be a divergence.

In preparing this week’s Forecast, I noticed that when Jupiter and Uranus (which are both retrograde) conjoined Saturday evening, Uranus had returned to the exact degree of Pisces that it was on April 26, the day that Saturn opposed Uranus and the major indices reached their highest levels of 2010. This week’s influences can indicate that the market has peaked for now.

The Moon (which rules real estate and silver), has been in Uranus-ruled Aquarius since Saturday where it will remain until 4:15 PM EDT Monday when the Moon enters Pisces. When Aquarius/Uranus energies are highlighted, there is an even stronger need to be ahead of the curve. Monday could signal the start of a transition as certain stocks/sectors/asset classes break out and diverge from operating in tandem.

The Sun rules gold and also represents the leaders of industries and governments. With the Sun in Virgo opposing Jupiter and Uranus Tuesday, investors’ expectations must be exceeded for the market to break out to the upside as these energies reflect the bar has been set very high. Anything unexpected can create a disruption in the markets. Since Jupiter rules things at a distance and Pisces represents the blurring of boundaries, an announcement made by leaders or news about them has a global impact.

Oppositions bring to light opposing yet complementary forces. The market has a tendency to get shaky at the Autumnal Equinox as the Sun entering Libra succumbs to Libra’s need to balance opposing energies on its scales. The Sun in Virgo opposing the Moon, Jupiter, and Uranus in Pisces at the time of the Autumnal Equinox Wednesday at 11:10 PM EDT**, highlights the giant transitional shift that has been happening since 2008 as Jupiter, Saturn, Uranus, and Pluto shift from mutable signs*** (which represent endings), to the beginning degrees of cardinal signs that initiate the start of something new.

Just as the Full Moon marks the halfway point of the Moon’s monthly cycle, the Sun reaches the halfway point of its annual cycle at the Autumnal Equinox. This year these energies are even more pronounced as the Harvest Full Moon occurs at 5:17 AM Thursday. The Full Moon in fast moving Aries can accelerate market moves. What has been largely occurring behind the scenes gets shoved front and center into the spotlight now.

This is the first of two Full Moons in Mars-ruled Aries (the second one occurs on October 22 at the last degree of Aries). At 0 degrees Aries (the start of the zodiac known as the world point), this Full Moon reactivates the energies when Jupiter first conjoined Uranus in Aries June 8, and Jupiter opposing Saturn and Saturn squaring Pluto during the week of August 15 that marked the end of such an unprecedented amount of challenging planetary alignments occurring in such a short span of time. Jupiter, Saturn, and Uranus all squared Pluto; now the Sun in Libra squaring Pluto (exact Saturday evening) can shift the balance of power as deeper structural problems and more debt are excavated.

The Federal Reserve could be in the spotlight beyond the FOMC meeting Tuesday as the Aries Full Moon conjoins the sector of the Fed’s chart representing its reputation and squares the Fed’s Sun in Capricorn opposite Pluto in Cancer. There could be more situations (or light is shed on already known instances) where the Fed and particularly Chairman Bernanke has been far from transparent concerning the Fed’s financial arrangements since it embarked on all these unusual programs and asset purchases.

The Sun opposing Jupiter Tuesday reinforces Ben Bernanke’s natal Sun opposing Jupiter, and Mars in Scorpio conjoins his natal Saturn, exerting pressure on him to take pre-emptive action to prevent an economic double dip by expanding the Fed’s balance sheet by starting a second round of quantitative easing. Although the potential to do this is stronger Tuesday than at the Fed’s November 3 meeting when most prognosticators think the Fed will act, I think if the Fed does anything it will most likely announce that an acceleration of mortgage retirements is happening quicker than the Fed projected at its August 10 meeting. The Fed could be more active in the Treasury market which potentially could create some disruptions. (The Fed increasing Treasury purchases to maintain its $2 trillion balance sheet would still keep the Fed in a neutral position, and is not “printing money.”) Between the Fed doing everything possible to keep long term borrowing costs as low as possible and banks and the government (through Fannie and Freddie) holding back foreclosures to prevent home prices from falling further, the US housing market is becoming entrenched in its own Lost Decade.

If the market continues to go up this week, the Last Quarter Moon September 30 could be the next chance for a market turn as the Sun will conjoin Saturn in Libra then. Market declines that begin now could continue until after Venus turns retrograde October 8 which indicates a reversal in values.

Monday, September 20, 2010
Unsettled to mixed conditions as the market seesaws between moderately negative to moderately positive.

Tuesday, September 21, 2010
Volatility could increase as the potential for large moves and reversals are elevated over the next three days. Market weakens as day progresses; closes negative.

Wednesday, September 22, 2010
Negative.

Thursday, September 23, 2010
Negative.

Friday, September 24, 2010
Positive conditions become choppy/mixed to negative.

*Although Jupiter reaches its closest approach to Earth about every 12 years, Jupiter will not be this close again to Earth until 2022.

**I’ll be writing more on the Autumnal Equinox in a separate post.

***Jupiter and Uranus in Pisces will shift to Aries, Saturn shifted from Virgo to Libra, and Pluto shifted from Sagittarius to Capricorn.

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