WallStreetWeather.net Forecast For Week Of September 26, 2010

Summary Of Last Week’s Influences:
In last week’s Forecast I wrote that in its conjunction with Jupiter on September 18, Uranus in Pisces had retrograded back to the same degree where it was on April 26, the day it opposed Saturn and the indices reached 2010 highs. Monday was the first trading day following their conjunction; together with the Moon in Uranus-ruled Aquarius it was the rocket fuel needed to lift the S&P past 1131 on merger news and the announcement the recession officially ended in June 2009.

Another example of the Jupiter/Uranus conjunction in Pisces and its connection back to April relates to the explosion of BP’s Deepwater Horizon rig on April 20. BP permanently sealed the Macondo well September 17 and the U.S. government declared the well “effectively dead” at 5:54 AM CDT September 19. Pisces rules the sea and is symbolized by the fish. Whether the fish swimming in the Gulf of Mexico are healthy let alone safe to eat will not be effectively known for some time to come as the disaster was made far worse by pouring chemical dispersants into the water to conceal the oil. The oil industry and its allies are now acting like nothing ever happened and it’s time to go back to deepwater drilling despite the fact that even Tony Hayward (who steps down as CEO October 1) admitted the industry is not prepared to handle a spill occurring in deepwater.

The Sun opposing Jupiter and Uranus Tuesday certainly reflected the unusual announcement out of the Federal Reserve that it is “prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.” (bold emphasis mine) So much for deflation :-) (More to come on this subject as the Fed has proven in the past what they say should not always to be taken at face value.)

Oppositions involving Jupiter and Uranus tend to bring large moves and reversals, and that is certainly what happened Tuesday as the indices sharply reversed from their low prior to the Fed announcement to turning positive before the NASDAQ and the S&P reversed to close negative.

Although the market was negative during the September 22-23 Autumnal Equinox/Harvest Moon, the downturn was not to the extent that I thought it would be. The market’s certainty that the Fed will announce the start of QE2 at its November 3 meeting propelled most commodities and stocks to take another leg up while the dollar continued to decline. An unexpectedly strong reading on German business sentiment followed by a better than expected increase in capital equipment orders in the US for machinery and computers/electronic products got the market off to a bullish start Friday that kept it climbing into the close.

In the Autumnal Equinox post I pointed out that the regulators and the White House will still wield the power to reform our economic structures, regardless of who is in charge in Congress. On September 17 President Obama appointed Elizabeth Warren to oversee the establishment of the Consumer Financial Protection Agency. Since FINREG specifies that the Federal Reserve will fund the agency, Congress cannot punish it by closing the purse strings. On Tuesday Warren and Treasury Secretary Geithner convened a forum to tackle the agency’s first job of creating a simple and easy to understand mortgage disclosure form.

Summary Of This Week’s Influences:
As The Sun exactly conjoins Saturn in Libra Thursday, we will start to see the regulators in action. The Senate Banking Committee will hold a hearing Thursday on implementing FINREG. Fed Chairman Bernanke along with the Chairmen of the FDIC, SEC, and CFTC, and leaders from the Treasury and the OCC are scheduled to testify.

The Financial Stability Oversight Council created in the FINREG legislation and whose members include the leaders of the above mentioned regulatory agencies, will hold its first meeting Friday chaired by Treasury Secretary Geithner. The Council’s purpose is to identify and respond to risks threatening the stability of the financial system. How the Council can fully carry out its mission in addition to being charged with “promoting market discipline by eliminating expectations on the part of shareholders, creditors, and counterparties that the government will shield them from losses in the event of failure” as long as the Fed is pushing investors to speculate on risky investments, is beyond my comprehension.

The CFTC will meet on Friday to vote on proposals to implement the OTC derivatives provisions in FINREG, together with setting a deadline to submit data on outstanding swap trades that took place before the legislation was enacted. The U.S. Chamber of Commerce has fought the CFTC’s efforts to bring transparency to the Pluto-ruled opaque $615 trillion OTC derivatives market, despite analysis that Paul Volcker talked about in a speech last week that derivatives actually increase volatility. (Volcker noted there are 10 times as many derivatives as there are things to hedge against!) CFTC Chairman Gary Gensler will be meeting with the European Commission this week to discuss their proposal for derivatives regulation which is similar to the U.S.

Although this week has an upward bias, the Sun conjoining Saturn Thursday could exert downward pressure on the market, and the indices could become choppy/mixed to negative for brief periods intraday. Mercury in Virgo opposing Jupiter and Uranus at the end of the week could bring currency reversals and big news related to global trade.

Monday, September 27, 2010

Tuesday, September 28, 2010
Positive trend bias but weakest around midday.

Wednesday, September 29, 2010

Thursday, September 30, 2010

Friday, October 1, 2010

1 comment:

Anonymous said...

As ever, a most insightful, detailed and enjoyable overview of current trends!

Regarding your earlier comments about Thursday's Sun/Saturn conjunction in Libra: "The Sun conjoining Saturn indicates the regulators are taking center stage, charged with the responsibility to implement rules and regulations to enforce legislation resulting from the reform of economic structures. Although the most sweeping structural transformations will occur in the US, most of the financial reforms are being regulated on a global level, dissolving the barriers caused by discrepancies in international standards and enforcement."

As I understand it Saturn is said to be 'exalted' in Libra. Since it traditionally rules presidents and other heads of state exercising authority/judgement my hunch for Thursday's solar conjunction would be that something immensely significant is imminent.

Whether in zodiac terms we are being given a kind of cosmic 'full stop', an 'exclamation mark' or an 'expletive deleted' remains to be seen.

Saturn can be an awful old bugbear - much like a Supreme Court judge with toothache, to use an analogy!

It's annual meet-up with the Sun will surely dictate the terms of engagement for the next 12 months' trading in markets everywhere.

In the UK the Sun/Saturn aspect takes place at the end of the Labour Party annual conference and the start of the Tory equivalent.

Batten down the hatches. We could be in for some drama!

Best wishes and many thanks for your excellent insights.