WallStreetWeather.net Forecast For Week Of November 7, 2010

Summary Of Last Week’s Influences:
Magic, spellbound, euphoria, addicted. What inspired these words spewing from the financial media was what Harris Private Bank chief investment strategist Jack Albin referred to as “the government’s latest faith-based initiative” in the form of the Federal Reserve’s announcement Wednesday to purchase $600 billion in Treasuries through June 2011.

These words reflect the prominent influence of Neptune November 2-11 which from Earth’s vantage point it appears to be stationary in the sky as it turns direct November 7 after being retrograde since May 31. Neptune rules dreams, and Wall St. had certainly been eagerly anticipating its dream of more quantitative easing by the Fed and a Republican victory in the midterm elections to come true for some time now.

Although the real message of Neptune is to be inspired enough to turn your dreams into reality regardless of external circumstances, the market behaves no differently than most people looking for a quick and easy fix that is overly dependent upon someone or something else to come through for them. In the market’s case this refers to needing something beyond fundamentals to increase asset prices.

The market has been on a tear since Saturn in Libra separated from its opposition to Jupiter (August 16) and made its final square to Pluto (August 21). Saturn’s strong influence brought concerns of deflation and the risk the economy would slide into a double dip recession. These fears began to wane as the influence of Jupiter and Uranus conjoining in Neptune-ruled Pisces (September 18) became stronger. This dynamic duo tends to bring large and unexpected spikes that inflate asset prices as Jupiter was the traditional ruler of Pisces prior to Neptune’s discovery. Pisces and Neptune can create asset price bubbles. As we have already witnessed just two short years ago, Uranus transiting Pisces creates and busts bubbles. Between Jupiter conjoining Neptune in Aquarius during most of 2009 and Jupiter conjoining Uranus in Pisces until January 2011, the market has been gorging on a lavish government provided buffet.

The timing of these planetary influences correlates to the words and deeds of the Federal Reserve. And who better to bring Jupiter’s optimism and bounty to the market than Mr. Jupiter himself, Fed Chairman Ben Bernanke, born with the Sun and Moon in Jupiter-ruled signs! David Wessel is the author of the book “In Fed We Trust,” yet in his column in Thursday’s Wall Street Journal he writes that “Ben Bernanke doesn’t seem like a gambler.”

The Sun represents speculation, self-identity and describes a person’s career and reputation. The Moon is our emotional barometer and represents instinctual and habitual behavior patterns. Born with the Sun in Sagittarius opposing Jupiter (in Mercury-ruled Gemini) and the Moon in Pisces,* Bernanke is a high roller. While this behavior might not surface in his personal life, Bernanke is not afraid to roll the dice with the U.S. as well as the entire global economy. After pulling the levers of the global economy all day, going to Vegas would be a letdown. Saturn also describes one’s professional calling. Not meaning to get too technical here but with his Sun semisquaring and Jupiter sesquiquadrate Saturn in Pluto-ruled Scorpio, Bernanke places big bets using other people’s money.

Jupiter and Sagittarius represent matters on a global scale; these are inflationary influences. Since oppositions between planets represent dealing with external forces that tend to manifest as other people, Bernanke’s Sun opposite Jupiter in Gemini reflects the Fed Chairman is exporting deflation while importing inflation in the form of higher commodity prices. While the Fed is trying to spur consumers to spend on discretionary goods and services, consumers are facing increases in food and energy costs just in time for the holidays. (Of course, the Fed conveniently excludes food and energy costs in its inflation calculations.)

Sagittarius is part of the enthusiastic fire element which thrives in the world of academia and conceptual theories but does not necessarily translate well to real world application. Bernanke (as well as Fed Vice Chairman Janet Yellen) were born without any planets in the practical earth element to help ground them.

Both Bernanke and the Federal Reserve’s chart have Mercury conjoining Venus in Sagittarius, indicating that the Fed Chairman communicates an expansive monetary policy. As long as Bernanke is running the Fed, investors are right to have a healthy skepticism that Bernanke won’t end the party before the bubble bursts.

In assessing Bernanke’s moves, Wessel writes that Bernanke “compared the risks of doing nothing with the risks of doing something uncertain. He opted for the latter.” That’s because Bernanke’s progressed** Sun is conjoining progressed Venus (monetary policy) in Aquarius. Ruled by Uranus, Aquarius is all about what is “unusually uncertain” and is not afraid to do something far out. With progressed Venus favorably aspecting his Sagittarius Sun, Bernanke is optimistic he can successfully pull off his gambles. And with the Fed’s progressed Sun in Aries, the Fed has no qualms about boldly going where no central bank has gone before.

With Uranus in Aries squaring the Fed chart’s natal Pluto, Sun, and conjoining the sector of the chart representing its reputation between March 2011 and January 2012, the Fed is likely to face a few unexpected shockwaves. Among them could be a rebellion coming from within the Fed. Saturn in Libra will square Bernanke’s natal Uranus in Cancer in October 2011 and conjoin his natal Mars/Neptune conjunction the following month. These challenging transits will be a prelude to Bernanke’s Saturn return in November 2012. Saturn’s return to its natal position around every 29 years is a time of testing. If the individual (or nation) has learned the lessons of the planetary taskmaster, the Saturn return can be a time to reap the rewards of your efforts. For those who refuse to learn the lesson and continue to try to recreate the failed policies of the past, the Saturn return can be a time of difficulties.

Boundaries and barriers can dissolve when Neptune is prominent. In “QE2: This Time It’s VERY Different!,” I explained why the Fed is using monetary policy to carry out fiscal policy. Neptune is the world of myth and illusion, where things are not always what they appear to be. In last week’s Forecast I wrote that the outcomes of the FOMC meeting and the midterm elections “might be somewhat confusing and raise more questions than they answer.”

Unless you agree with my analysis that the true purpose of QE2 is to crowd out the Treasury market, Bernanke’s explanation for the Fed’s actions is confusing. (It would also reflect that he is bluffing about its true intent.) People visualize Bernanke “printing money” as the Fed proclaims inflation is too low. Then Bernanke backtracked Saturday and said the Fed is “not in the business of trying to create inflation” but is doing QE2 because the Fed’s prior actions were “insufficiently stimulative.” But still the Fed continues to assure us that it’s got inflation under control. The public tends to be skeptical, believing that inflation (Jupiter) is coming in the future (Uranus) that will cause the bubble (Pisces) to burst. And the first asset bubble to pop will be long term Treasuries.

Neptune prominent together with the Sun, Mercury, and Venus retrograde in Scorpio (taxes and corporate welfare) saw the GOP gain the largest number of seats in the House of Representatives since 1938. Republicans were assisted by corporate interests supporting the Tea Party movement behind the scenes to “reclaim America” by pledging to cut taxes and spending and limit regulation. They campaigned for smaller government but one that is not so small it stops giving out subsidies and special favors to businesses and senior citizens.

Other than what its corporate handlers instruct it to do, the Tea Party movement has yet to coherently explain what it is for rather than what is against and angry about. Although there are some involved or connected to the Tea Party who would like to not only rein in the Fed but take the far out extreme and end it altogether (with Rep. Ron Paul being the most prominent person in this camp), both Republicans and Democrats can agree they’re addicted to the Fed.

At a higher level, Neptune represents oneness. At its lowest level Neptune represents propaganda and smear campaigns. If President Reagan was looking down from above, he wouldn’t recognize what the Republican Party has become and would be disgusted by it. His “big tent” philosophy was unfortunately replaced by Karl Rove’s “base” that elevated President George W. Bush’s “you’re either with us or against us” remark to insinuate more than a challenge to combat terrorism. The Tea Party movement has brought out the most hateful and polarizing behavior that the GOP has deemed acceptable conduct in the name of winning.

Now that they’re going to be in control of the House and setting policy, fissures are developing between Republicans and the Tea Party who is vowing to defeat Scott Brown even though they helped elect him to the Senate earlier this year. Sen. Jim DeMint vowed President Obama would face his Waterloo. Now it seems DeMint wants Sen. Lisa Murkowski who ran as a write-in candidate after the GOP snubbed her for Tea Party candidate Joe Miller, to face hers. If Murkowski retains her Senate seat, how amenable is she going to be to towing the Republican party line at this point?

The USA was born with Saturn in Libra, indicating that the nation achieves its greatest success when members of both parties work through their differences with the goal of doing what is best for the nation overall than for the benefit of the few. Saturn squaring the USA Sun in Cancer (exact November 17) and the USA experiencing its Saturn return (December 3 and during 2011) reflects that the U.S. will be tested on how it can deal with the many structural issues facing the nation that for too long has been left on the back burner.

Call it a relief rally or being under Neptune’s spell, the stock market closed the week at its highest levels in over two years along with major commodities closing at or near new highs. Rather than engaging in a bit of profit taking, the largest gains came on Jupiter-ruled Thursday as dualistic Mercury harmonizing with Jupiter brought two pieces of news that boosted asset prices. First was Bernanke’s Washington Post op-ed stating that “higher stock prices will boost consumer wealth and help increase confidence.” That was followed in the afternoon by an article in the Wall Street Journal that the Fed was working on rules to allow “strong” banks to increase dividend payments for the first time since the financial crisis.

All this came about as the Moon was in Venus-ruled Libra on the first day that Venus emerged as a star in the early morning sky until July 2011. Venus as a morning star can correlate to higher stock prices which can increase the potential that the market could peak within this timeframe. However, this does not mean the market will be free from pullbacks and/or a couple of corrections between now and July. As mentioned in my post on the Autumnal Equinox, the market could start to hit a few road bumps approaching mid December.

Friday’s employment report confirmed that markets have become addicted to the Fed’s stimulus, already speculating on QE3, 4 and 5 before the release of the report. Rather than rejoicing at a gain of 159,000 jobs in October along with September’s report revised to reflect a loss of 41,000 jobs from a previous report of minus 95,000, the market was mostly negative and choppy for most of the day before turning positive at the close as the upside surprise raised concerns the Fed might not expand QE. Although the unemployment rate remained unchanged at 9.6%, the report correlates to my prediction that the employment situation would improve by the third quarter of 2010.

Summary Of This Week’s Influences:
Saturday’s New Moon in Scorpio occurred on the same degree that Venus went retrograde on October 8, bringing a return to issues prominent then such as banks handling of foreclosures. Venus retrograde at the New Moon can bring new information and fresh ideas that can assist in reevaluating financial matters especially as they related to debt, insurance, taxes, wills and legacies. The New Moon conjoins the Fed’s natal Moon in Scorpio which is the ruler of the Fed’s chart, indicating the Fed will be an outsized influence on market sentiment over the next month.

As Neptune turned direct early this morning, Venus re-entered its home sign Libra this evening until November 29. Venus will be moving slowly now, repeating territory last traveled September 5-8. Venus retrograde in Libra offers the opportunity to repair relationships of all kinds and can help to facilitate cooperation and diplomatic efforts. Mercury entering Sagittarius Monday evening until November 30 (and again December 18 – January 13 due to Mercury being retrograde next month) together with Venus in Libra and Mars in Sagittarius until December 7 puts the focus on global trade agreements. This could signal a shift in global currency values.

With his progressed Sun in Libra, President Obama is working to strengthen the U.S.’s strategic and economic partnership with India before heading to the G20 in Seoul Thursday and Friday.

Saturn in Libra describes governmental imbalances. As Saturn conjoins China’s Mercury this month and Neptune next month at the same time Pluto in Capricorn squares natal Uranus in Cancer, we might see that China’s economy is not as solid as investors believe it to be. The potential for revaluation of the yuan is getting much stronger now.

The combination of Neptune turning direct, Venus switching signs, and Mercury moving into Sagittarius where Mars is already traveling indicates the potential that the market could take a brief break in its upward trajectory early and at the end of the week.

Wednesday’s 30 year bond auction will gauge how the market views inflation. The combination of a light calendar of events this week and Veteran’s Day Thursday is likely to put even greater focus on the G20 meeting.

Monday, November 8, 2010
Shifts between negative to choppy/mixed conditions.

Tuesday, November 9, 2010
Negative.

Wednesday, November 10, 2010
Positive.

Thursday, November 11, 2010
Positive conditions could weaken to choppy/mixed in afternoon.

Friday, November 12, 2010
Negative conditions could improve going into the close.

*Since Bernanke’s birth time is not known, it is uncertain what aspects his Moon in Pisces makes to the other planets in his birth chart. If his Moon squares his Sun/Jupiter opposition that would motivate him to take on even more risk and would also reflect his utter lack of sensitivity to the largely detrimental effects the Fed’s actions have on consumer finances.

** A mathematical calculation that moves the planets forward in time as a method of prediction.

Ben Bernanke: December 13, 1953 time unknown Augusta, GA
Federal Reserve: December 23, 1913 6:02 PM EST Washington, DC
USA: July 4, 1776 5:10 PM Philadelphia, PA
China: October 1, 1949 3:15 PM Peking, China

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