WallStreetWeather.net Forecast For Week Of June 19, 2011

Summary Of Last Week’s Influences:
Despite fears about Greece and economic indications that suggest the economy is not growing as fast or as strong as expected, the Dow and the S&P managed to break their six week losing streak.

As indicated in last week’s Forecast, the Moon in Scorpio saw the return of “merger Monday.” The Total Eclipse in Sagittarius brought large market moves in both directions and reflected that consumer price inflation is running slightly higher than analyst projections. Core inflation in May experienced the highest increase in almost five years! Based on this rate, core inflation is running at 2.4% year over year which is above the Fed’s unofficial 2% rate of inflation.

The markets turned bearish Wednesday and the Euro fell against the dollar, primarily due to EU officials failing to reach agreement on additional aid for Greece. Fears of how a Greek default would hurt European banks combined with concerns about $32.7 billion of credit guarantees estimated by the Bank for International Settlements written by U.S. banks and brokers.

The Lehman and AIG contagion effect was primarily due to counterparty uncertainty. This led
to a liquidity crisis when financial institutions were too scared to lend to each other. One of the factors in this uncertainty was CDS exposure. This factor is being repeated in Greek crisis. Having all derivatives trade on exchanges would create the transparency needed to prevent another liquidity crisis. Counterparty risk would be eliminated as each side of the transaction would have to post margin to the exchange. Fear of the unknown trumps the fear of knowing the amount each financial institution is exposed to.

Summary Of This Week’s Influences:
Mercury in Cancer opposing Pluto in Capricorn Sunday appropriately reflects the difficulty in getting multiple parties to reach agreement on the best way to deal with Greece’s sovereign debt crisis. Eurozone finance ministers meeting in Luxembourg Sunday and Monday must decide on the conditions of releasing a 12 billion euro tranche of aid to Greece to prevent the country defaulting on its debt by mid-July. Dualistic Mercury reflects talk among some ministers involved in the discussions to withhold paying half of the next tranche. Mercury squaring Saturn Tuesday reflects the additional pressure to impose more rigid austerity measures on Greece as a condition of receiving a second bailout to keep the country funded through 2014. The combination of Mercury squaring Saturn and opposing Pluto reflects the numerous delays to kick the debt can down the road.

As Eurozone finance ministers discuss Greece’s financial fate, the Greek parliament will decide on whether to give a vote of confidence to PM Papandreou’s reshuffled cabinet and proposal to implement further spending cuts. The prime minister celebrated his 59th birthday Thursday, as the Lunar Eclipse opposed his natal Sun and Venus in Gemini. This time in a person’s life corresponds to when Jupiter and Saturn return to where they were at birth. Papandreou experienced his Saturn return last October; his Jupiter return will occur in mid-August, a time when Jupiter and Saturn will be in engaged in a stressful alignment to each other in the sky.

Mastering Saturn’s lessons since the prior Saturn return around 29.5 years ago can bestow rich rewards at a time that traditionally corresponded to reaching the pinnacle of one’s career and earning capacity. Saturn is the embodiment of the law of cause and effect (especially Saturn in Libra). What you put out, you get back. And Jupiter simply expands upon that.

Jupiter in Taurus and Saturn in Libra are in signs ruled by Venus.  Uranus in Aries squaring Greece’s natal Venus in Cancer and opposing Greece’s natal Moon/Pluto conjunction indicates that Greece must reform its tax system and revenue collection. Large scale structural changes need to be implemented to
significantly increase tax revenue, while at the same time finding significant equitable spending cuts. This is also indicated by PM Papandreou’s progressed Sun conjoining Pluto in Leo squaring progressed Mars in Scorpio.

The June 15 Lunar Eclipse opposing his Sun/Venus conjunction in Gemini, the July 1 Solar Eclipse in Cancer squaring his Saturn in Libra, Saturn squaring his natal Uranus in Cancer in August and conjoining natal Neptune in Libra in October, together with more minor transits to these planets in Papandreou’s natal chart could weaken his ability to remain in power.

The Moon in Uranus-ruled Aquarius Sunday and Monday can bring unexpected and surprise events that can reverse the current trend. Volatility tends to rise and with it the potential for the market to make sharp up or down moves that break through support and resistance levels. Uranus and Aquarius rule technology and innovative trends which can put the tech sector in focus.

The Moon enters Pisces at 4:45 PM EDT Monday until early Thursday morning. Intuitive abilities tend to be stronger when the Moon is in Pisces which helps to sort out what is rumor or fraudulent vs. what is true. Sentiment can run from being hopeful and euphoric to catching a contagion.

Mars moves into Gemini Monday night until August 3, squaring Pisces’ planetary ruler Neptune early Wednesday morning. Traders have to be especially nimble with their fingers to ensure their gains don’t disappear and remateralize as staggering losses. What is reported vs. what is happening behind the scenes could be two completely different things.

Summer begins in the northern hemisphere at 1:17 PM EDT Tuesday when the Sun enters Cancer. The Sun represents self-identity and speculation, and Moon-ruled Cancer represents what we need to feel emotionally and physically secure. Cancer is symbolized by the crab that carries its home on its back. (More on the Summer Solstice in a separate post.) The worst asset bubble you can ever create is a housing bubble since housing is the collateral basis for most consumer and small business lending. Small businesses have not expanded because they lack equity in their homes to borrow from, not because of “uncertainty.”

The home the crab carries around that was once a shelter and a place of comfort has now become a tremendous burden. If small business is said to be the engine that drives the 70% consumer-based economy, then a housing bust is the best way to ensure the economy will take the longest amount of time to recover. Mercury in Cancer squaring Saturn in Libra at the Summer Solstice tells the sobering facts of what happens when financial conditions become unbalanced. The transition from a consumer based to a manufacturing based economy is a slow one whose progress is made even slower by fiscal and monetary policies that only prolong the necessary cleansing process that must take place following the bust. Mercury squaring Saturn and Mars squaring Neptune reflects that lack of mobility is a major impediment to lowering unemployment as people are stuck in homes they cannot sell.

Although there have been occasions when challenging alignments between Mars and Neptune have been bullish, Mars squaring Neptune has a greater tendency to be bearish. Information usually leaks out that shatters illusions and causes the market to swiftly sell off. This influence can bring suicide bombings involving multiple motor vehicles or public transport. Transportation accidents can be caused by foggy driving conditions, chemical spills, or distracted drivers. Drug border violence could be particularly intense now.

As I described in Part II of the Gemini New Moon cycle post, the USA is particularly affected by
this influence since Mars in Gemini squared Neptune (in Pisces’ opposite sign Virgo) when the USA was born. The USA’s idealization of the military and engagement in multiple wars without any thought to their cost, together with the mythology of the American dream of homeownership that became more elusive than ever once the housing bubble burst. Challenging alignments between Mars and Neptune eventually shatter the mythology built around them.

The Federal Reserve will be the central focus on Wednesday as the Sun in Cancer conjoins the
Federal Reserve’s natal Pluto, opposes its Capricorn Sun, and squares its Aries Midheaven (its reputation). Combined with the general influences of Mars squaring Neptune and Mercury squaring Saturn, Fed Chairman Ben Bernanke could reveal information during his news conference following the FOMC announcement that starts a selloff. To quote former Fed Chairman Alan Greenspan in an interview with Charlie Rose last week, “there’s nothing more for Fed policy makers to do.”
Strong aspects involving Neptune tend to be inflationary and create confusion which is further supported by the Moon being in Pisces.

Similar to last week, the Moon in its last quarter phase moving into Aries Thursday through Friday evening reverses sentiment and can bring back enthusiasm for risk taking.

The first three days this week could experience the most pronounced market moves.

Monday, June 20, 2011
Negative.

Tuesday, June 21, 2011
Mixed to moderately positive conditions weaken and turn negative in the afternoon.

Wednesday, June 22, 2011
Negative.

Thursday, June 23, 2011
Market reverses; positive.

Friday, June 24, 2011
Negative conditions improve to close mixed.

Greece: July 24, 1974 4:00 AM EET Athens
George Papandreou: June 16, 1952 time unknown St. Paul, Minnesota

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