WallStreetWeather.net Forecast For Week Of August 15, 2011

Summary Of Last Week’s Influences:
Last week the market experienced a volatile rollercoaster ride that saw the Dow make four consecutive moves of 400+ point moves in 4 days in a week of triple digit Dow moves. The wildest moves took place on Tuesday which saw the Dow trade in a 640 point range as the Federal Reserve announced it was extending its extended period of near zero interest rates until at least mid-2013.

As described in my post about the Federal Reserve’s actions last week, Mars in Cancer squaring Uranus in Aries and opposing Pluto in Capricorn while operating outside the normal boundaries of planetary declination was responsible for generating wild and crazy market moves not experienced since October 2008 when Mercury was retrograde. Despite the market’s huge intraday moves, the major indices finished down the week by only around 1.5%.

Mercury retrograde is providing a replay that reminds us again of the financial crisis as the indices haven't been this volatile since October 2008 when Mercury was also retrograde . Last week was the first time since that time that I heard people reprise the question “who’s next?” Mercury retrograde opposing Neptune describes the rumors and contagion concerns that French banks could be downgraded on the sovereign debt they’re holding. Worries about how much U.S. money market assets have invested in French banks coupled with concerns that Bank of America (BAC) might not have enough capital greatly contributed to the banks being the weakest performing sector last week.

Banks are ruled by Venus and with Jupiter in Taurus and Saturn in Libra both in signs ruled by Venus, growth is slow and steady at best as banks must make many adjustments as they transition back to basic banking. As mentioned in a post last November when Venus became a morning star (which tends to correspond to the market's best performance of the year), Venus has disappeared from the morning sky since mid-July as it transitions to appearing in the evening sky around the time of the Autumnal Equinox.  Even if the stock market does not decline for the rest of the year it is unlikely the market will return to its late April highs.  At best, the market will stagnate and trade in a range.

Summary Of This Week’s Influences:
Thursday and Friday’s market moves were largely attributed to the news that German PM Angela Merkel will visit French president Nicholas Sarkozy Tuesday in Paris to discuss proposals to increase economic governance of the Eurozone. France, Italy, Spain, and Belgium announced a ban on shorting financial stocks – something that did not work when it was instituted in the U.S. during September/October 2008.

The Moon is Void-of-Course in Pisces Monday and Tuesday. Combined with Mercury retrograde, the early part of the week is far more suitable for reflection and relaxation, especially with the Sun, Mercury and Venus conjoined in fun loving Leo. Creative self-expression and engaging in pleasurable activities are more suited to these influences than accomplishing anything important. People tend to be more cooperative and leaders are more apt to reach agreement now but anything agreed to might not be clear and is likely to be temporary in some way with Mercury retrograde.

August 17, 2007 was the last time the Sun conjoined Venus in Leo and Mercury and Venus conjoined in Leo. Markets tend to be positive to bullish under these influences, and that day was when the Fed cut the discount rate 0.50% to 5.75%. The difference then was that Venus was retrograde vs. now it is Mercury that is retrograde. Mercury is at the midpoint of its retrograde cycle now which can correspond to change in trend at this time.

The atmosphere abruptly shifts Wednesday when the Moon enters Aries and squares Aries’ ruler Mars as Mars conjoins the July 1 Solar Eclipse, and then aspects Jupiter in Taurus the next day. Expectations that are not met could start a sell off.

Financials are in focus Friday as the Moon is in Venus-ruled Taurus on a Venus-ruled day! The Sun and Venus squaring the NYSE natal Sun in Taurus tends to be positive for the market.

This week is likely to be much less volatile than last week which could help the indices to temporarily regain their footing.

Monday, August 15, 2011
Positive early but could reverse and become choppy to negative intraday before turning positive again.

Tuesday, August 16, 2011

Wednesday, August 17, 2011

Thursday, August 18, 2011
Negative conditions improve as the day progresses.

Friday, August 19, 2011 (Options expiration)

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