WallStreetWeather.net Forecast For Week Of August 28, 2011

“…more extreme weather conditions with high winds and severe storms that cause power outages and extensive property damage. There is also increased potential for stronger earthquakes in the U.S., particularly in parts of the country not normally considered earthquake prone. Although the combination of the Sun and Mercury to Saturn/Uranus/Pluto can bring extremes in temperature and conditions that swing from severe drought to flooding, the emphasis on the water element at the Summer Solstice can bring an increase in moisture and precipitation. The eastern seaboard especially the Northeast and New England states such as New York City/Long Island, Connecticut, Massachusetts, and Vermont appears to be more vulnerable to storms and hurricanes than the southern states.” – from my 2011 Summer Solstice Forecast

Summary Of Last Week’s Influences:
True to its dualistic nature, Mercury completed its retrograde cycle with a 5.8 earthquake in Virginia on Tuesday followed by Hurricane Irene making landfall in two states (North Carolina and New Jersey). The Northeast has experienced record flooding and record precipitation for August in New York City.

I had written that this Mercury retrograde cycle (August 2-26) was about “lifting the veil of illusion.” Hopefully at this point people have awakened to the realization that earthquakes can occur almost anywhere in the U.S. and hurricanes are not confined to Florida and the southern states which are better equipped to handle it. This is why it’s important to keep a supply of basic essentials on hand at all times. The East Coast could face more earthquakes and storms in September, and there is always the possibility that the Sun could knock out power and satellite communications.

Now it will be interesting to see if House Majority Leader Eric Cantor who said earlier this year that people in the Midwest who suffered through numerous tornadoes and flooding should not receive any federal aid, grabs government assistance for Virginia. We’ll see if New Jersey Gov. Chris Christie is willing to walk the talk by not taking federal aid since the Garden State under his leadership is supposed to be completely self-sufficient. Perhaps these two events will help people to understand how everything is interconnected and there is a reason why this country is called the United States of America.

Neither the earthquake or an impending hurricane stopped the stock market from running up its biggest weekly gain in two months with all 10 S&P sectors in the green. Thursday was the only exception amongst the enthusiasm as the Moon and Mars in Cancer squared Saturn in Libra. Fears of sovereign debt concerns prompted investors to seek shelter in U.S. Treasuries.

As the Sun and Venus opposed Neptune at the beginning of last week before both planets entered Mercury-ruled Virgo, the markets reversed their downward slide. “Market Bets on Fed Miracle
aptly describes the market’s eternal hope the Fed is always ready to revive it when it starts to sink.

After being up and then down as much as 229 points, the major indices sharply reversed Friday after fully digesting Fed Chairman Bernanke’s speech on “The Near-and Longer-Term Prospects for the U.S. Economy.”

The markets welcomed Bernanke’s “read my lips” type of implication which intended to remove any doubts that the time frame of zero interest rates is “at least through mid-2013.”(1) What got the market really psyched is that the Fed Chairman has extended the next FOMC meeting from 1 to 2 days (September 20-21 with the FOMC statement scheduled for release on the 21st at 2:15 PM). The market interprets the change to imply that Bernanke intends to strong arm the other FOMC members to agree to some form of monetary stimulus.

What the market chose to ignore was Bernanke’s message as the USA experiences its Saturn return. He reinforced S&P’s contention that the hostile political environment during the debt ceiling debate hampered the economy. Bernanke clearly warned that if the 2012 fiscal year budget and appropriations and the Super Committee’s deliberations are not civil, the economy would be unable to recover. There is no uncertainty out there that business views as greater than the political uncertainty in the Congressional budget and appropriations processes. Rulemaking in healthcare reform and FINREG pale in comparison to funding uncertainties for any business that engages in commerce with the federal government.

Summary Of This Week’s Influences:
With Mercury turning direct and slowly moving forward again under the auspices of the New Moon in Mercury-ruled Virgo which harmonizes with Jupiter and Pluto as Jupiter prepares to turn retrograde Tuesday. (See my post on the Virgo New Moon cycle for additional info.)

The New Moon’s energies occurring the week before the Virgo Labor Day holiday weekend as institutional investors engage in end of month window dressing and new month buying can exaggerate the market’s moves which is further emphasized by Jupiter’s energies being more pronounced now as it turns retrograde until December 25.

The Moon in Virgo until Tuesday afternoon looks to evaluate the health of the economy. Monday’s report on personal income and spending could show that consumers are saving more than projected and doing less consumer discretionary spending due to the cost of staple goods that Chairman Bernanke claims is “transitory.”

Tuesday’s report on August consumer confidence could be steady to stronger with Venus in Virgo harmonizing with Jupiter in Taurus. The Minutes of the August 9 FOMC meeting Tuesday afternoon could provide added insight into how much work Bernanke would have to do to get consensus for additional monetary stimulus.

The Moon enters Venus-ruled Libra at 2:25 PM until Thursday afternoon, further reinforces the energies of Venus harmonizing with Jupiter in Venus-ruled Taurus. This is a “double Venus” with Jupiter in Taurus and the Moon moving into Libra in afternoon

Revised second quarter productivity Thursday and the August employment report could show an increase in labor costs.

Monday, August 29, 2011
Positive and likely strongest in the morning before weakening into the afternoon. This could take the indices into negative territory before gaining/reversing into the close.

Tuesday, August 30, 2011
Positive and strongest in the morning before weakening in the afternoon.

Wednesday, August 31, 2011
Negative. News related to sovereign debt and/or economic reports could exert downward pressure on the market.

Thursday, September 1, 2011
Positive bias.

Friday, September 2, 2011
Choppy/mixed to positive.

(1) “Read my lips; no new taxes” is a phrase that President Bush Sr. probably regrets. Bernanke’s “at least until mid-2013” remark reminded me of it and leads me to think that he could come to regret what he said as well.

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