THE CRASH OF 1998/9 PART XIX

STARTING OVER, STARTING RIGHT

[11/03] Well in retrospect there was no need to run October 16, but still not bad practice.  What is a bear market? According to psychoanalyst John Schott the three stages of a  bear markets are:
  1.  "The earliest stage is characterized by denial, increased anxiety and fear.
  2.  The second stage is panic.  People suddenly say, 'I've got to sell.'
  3.  The third phase is despair, people stop buying stocks."
We are still not quite there, but it is much closer than most investors think.  Stay tuned.

[10/16] TIME TO EXIT THE MARKET - RUN, DONT WALK, RUN!!! 

[10/10] CASH RE-ALLOCATION

We have recommended maximum cash and US bond allocation for some time. That included the use of little or no margin. However, in the not so distance future, we will put our money back to work as well as reducing US bond allocations. Depending on whether you are more of bull or bear persuasion, generally we suggest you put available cash back into the market as follows:

DJIA.....IF A BULL.....IF A BEAR

7500...........25%............0%

7000...........50%...........25%

6500...........75%...........50%

6000..........100%...........75% 

[07/15] The week of July 20 has been forecast to mark a market top ahead of the Fall. Will the forthcoming August eclipses be a painful reminder of the 1980's lesson of Rockefeller Center properties, that Companies and Stocks are NOT the same thing? You can over pay for the stock of a good company as well as for a bad one. Are you prepared for the FALL? Review your portfolio with your broker or financial advisor before then. 

[5/22] While the markets went higher than we initially forecast, it has been making multiple tops around DJIA 9200. Todate, European markets peaked in early April and the broad US markets in late April. It takes a lot to slow down a runaway market. Whether or not, there is one more high coming, please note:

Attention Investors: You still have some time before the summer to raise cash, but do you really want to be the last one out of the door? DO NOT fail to read the SIRE post by Samuel Robbins referencing his May 19, 1998 NYC meeting talk. Remember he correctly forecast the 17 year bull market starting in 1982! 

We have long said investing in the US in 1998 is like investing in HK in 1997:
March/April 1998 ~= July/August 1997!
With a possible market top set in place on 3/25, others will see our vision as the market looks to support first at 8400, 8000 and then 7500 and then?

Watch if DJIA 8888 ceiling holds, and if Microsoft continues in a downtrend from the selling on "good" news today. 

Football results aside, the DJIA January close was BELOW its December 31 close ahead of two monster eclipses February 26 and March 12. We say "6500 before "8500". Are you prepared? The Astrologers Fund INC strongly advises you to confer with financial advisor or broker to discuss "crash proofing" your portfolio. Read the January 26 edition of WALL STREET, NEXT WEEK.

The following are a few potential courses of action you could discuss:

  1. Reduce margin in your securities account to 0.
  2. Consider selling what you personally would not dream of buying at current pricing or placing a close stop to protect profits.
  3. Explore whether writing covered calls or buying some put protection makes sense for your portfolio.
  4. Make a wish list of what you want to buy with the cash you have/will raise. Buy in stages: when they're 10% cheaper, more at 20% and the rest at 30% discount.
  5. Take a vacation!

    6.  

     

    PS If you think you know when the first 1000 DJIA point drop is coming, email me. If you are right, you could win a prize.

    TO BE CONTINUED

    © Henry Weingarten
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