1. MAY MARKETS
2. SRI
3. QUOTES
4. ON THE WEB
5. LETTERS
1. WILL DJIA9800/NASDAQ 3000 SUPPORT BE BROKEN BY STOPS OR WITH VIGOR?
Is the bear market over? Of course not. It has NOT really yet
begun! Everyone still wants to own stocks-which by my definition is NOT
a bear market. After Saturn squares Uranus this May, the entire picture
may change as technology (Uranus) is challenged (Square) by Reality (Saturn).
We need to see a drop below 9200 and eliminate 1999 profits in the Dow
or a similar drop below 2200 for Nasdaq. That may not happen in an
election year, but there continues to be significant Value risk above those
numbers. Until then, don't expect us to begin to get seriously bullish.
The Conference Board, which took over production of the US Leading Economic Indicators from the Department of Commerce in 1995, will soon produce Leading Indicators for 25 countries around the world. This means on paper, at least, EVERYTHING in the whole world will be wonderful very soon!!!
KEY DATES: April 26, 27
NASDAQ: P1 3400 P2 3200 P3 3000
DJIA: S3 9800 S2 10,000 S1 10,200
R1 10,800 R2 11,000 R3 11,200
3. "He who lives by momentum must die by momentum."
Lex Column Financial Times
"The 'conventional wisdom is wrong. Gold is becoming another commodity
and it's a commodity with an enormous inventory problem.''
Peter Ward, gold equities analyst Lehman Brothers
HW: Even so an undervalued commodity.
3. Given the state of the environment and the world, we are looking to add energy and environmental stocks to more of our portfolios. See our SRI INVESTING posting updates for potential value buys of such stocks as HIRI and ENER.
4. ELECTION YEAR STOCK MARKET by John Crudele.
5. READER: Great call on the market. Keep up the great calls.
HW: We keep trying!
READER: I just wanted to say thank you, as my gold subscription has
already paid for itself, in multiples, in my first week of subscribing.
I have taken my profit and bought IHITF.
HW: Thank you, always nice to hear. Two smart moves.
READER: During your Wednesday audio broadcast (TRADING
BY THE STARS) you indicated you thought there will probably be one
more downward leg of the current NASDAQ bear market, and price would, perhaps,
be about 20 percent lower. That would bring us to about 3000. Is that where
you think the carnage will end?
HW: No, but think it is a "relative" certainty that price target will
be reached by mid May. After the Saturn/Uranus square, it will be clearer
where it end. Right now it is clear that it will NOT end until then.
READER: I haven't seen any comments from you expanding upon building
cash for the crash in terms of protection of cash. I view cash as
money market account held by my broker. As you know, there are several
different types of money market accounts. We have put ours into those
backed by Government Securities. Some are backed by various instruments
including "Junk Bonds". Do you agree that these are also potentially
dangerous as these Junk Bonds could default as the market crashes?
HW: Don't foresee anything that bad at this time. However, Junk
bonds are junk. If you have your money with a firm that is "too big to
fail" you are probably OK. Just be liquid, reasonably conservative and
ready to buy investments with value.
READER: I recall that a few weeks ago, the astrologers said that TODAY
[April 14] was going to be a bottom.
HW: That depends on which astrologer. Just like technicians,
we are NOT of one mind. Almost everyone foresaw April 14 as a critical
day. But we believe we will see a lot more blood spilled between
now and the FOMC meeting. Our WSNW Alert 40G- DJIA short of 11386 and NASDAQ
short of 4020,if not closed with profit, could be added to (with tight
stops). We expect to see below 10,000 and 3000 respectively before
all is said and done.
READER: Congratulations on all your excellent calls this year. I have
my shopping list ready for My. This time I took your counsel re high in
cash. I botched the Celsion and still have them but hopefully after May
they will come right?
HW: I held my CELN, but as I believe it is an intermediate term hold,
I don't consider that a botch. A lot of small caps seem to be moving
back up but I believe the broad market is likely to be hit again shortly.
At this time I recommend technical trades or technology shorts until end
of May.
READER: About 10 days ago I got stopped out of most $41,000 worth of
my stocks, and have about $9000 in stocks left. However, most of that is
in things like IHITF, AFTI and DCHT and URL.V, and they have been dropping
badly. You have said that value will prevail in this new economy... do
you consider these stocks in that favorable category? I'm concerned that
all my profits could disappear if these drop to almost nothing. Are you
recommending that people hold them at this point?
HW: I LOOK AT WHOLE PORTFOLIOS. If you are 75% in case, then
you are in very good shape to take advantage of future market bargains.
I of course like AFUND stocks (obviously biased) as intermediate term holds.
However, like all stocks they can be traded (and perhaps I should have?),
but I sold lots of OTHER stock holdings as have you. To have even 25% in
emerging growth stocks is very, very aggressive. Also, the next 60
days can be crazy, and it may be best to err on the side of caution.
YOU must have a plan that you are comfortable with. Emerging growth
stocks can get slaughtered just as the big boys. I can't say more
than this in my capacity as a newsletter writer.
READER: If 2700 is around the bottom for the NASDAQ, we might hit that
next week. Do you have recommendations on what stocks might be good to
snap up? Should we be putting in buy orders at ridiculously low prices
like ZOMX at 30 or ("shudder") CSCO at 30? How long do you think the carnage
will drag out? Through May? Could the NASDAQ bottom be as early as next
week?
HW: Csco's 52-week low was 24, so why could it not reach 31?
2700-2800 is a point where many will buy. I believe we may have a
temporary bottom this week to trade, but that pre-FOMC May 21, we will
have the lows tested once again and perhaps broken on a very very sharp
dip/recovery.
READER: I currently have IHITF, STOXF, AFTI and DCHT in my portfolios.
IHI has been holding up fairly well, but the other three have suffered
huge drops from their peaks. When sane heads prevail after May, are these
four stocks going to be looked at favorably? They are low priced emerging
growth stocks. Why do you think they will thrive? I was thinking I would
try to buy more of AFTI if it gets back down to where it was in Oct/Nov
about 0.1 to 0.2. Is this where you would be trying to buy? Where do you
recommend we pick up more STOXF (URL.V)... I know you can't actually know
anything for sure, but what would you be doing with your cash?
HW: Since I don't actively trade AFUND stocks due to potential conflict
of interest, I didn't sell during this past risk period. If I did
sell some, as traders would have, I would most likely be buying with a
tight lease (stop) as I believe they will go back up. However, ALL
stocks "MAY" be hit again next month with the exception of boring high-dividend
value stocks such as REITS. Most of our cash is still on the sidelines;
maybe I can buy IBM at 60 or better or SRI stocks like HIRI at $1 or ENER
at $8. As to AFUND stocks, we will be posting new astrological material
on them after our MAY conference.
Until then, either trade technically or invest at prices YOU feel comfortable
with to hold for a minimum of one year, e.g. Stox.com under C$6 seems like
a steal to me.
PS We longer cover DCHT and sold it in all our portfolios for both
personal and professional reasons.
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