1. MARKETS
2. UP STARS/DOWN STARS
3. ASTRONUT
4. QUOTES
5. ON THE WEB
6. LETTERS

CASH IS NOT TRASH
How will President X affect the stock market next year?  Study the January 20th Presidential inauguration chart, if you quickly want to lose your Christmas Spirit.  Cynics say what matters is whether Alan Greenspan is still running the Fed, while Libertarians believe the government will be in its best operating state: paralyzed.  Perhaps, but soft landing or hard, buying and holding stocks intermediate term will be a true test of patience.  Looking through a rear view mirror, money market funds offering 6 ½%+ do not seem so bad.  Looking forward six months, it may look almost as good.

DECEMBER MARKET STRATEGY
What you buy now depends on whether you are an investor or trader and on what else you own.
Divide buying into two parts. The major part should be additions to your long term core portfolio.  The second would be trading buys now for January. Markets show a tendency to overshoot fair value, both on the way up and the way down.  One trading strategy is to buy quality stocks that have been beaten down, as they are further dumped for tax losses.  If you choose risky Internut stocks like Priceline (PCLN) make sure you sell in January.  As in 2000,sector and stock rotation next year will count as much as market timing. Study 4qtr charts of Motorola and Lucent for a preview of next year’s market action in many portfolios

This month I will be experimenting with the format of Wall Street, Next Week. UpStars/Down Stars will now become a regular feature. I am introducing a new feature: Astronut, a slightly off color market perspective.  Please let me know whether you like it or not. Any constructive suggestions for changes are most welcome during our December makeover. Please email WSNW Suggestions.

TIME TO REVIEW YOUR PORTFOLIO.

KEY DATES: December 4, 6
DJIA:  BUY
NASDAQ: BUY
TA100:  Trading buy or begin long term accumulation

2. GE downgrade to Under perform. While GE will continue to meet all earnings estimates for the foreseeable future, like the Nifty-Fifty before it, this stock is just too expensive.  Sell or write June call options. In researching my January report on GE for Istash.com, I found some old light bulb jokes. Remember “How many stock brokers does it take to change a light bulb?  There are two classic answers:
(1) "My God! It burnt out!! Sell all my G.E. stock NOW!!!" or
(2) Two. One to take out the bulb and drop it, and the other to try and sell it before it crashes (knowing that it's already burned out).

3. Middle East Economic Brief: Demand for Viagra has been on the rise in the Arab markets. This suggests that Oil prices will remain higher than expected for some time.

Wal-Mart Stores is getting romantic for the budget-conscious this holiday, marketing 60-cent scented candles and $99 engagement rings. Given that finances are the number one problem issue in marriage, telling your fiancée that her love is not worth $100, may not be the best start.  Avoid WMT and many retailers like the Grinch that stole Christmas in December until their stocks weaken further to a 50% retracement from their annual Highs.  Best Buy (BBY) is an example of one possible short term trading buy.

4. “The Nasdaq is NOT down a lot, it is UP a lot [from October 98].”
Philip Roth, Morgan Stanley Dean Witter
HW: It is all a matter of perspective. Yours I agree with, as has often been the case in the past.

"We all sit and wonder how companies will ever make any money."
Mark James, Telecom analyst, Nomura
HW: That is why we were very bearish on most Telecoms earlier.  Currently, some like RCNC may become attractive takeovers, while others like ATT, AWE, DT, Motorola and Telus have some room to grow.

"Clearly, we overdid it on the upside and we're going to get to a point where it overdoes it on the downside. Then, we're going to start all this over again."
Barry Hyman, chief investment strategist, Weatherly Securities
HW: Clearly.

5. To Everything There Is a Season: A Look at Calendar Effects.

Market Thumping to a 1970's Beat

6.  READER: I'll have to disagree with Henry. The chart shape, momentum and lack of response to high Put/Call ratios suggest to me that the greater risk is to the downside….
I'd expect a bounce whenever "they" announce Bush is pres (or even Gore), but think that down 500 DJ will be much easier than up 500 DJ. As always, I reserve the right to be wrong.
HW:  10,000 before 11,000?  Maybe, but I am betting 10,800 before 10,200!
PS All market pros reserve the right to be wrong.  Only broker’s clients expect perfection!

READER: Does borrowed US money being moved to Canadian Bonds make financial sense from your point of view?
HW: The Canadian Dollar is near a bottom, which is good. The US Dollar is near a top, which also is good.  However, we are forecasting Canadian bonds, like US bonds, to devalue short term.  If/When a .50 point rise in Canadian rates is done, then we may also be buying Canadian bonds.  Alternately, one could speculate in the futures markets and buy Canadian Dollars now and then in a couple of months, buy Canadian bonds.  However, THIS NEVER SHOULD BE DONE WITH BORROWED MONEY FOR SPECULATION.  Finally, there is the option of buying Canadian stocks.  Many are now forecasting Canada to be the best performing G7 country in 2001.  We said it first.

READER: The Fed really ought to go to neutral bias; do they really want a recession?
HW: There is more short term danger from inflation at this time than recession

READER: The tech stocks rallied big-time today (11/24). Do you think this is the beginning of a major move through early to mid-January? If so, do you recommend we buy stocks that have begun moving up and then immediately employ stop-losses? If so, what stocks do you recommend for a 25% to 50% momentum play?
HW: I don’t see 50% short term appreciation for quality TMT stocks as we have more tax loss selling ahead in December.  However, there are plenty of beaten down tech stocks like Compaq and Dell as well as Telecom stocks like T can return 20%-25% “safely.” Finally, if Lucent (LU) gets a “GE” President, it will easily get 25% and perhaps 50% in short order.

READER: I am unable to unscramble this Downloaded file.......... Help!!!  I tried to use the MIME decoder and it cannot decode it either.
HW: This is a problem with AOL 6.0- please complain to them (or change ISPs).  Simply go to the premium silver area of our website, where you can read online the current issue at Current Wall Street Issue.

READER: Could you please explain what is meant by "January effect buying"?
HW: Due in part to December tax selling, Technology stocks and small cap especially, often rise in January.  These days much of the rise can come in late December (merged with the “xmas rally) as it is now a fairly well know, tradable, and therefore not as reliable indicator as previously.

READER: I subscribed to the silver investing subscription 2 weeks ago, and have received 2 weekly letters from Wall Street Next Week.  I like what I see in your newsletter and would like to subscribe to the
gold subscription. I have paid $300.00 for the Silver.  Could I send an additional $700.00 and start a gold subscription? I think that your newsletter is the missing link that would complement my other reading material.
HW: Yes.

READER: Do you think the NASDAQ is going straight down to 2500 or lower now?
Do you still recommend YAHOO at 33?  It's just about there!
HW:  Yahoo is worth about 22, so buying at 33 makes sense if there is a post tax selling rally into Christmas and January.  However, Yahoo should be exposed to HEAVY Tax selling from owners above 100.  So I would call it a trading buy (to be closely stopped).  I don’t believe Nasdaq is going lower than 2500 in 2000.

Beginning 1/1/2001: Gold will be $1500 one year, $2500 two years and $500 quarterly.
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