WALL STREET, NEXT WEEK

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WALL STREET,  NEXT WEEK: APRIL 23, 2001
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

Thank to Mr. G, the world is once again safe for democracy. I don’t know if my urging in our last issue caused it, but be that as it may, I am very cautiously optimistic NOW!  Markets CAN hold DJIA 10,000 and NASDAQ 2,000.  We CAN gently deflate and then later inflate. But May may be investors last reprieve. Remain cautious, use stops and reduce margin and debt.

THE BULL CASE- CLIMBING THE WALL OF WORRY
If you sold early spring, you were burned in what was thought to be a classic bear market rally. Although most fund managers are not yet bullish about future corporate profits, they believe inflation is benign, interest rates will be eased if necessary, and therefore the economy will gradually improve. Most investment professionals believe stocks will be the best performing asset class for the next 12 months, and plan to switch out of bonds and cash. Many equities are still slightly undervalued.

THE BEAR CASE- AN OFFICIAL RECESSION IS COMING
As for the DJIA, another re-test of 9106 may still be in the cards, but first it would have to take out the "official" bear line at 9378.  Could that happen? Yes, the market IS overvalued by traditional measures, with the S&P more than 50% over its long term average of 15.  Will that happen though?  Or will the markets meander through the next 12 months in a trading range and let profits eventually grow? Will the market begin to climb the wall of worry after the next test down? Stay tuned. 

HOPE FOR THE BEST; PREPARE FOR THE WORST: CURRENT RECESSION ODDS <10%

While there are likely to be big inflows into the market before the end of the month (fear of missing out), the next 30 days have great risk and/or reward for star conscious investors and traders. This is a mixed picture, with some (final) crises (foreign) possibly dead ahead.  Next week, corporate news may not be great.
Watch Tuesday carefully, invest in quality and trade only extremes.

KEYDATES:       APRIL 24
DJIA:                   10600 Pivot
NASDAQ:           2200 Pivot
XOI:                    P3 565 P4 580

2. NY Times (NYT) for the first time in its history is allowing personal advertising. Starting April 22, it will accept advertisements from readers seeking romance.  Despite having a great franchise, which it still has yet to learn how to exploit, and the addition of this obvious “hot” advertising revenue, we see no reason to buy NYT or any other Media stock at current valuations.  We maintain our under perform rating on the sector as this time.

With the XOI reaching twice our P3 target of 565, we are recommending reducing oil/energy portfolio holdings from 20-50%.  While 580 IS possible, some selling or stop placements are advisable before the middle of May as Jupiter is opposing Pluto on May 6th. Our twin favorite refiners, VLO and Sun, were downgraded from strong buy to market perform at 47 and 38 (future) respectively.  After a 12-15% correction, we will review for a Summer upgrade to outperform.

Citibank ( C ) is being newly rated an outperform from 48-50: our 12-18 month target is 60.

3. Outback Steakhouse (OSI) will probably run out of baby-back pork ribs that it imports from Denmark if the ban isn't lifted soon. If the company does run out, the restaurant chain said it will sell ribs from the US, and may increase prices. “While it's not a major issue for us, it's not a minor one either,'' said Robert Merritt, Outback's CFO “We can't become Outback Tofuhouse.''
While we are bullish on eating (Jupiter moves into Cancer this July), we prefer EAT to OSI.  As to Denmark, now that its market dropped well below 300 as forecast, we are ready to upgrade it from under perform to market perform as soon as this ban is lifted.

Reebok International (NYSE: RBK) and Clearly Canadian Beverage Corporation (TSE: CLV; OTCBB: CCBC) are launching Reebok Fitness Water, an enhanced water beverage featuring essential vitamins, minerals and electrolytes. Reebok Fitness Water is targeted to consumers who are committed to their health, nutrition and exercise regimens and looking for variety in their alternative beverage choices. So far, so good. However, high priced sneakers paired with high priced water, are not recommended buys for the mildly recessionary times ahead.

4. "Now is the time to buy more computer-related stocks for investors like myself who have an investment horizon of longer than a year."
Nobuaki Kurisu, manager, Sumisei Global Investment Trust Management
HW: I believe it was last month. However, long term, and short term yes. Intermediate term, I don’t think so.

"It's impossible to know if this rally has legs over the longer term. [But] for the short term, the tape action is telling us that the worst appears to be over."
Peter Boockvar, equity strategist at Miller, Tabak
HW: We expected a Spring bottom by May, if it was not March/April.

"While we may see some pullback because this has been such a big day, I do think the trend is upward from here. There's a strong correlation between aggressive Fed action and improved stock market performance."
Matt Brown, head of equity management, Wilmington Trust
HW: Yes, for good reason you are right on both counts.

5. Yahoo - U.S. strategists' asset allocations for a table of recommendations by top Wall Street firms on how clients should divide their money, by percentage, among assets in a model portfolio, as well as the firms' 2001 year-end price targets for the major stock indexes.

6. READER: It appears as if you are going into a cautious, defensive mode, i.e., anticipating a fairly significant pullback before a possible move up to 2500. Am I correct?  
HW: Our initial April trading call WSNW Alert 51A was for a short term high into April 20th.  That trade was completed at Nasdaq 2200 and DJIA 10700. We don’t yet know what next week will bring- some down testing and/or frantic buying. We plan to take profits at key points, e.g. IBM at 118 and review and most likely reduce holdings by Thursday. Any pullback may, or may not, be significant. We are unsure and playing it one day at a time. 

READER: Henry, I am still not a believer but I will admit you are doing something right. In an earlier post you mentioned an end to the current rally soon.  Was it April 20 or 27 or in the middle and why?
HW: Our date was circa April 20 for this run up. It is the end of the short term positive period and ahead of the new May market. Remember IBM is one of my two single favorite long term core positions and we expected GOOD NEWS Wednesday given its stellar horoscope for 2001.
Still, we took some natural profit taking at Nasdaq 2200.  Astrologically, there is still some negative news for May, but then after that, fresh bad news is basically over until Summer.  Then, we next begin to climb a wall of worry until FOMC May 17. Whether Alan cuts again or whether he deems it not necessary, which is may or may not be, we could see more selling and another down test to see if DJIA 10,000 and 2000 are the new permanent plateau. Much of this should be known on the day after the New Moon- April 24th, which also happens to be May’s market marker day, which will foretell the market zeitgeist for the month of May.

READER: I see a rally until the 23rd then a retest of some lows.  After earnings season, unless Alan acts, we go from rally to vallies..........again. 
HW: That is one possible scenario.

READER: It's beginning to look like investors aren't looking with pride toward the opening of the IHI plant, as if we're closing in on bad news..reminds me of another mis-alignment of stars: CISCO.
Hw: Perhaps, but I think not. Besides Cisco is looking better and better all the time and it seems like the BAD news is finally built in.  In both cases, we bought too early, but these are both long term core positions for us.

READER: Do u think we will see 10,000 Dow again soon?
HW: If we do it will be next month, but my bet at this moment in time is that we may not drop past 10384.

READER: Does the surprise drop in interest rates change your forecast? Do you still see a bottom in May?
HW: As you know, we came close to our numbers already or exceeded them, and we were delighted by Alan’s move. We will be reducing margin in all but the most aggressive accounts over the next weeks, as well as placing a number of close stops or recommending writing some May calls. Our midyear update will be given at our NY CONFERENCE 2001.
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PAST WALL STREET NEXT WEEK REPORTS
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Author: INVESTING BY THE STARS, THE STUDY OF ASTROLOGY,TRADING BY THE STARS (01)
May 17,2001 Ninth Annual Astrology & Stock MarketConference NYC 
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* We will be reporting on Cancall (O.CCCA) aka VuScreennext month. This is a company that I own  2 million shares (free)with 10million additional shares optioned at .02. I have also bought inthe openmarket for clients and myself. Naturally I am MOST eager to seethem becomeVERY successful.
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