Wall Street Next Week July 9, 2001

WALL STREET, NEXT WEEK

Financial Astrology for successful investors and traders"

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WALL STREET, NEXT WEEK: July 9 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

6, 9 OR 12?
Although the U.S. economy will continue to remain soft until the end of the year, it is likely to avert a downright recession, economists of the American Bankers Association believe. It typically takes six to nine or twelve months for the first rate cuts to work their way through the economy. The Fed began cutting rates in January so investors are looking for any signs of an economic recovery. If they find them, then a summer rally; if not, we should have a bigger Christmas rally. To date our forecast for 1Qtr 2001 for 1.2% was perfect, while our 2Qtr forecast of 0.45% remains to be seen.
Our first forecasts for the next four quarters is available to our platinum and institutional subscribers at 2002. It is unlike any I have seen and suggests many and twists and turns. The bottom line, however, is that the fat lady has yet to sing.

One of Philip Roth’s rules wryly defines a new bull market as when analysts are wrong by understating earnings. Study for example, the market reaction to Palm jumping 25% after slightly beating greatly reduced expectations that followed two earnings downgrades. Now, it is likely to be stuck in the 5.25 to 6.75 trading range for some time. Despite continuing difficult economic conditions, this is likely to be repeated with a significant number of technology stocks and suggests one winning short-term Summer/Fall strategy.

WHAT’S WRONG WITH THIS PICTURE?
Americans' personal consumer spending increased 0.5 percent in May as compared with April, while their income rose 0.2 percent.
RAISE CASH – TRADE MORE

KEYDATES:    July 12, 16
DJIA: S1 10,200 S2 10,000 S3 9800 R1 10,510 R2 10,620 R3 10,730
NASDAQ:    2000 PIVOT
NIKKEI    Long Term BUY
GOLD:    Continue long term accumulation

2. As we wrote in our AFUND 2001/2 Stock Market Forecast: “Israel's technology sector will continue to outperform given its highly skilled labor force and favorable tax treatment. However, it largely remains overvalued and bargains are still hard to come by. Unfortunately, it is best to buy only when there is blood in the streets, which is all too often these days.”
Check Point Software Technologies [CHKP] is now VERY undervalued under 45. We repeat our June 11 recommendation both as a positional trading buy to 52-55 and for long term investors to 60+.

3. French consumer confidence slid again in June, as concerns about deteriorating living standards grew. Helping this, France's agriculture minister Jean Glavany is battling to ensure that fast food does not devour the planet. "This type of meal, this 'fast food' made with ground beef with a certain tomato sauce, fries and sugary, gassy drinks does not strike me as a universal dream…. Just look at the obesity level in a certain country and you'll understand why I want to spare Europeans this." Two years ago Glavany said the United States has "the worst food in the world." "My struggle is cultural -- what I have opposed and still oppose is the imperialism of a food model that wants to be the only model.” Bravo! Because of this and with Bastille Day July 14 coming up we did a perfunctory review of our neutral rating for CAC40 stocks. Food giant Dannone [DA] will remain profitable, but is still too expensive. That continues to be our view for the best of the French stocks also. Our recommendation for global investors: We see nothing special in the CAC40 above 4500 to warrant a trip to Paris in 2001.

Trees to grow on money [http://www.ananova.com/business/story/sm_338592.html]
The Bank of Scotland is helping gardeners by making compost from recycled money. The bank will hand over old notes to Dundee City Council - who already compost household waste and whisky maltings. A council spokesman said, "We can compost anything carbon-based. Old money is as good as anything."
We clearly have overlooked this frugal country, which logically should do well in any world wide economic slowdown. Why? We simply forgot about it. All we watch on our screen is Scottish Power, [SPI], with its 5.7% yield, which is rated by us a very conservative long term investment buy 28-29. What else does Scotland offer investors? I am at a loss. I will rectify on this my next trip to Edinburgh.

4. “Investors who dedicate 20% to 30% of their assets to bond funds will see limited upside, but sleep easier at night.”
Scott Berry Morningstar bond funds analyst
HW: I don’t see Bonds funds taking significant market share from sleeping pills, so we do not plan on downgrading pharmaceutical companies because of this.

"What concerns Wall Street is that the [Technology] sector's eventual recovery has now been pushed out to who knows when in 2002, rather than second half of 2001 or the first quarter of 2002.
Barry Hyman, market strategist, Ehrenkrantz King Nussbaum
HW: Why be concerned? We have been saying for more than a year that the third and final pass of Saturn opposite Pluto is May 2002.

"During the bull market, analysts were guilty of being too bullish. In the current environment, analysts could be overshooting on the downside.
Drake Johnstone, analyst, Davenport
HW: The same is true for individual investors.

5. Summer: When stocks go on vacation.
[http://cbs.marketwatch.com/news/story.asp?guid=%7B55B74C5D%2D57A5%2D427A%2DBE91%2D570C95D9AA72%7D&siteid=mkt]
"A good time to own stocks is from the start of summer through the middle of July, according a report by John Bollinger, president of Bollinger Capital Management. Afterwards, the trend for stocks is about flat with increasing volatility culminating in price declines into October, he said. So give stocks a chance until mid-July. Afterward, clean out your portfolio by taking some profits and selling off the dogs, he said. Then take a breather until October, when stocks hit their lows."
HW: Seems like very good advice, John.

Canadian equities are bargains Cheaper than peers: [http://www.nationalpost.com/search/story.html?f=/stories/20010627/602663.html]
Low value favours takeovers, higher returns ahead. Bad times bring out the bargain hunters, and the Canadian equities market is looking more and more like one of Kmart's famous blue-light specials, strategists..…
Price to 12-month forward earnings ratio
Japan: 25.4, U.S.A: 20.9 France: 20.5 Germany: 20.1 UK: 17.9 Hong Kong: 17.4
Canada: 15.2

6. READER: A short time ago I bought some CPV looking to go long for your 2002 target of 16. The recent close was at 15.20. [Friday 15.55] Do you see a higher target or is it time to take my profit and move on?
HW: Currently, “the trend is your friend”. Still, I can't answer this as it depends on the composition of your portfolio. Nonetheless, over the next two weeks, I would place a modest trailing stop if you choose not to sell at 16 and continue to move it up on a weekly basis.

READER: What you think about HWP? Do you think astrologically HWP is out of woods or is Carley going to be out?
HW: I have not looked recently at HWP astrologically. However, I didn't think Carley would do a good job when first appointed or now. I don't like to see old established cultures destroyed and not replaced with something better. I prefer competitors Compaq, IBM and Fujitsu. However, as a DJIA member, it is not likely to drop more than 15% -20% this year.

READER: Subject: DS 6-26-01 The Eclipse Gold Buy? Barrick Gold buys rival Homestake in $2.3 bln deal
HW: ABX obviously thought so.

READER: The broking house I am using is very interested in the stock [IHI] so I'm having lunch with 2 senior brokers of the firm today...
HW: Hopefully they will join in with their clients. IHI* is a great Story stock, great SRI stock, great Robotic stock, great Construction stock, great Applied Technology Stock, great Penny stock, etc. I hope to give a detailed posting on my web site next week.

READER: We weren't able to attend stockholders meeting, but were wondering if you did a walk-through the plant, and, if so, your thoughts on how far away production appears to be.
HW: Full production November/December. Several model homes should be built earlier in the fall. All depends on one potential large order (not specifically referenced). Thereafter orders will be accepted. After attending five construction and applied technology analyst IHI presentations in Toronto last week, I am more confident that ever, that IHI will succeed and become the multi-billion dollar global powerhouse I foresaw from Day 1

READER: And when is C Day?
HW: After B-Day, but before D Day.

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Subscribers please send your comments, questions and suggestions to Letters.
Silver Investing subscriptions $360 one year; $600 two years; new subscribers 3 month $125.
Gold trading subscriptions $1500 one year; $2500 two years; $500 Quarterly.
Platinum edition for money managers $7500 per year; $2500 quarterly.
Institutional rate is $2500 per month.

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PAST WALL STREET NEXT WEEK REPORTS
Thursday, listen to our ABS radio program TRADING BY THE STARS. (c) 2001 All rights reserved. The Astrologers Fund "Always a Stellar Performance"
wsnw@Afund.com 212/949-7211 Fax 212/949-7274 370 Lexington Avenue, Suite 416 New York, N.Y. 10017-6503
Author: INVESTING BY THE STARS, THE STUDY OF ASTROLOGY,TRADING BY THE STARS (01)
May 17-19, 2001 Tenth Annual Astrology & Stock MarketConference NYC

DISCLAIMER: PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE FORECASTING ACCURACY OR PROFITABLE TRADING RESULTS.
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The Astrologers Fund Inc. Accepts No Liability Whatsoever For Any Loss Arising From Any Use Of Its Report Or It's Contents. The AstrologersFund Inc. Or Its Clients Usually Holds Positions In The Stocks and/or MarketInstruments Mentioned And May Buy Or Sell At Any Time Without Notice depending on market conditions and personal financial conditions. This InformationIs In No Way A Representation To Buy Or Sell Securities, Bonds, Options Or Futures. This information is not intended to be used as the sole basis of any investment decisions, nor should it be construedas advice designed to meet the investment needs of any particular investor.
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* IHI is an AFUND client.
** We will be reporting on Cancall (O.CCCA) over the summer. This is a company that I received 2 million shares (free) with 10 million additional shares optioned at .02. I have also bought in the open market for clients and myself. Naturally I am MOST eager to see them become VERY successful.
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