WALL STREET, NEXT WEEK

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WALL STREET, NEXT WEEK: DECEMBER 10, 2001
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

WHY BE BULLISH PAST DECEMBER 2001?  Let us review the reasons why we have been bullish:
Because the market wanted to go to 10,000 and 2,000 [Been there, done that, bought the T-shirt];
Because another war victory rally is coming. [Old news];
Because interest rates are so low, stocks will outperform cash and bonds in 2002. [Old news];
Because the last pass of Saturn-Pluto is May 2002. [Are we there yet?];
Because Jupiter opposes Neptune September 11, 2002 [We are not there yet.];
Because it is fun to squeeze shorts. [Enough is enough.];
Because Xmas is coming. [Ok but that will be over soon. Time to make the donuts].

DECEMBER MARKETS: PROFIT TAKING, TAX LOSS SELLING, AND A XMAS RALLY.
The bear market rally from September to the present has briefly paused. While we expect markets to move higher towards Christmas, We advise WSNW subscribers to begin reducing stock holdings over the next two weeks. The question is what to sell and when? Technology exposure should be reduced 15%-25%, as we think prices will be lower in early Spring.  How far in advance of December 24th? We are taking it stock-by-stock, sector-by-sector. 

LIFE, LIBERTY AND THE PURSUIT OF HAPPINESS VS SHOP TILL YOU DROP
Encouraged by a 4% increase in sales on what is traditionally the nation's busiest shopping day, Treasury Secretary O'Neill said the struggling U.S. economy was headed for recovery. “I think if you look at the date on September the 10th, we were in the beginning of a recovery phase, and I think we've moved back there,'' he said.
HW: Wrong, the economy was just beginning to slow down. The 911 crisis was both Danger + Opportunity.  I hope we are not going back to business as usual.  

HOW HIGH IS UP? December trading targets CAN approach previous highs:
DJIA 10609, SPX 1226, NASDAQ 2100. They could be even closer to our original forecast of DJIA 10809 and NASDAQ 2542, but that may well be December 2002, NOT 2001!
RAISE CASH, ELIMINATE MARGIN AND REDUCE MARKET EXPOSURE.

KEYDATES:    December 11, 14
DJIA:               10,000 PIVOT
NASDAQ:       2100-2200 Ceiling
EURO:             Continue long term accumulation

Now THERE IS LIGHT AT END OF THE TUNNEL as Saturn-Opposition Pluto ends May 2002!
Investors: REDUCE Technology even though FALL 2002 markets will be HIGHER than today.

2.  Our December Stock of the Month pick was Halliburton (HAL) which closed at $12 Friday. Currently at a 9 year low, we believe the market has exaggerated on the downside as its price too heavily discounts the company's asbestos exposure   OPEC should reduce production 2 million barrels in January, plus, HAL has friends in HIGH places: Halliburton was run by Vice President Dick Cheney until August 2000. We foresee $14 to $16 short term, and $18 intermediate term.

One obvious post 911 play I missed was the videoconference industry   Travel and security concerns plus the growing interest of distance learning have skyrocketed usage as much as 600% since. 9/11.  While this sector has already moved too far, it pays to selectively accumulate upon weakness stocks such as Adtran (ADTN), L-3 Communcations (LLL) and Polycom (PLCM).

3.  According to a recent WSJ article, Lipstick sales are red hot.  “The reason is that women traditionally turn to lipstick when they cut back on life’s other luxuries”.  “When lipstick sales go up, people don’t want to buy dresses,” says Leonard Lauder, chairman of Estee Lauder.  Who could not love the ad for Revlon’s Absolutely Fabulous lipstick showing a woman in front of a stock-trading floor with the caption, “On a bad day, there is always lipstick.”  Still Revlon stock (REV) doesn’t excite me much. We prefer Shiseido (SSDOY). It is a better buy now, especially given the recent birth of a girl by Crown Princess Masako of Japan.

Firm chooses staff by blood type
A Chinese firm will only employ people with a certain blood type because it considers them more stable. The Shanghai company, in a job advert for a sales director, specified only those with blood type O or B need apply.  The company is one of several which have put such constraints on applicants recently.  However, we also note that the Yuan valuation debate is gaining strength. The price of the U.S. dollar on China's black market dropped to the lowest level in history and, two weeks ago, for the first time, it was lower than the official rate. So unless you are a TYPE A personality, be extra cautious and you will sleep better avoiding CHINA until mid-2002.

4. "We expect the unemployment rate to continue to rise in the coming months, peaking at 6.5 percent by next spring."
Stephen Slifer, chief economist. Lehman Brothers
HW: We agree with your timing, but believe, as well as hope, your numbers are a bit extreme.

“The economic recovery is here.''
David Littman, senior economist, Comerica
HW: Not so fast.  The bottom is in.It will take months and months for a real “recovery.”

"You have a boatload of congestion between 2,000 and 2,200 points going back from April to August on Nasdaq, and 10,100 to 10.500 on the first go round on the Dow. On the S&P you have 1,165 right up to 1,230 on the first go round."
Gary Kaltbaum, market technician, First Union Financial Network
HW: I will be selling into this resistance, as it could hang up the market well past Spring 2002!

5. Beware the Perennial Optimists

Russian Economist Theory Returns From Exile

Ten Guidelines for a Stellar Performance
Wall Street Subscribers can look at my contribution to the Global-Investor Book of Investing Rules.

6.  READER: Re: Dec.3/01 newsletter, "Investors to reduce exposure to technology".  Do you also mean reduce exposure to telecommunications.  Are you expecting a major correction in these sectors after war and Xmas rallies?
HW: Yes, especially for companies Cisco, Lucent, Motorola and Nortel.  Undervalued companies like Cable & Wireless, (CWP) and Deutsche Telecomm (DT) we are more likely to hold or buy.  Profitable companies like AWE and NOK we are likely to buy/trade on weakness.

READER: I'm very confused about Japan.  It seems one day they're on the brink of collapse and the next, everything will be ok.  Do you have a forecast/opinion?
HW: Yes, but there are two Japans to consider.  There are export companies like Sony, Toyota, Honda and MC, which are highly profitable, especially with the undervalued yen.  Then there are the majority of people along with the banks that have yet to fully write off the excess years resulting in a large number of businesses that WILL go bankrupt.   For 2002/2003 we are more positive on Japan.  Please re-read our 2002 market forecasts on our website for more.

READER: I see very nasty pullback after this peak... so I would wait until at least Dec 18- 19-21 to do any buying for yr end rally.
HW: Except for special situations, I agree it is best to wait for tax selling, before final buying and/or rotation for 2002.

READER: RE: HAL: buy it at 8.715, too early....
HW:  Your advice is too late for us. We already bought from $11.60 to $13.60, official MOC price $12.00

READER: They are selling the shit out of this stock [HAL].  This is WAY overblown!  I picked it up at 12.85.  Still have a target of 16.00 or are you lowering targets? Is the Risk/reward all that good?
HW: I like it and keep buying. Short term is $14.50 to 15; intermediate term our price target is $16-$19.

HW: RE: a GREAT R/R play.  I'm not a full time trader I'm a musician and to me R/R is Rock and Roll to a military person it's time off Rest and Relaxation. What is R/R to you? Please advise.
HW: Risk/Reward.  R/R plus probability is what trading is ALL about.

READER: I recently subscribed to the silver edition and am considering upgrading to the Gold Trading
edition. Will I be able to apply any of the $360 towards the $1500 cost of the upgrade?
HW: Yes, of course.  We will prorate it at $30 a month. If you have been a subscriber for one month or less, you would be charged $1140 ($1500-$360); if two months, then $330 credit or $1170, etc.

READER: This is my first sell alert since I've been with you I wonder if you can help clarify your alert. As of now (2 PM et) the Nasdaq is down about 10pts and throughout the day has never reached 1970 OB, if it stays at this level by end of day, is this still a recommended weekend short or do we wait for next weeks rally to sell into?
HW: First, all alerts should be confirmed by your own work.  Second, they are end of day, like buy alerts, unless you have a personal signal confirming a better entry such as the time and price our alert was issued.  However, in this case, a number of price targets were not met. Sell the stocks that reached our alert, or if confirmed by your own work, go short on Friday [November 30] market close.

READER: In the daily commentary you say "Looks like we were a little early with our first buy on ENE! Yesterday we bought at .80." I'm curious, why did you not buy/recommend ENE last Friday when it was at .26? I'm wondering if this is the sort of instance that no amount of astrological or technical expertise can predict unless one is on the inside…. The reason I ask this is because you mentioned that this year there were going to be a lot of "Enron-type" stories and I just curious if these plays are total crap shoots or is there a way to get in at the bottom?
HW: We recommended it to platinum at .40, but to gold at .80, as there was less risk later at that time/price.  We looked at it at .26 but having already bought earlier, we did not choose to add, given such high risk. As to future ENE plays, look who is on the line. With ENE, ALL the big boys were, therefore it may not fail.

READER: Could you give an update on IHI* as to plant status, new equipment arrival update, etc. There are lots of doubters showing up on the web.
HW: It is natural to doubt, as there have been so many previous delays. But I continue to repeat that I see progress on all fronts.  As per their latest press release, I feel confident factory production will begin in December.  At a recent dinner with the president of IHI, Roger Rached, he mentioned to one Bay street broker how he was looking forward to the day when IHI shares are above C$10, so that all who had bought IHI shares would have a profit.  My only question is: Will this be in 2002 or 2003 or 2004?

READER: Could you explain a bit about the mechanics of trapped shorts, as it relates to IHI*'s price?
HW: Happily.  If/when IHI moves to a more senior exchange like the TSE, a new cusip number will be issued.  ALL stock shares are called in and then reissued.  This will effectively cause ALL undeclared shorts to cover, i.e. the immediate purchase of 7.2 (?) million shares in the market AT THE MARKET!
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(c) 2001 All rights  reserved.  The Astrologers Fund  "Always a Stellar Performance"
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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.
INVESTORS ARE REMINDED TO PERFORM THEIR OWN DUE DILIGENCE BEFORE MAKING ANY INVESTMENT DECISION. ALWAYS INDEPENDENLY INVESTIGATE AND FULLY UNDERSTAND ALL RISK EFORE MAKING ANY INVESTMENT.
 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.
ALWAYS CHECK WITH YOUR LICENSED  FINANCIAL PLANNER OR  BROKER  BEFORE BUYING OR SELLING ON THE RECOMMENDATIONS  OF  THE ASTROLOGERS FUND  Inc.
* IHI is an AFUND clients.
** From Cancall (O.CCCA) 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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