WALL STREET, NEXT WEEK

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WALL STREET, NEXT WEEK: MARCH 24, 2002
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

NEW ZEITGEIST COMING WEDNESDAY
The current market zeitgeist has been FEAR ALTERNATING WITH BARGAIN HUNTING.
Witness the beginning vs. the end of last week: a Monday low of DJ 7763 and ending up 8521!
Market sentiment will change on our next market marker day March 26th.

WHICH WILL COME FIRST: DOW 8000 OR 9000?
March, April AND May markets are all highly risky for investing.  If markets can have their largest weekly rally in 20 years because of the U.S. invasion of Iraq, imagine what could happen with either more good news, or more likely, fresh bad news. Given the recent strong rally was under Jupiter retrograde, I do not know if, that after Jupiter turns direct April 3, it will continue.  While there are some more positive astrological market factors in 2003, I do not see as rosy a scenario as I did before March 19.  Instantly, our fair valuation of the US stock market dropped 500 points from 8800 to 8300. Thus we now view markets as slightly overvalued.
We now also believe that markets can break their 2003 lows: our new target DJ year low is 6900-7200.

Last week stocks rallied on the belief that the U.S.-led war with Iraq would be short and decisive. Investors are viewing the aftermath with rose-colored glasses. I have long warned to “Remember the lessons of 2000: they will repeat in 2003”. Whether that is in March, April, May or later in the year, would you have in retrospect wanted to add to your positions in January, February or March 2000?  You would have wanted to trade them, not buy them for the long term!

HYDE PARK SOAPBOX
I am sad and angry.
I forecast the first Gulf war more than 2 years in advance to within four hours.
I am sad that my prediction for the US to be at war around the spring equinox 2003, based on Bush’s horoscope and issued upon his inauguration, was correct.
I was hoping it would not be a unilateral invasion. I believed, and hoped, that the future serious economic challenges facing the US later this year and next would be resolved by a continuing slow economic recovery.
Now I fear that we could have a real recession, i.e., two consecutive quarters of negative GDP growth.  Like many have said of the Gulf War II, it could become unavoidable unless things change for the better shortly. I hope so.
 
The weighty astrological challenges to the US horoscope - Saturn going into Cancer conjunct its Natal Sun and transiting Pluto opposite Mars are serious.  These are my reasons to trade market rallies and maintain high liquidity. Investors will be very risk averse if geopolitical tensions do not subside.  Unless our Iraq victory is seen to turn around the war against terrorism, market gains are sure to be limited. The war against Iraq has serious financial consequences for the US, the world's greatest debtor. US imports exceed exports by 500 billion, or 5% of gross domestic product (GDP) annually. US debt has reached 2 trillion, or 20% GDP.

We continue to advise reducing stock exposure (selling) into any rally next week, especially if you have not done so already and if Wednesday’s Market Marker Day is not positive. 
If Wednesday is positive, we advise placing trailing stops on 15% of your portfolio and sell those positions if DJ 8800-9000 is reached with 6-8 weeks.

KEY DATES:   March 26, 28
DJIA:               S1 8341 S2 8200 S3 8000 PIVOT 8500 Resistance 8800
NASDAQ:       1335 Support 1400 Pivot 1452 Resistance
US DOLLAR:  DISTRIBUTE ON STRENGTH
TIPS:               Begin Accumulation

NEW 2003 MARKER MARKET DAY THIS WEEK!
HOLDING STOCKS IN MARCH IS MORE RISKY THAN USUAL.
LEARN THE MARKET LESSON OF 2000, BECAUSE THEY WILL REPEAT IN 2003.
12/31/2002 EOD: DJ 8341 NASDAQ 1335 SPX 879; 5 DJ Stocks offering 5%+ Dividends.

2. Putting the Swiss System Back Together
“For decades, the Swiss economy has thrived by catering to the demands of the global elite for quality goods and discreet financial services. Now that pre-eminence is cracking…In an era of globalization, bank secrecy is not enough.”
I had the pleasure of attending the second annual Swiss Plus banking forum at the Metropolitan Club in NY last month.  “As everyone knows, Swiss banks are synonymous the world over with security, stability and reliability….27% of cross-border wealth management for high net worth individuals (compared to 19% for Luxembourg, 15% Caribbean and 11 and 9% respectively for the UK and USA…. It is well known that Switzerland is a paradise for hikers, skiers and lover of cheese and chocolate. It is a perfect excuse to explore” [your investments]. Let us not forget for the first time, yachting's top prize, the America's Cup, was won by landlocked Switzerland. The Swiss boat, Alinghi, funded and navigated by biotech billionaire Ernesto Bertarelli, swept the final round of competition, defeating two-time defending champion New Zealand five races to none.

Onto specifics: Swiss Reinsurance (SWCEY), the world's second-biggest reinsurer cut its dividend for the first time since the 1906 San Francisco earthquake after declining stocks eroded investments and led to a loss last year. Switzerland's second biggest bank, Credit Suisse Group (CSGKF), has declared a net loss of 3.3 billion Swiss francs (2.4 billion US dollars) for 2002, the worst result in the institution's 150 year history. U.S. antitrust enforcers so far have blocked Nestle's (NSRGY) proposed takeover of Dreyer's Grand Ice Cream over concern it would eliminate competition and raise prices for top tier ice creams such as Haagen Daz and Godiva. Finally, the recent four year high value of the Swiss Franc was of such concern that Switzerland's central bank cut its rate to 0.25%.
Bottom Line: If you are not looking for portfolio excitement, there is obvious long term value in Swiss Ishares [EWL] under $10 and UBS, Switzerland’s premier bank under $40.

3. One rumor has the U.S. planning to substitute U.S. dollars for the Iraqi currency that bears a likeness of President Saddam Hussein. A senior official said U.S. dollars were being considered as a substitute currency because "you don't want to be paying people with a currency with Saddam Hussein's picture on it."  Personally, I believe it is a payback for Sadam demanding his oil payments in Euros instead of US dollars. That is one Iraqi policy that is certain to change after the war.

Elsewhere the dollar continues to be under attack. Imagine if the 9th Circuit Court Ban on “God” in the Pledge of Allegiance as a violation of the separation of church and state stands. If not overturned by the Supreme Court, we advise dumping the US dollar before it becomes worthless contraband. Note: EVERY US dollar bill has the words: “In God We Trust”!

Finally, why is a Color change to $20 bills imminent? Unveiling the new $20 -- an effort to thwart counterfeiters -is set for March 27.  Will this funny money be worth as much next March?  I am afraid not, especially with more tax and budge cuts. 
We seriously advise adding international exposure to your portfolio.

4. "I love when the market goes up. I hate it when it runs up [this much] in a week and a half."
Pat Boyle, head financial trader, Credit Suisse First Boston.
HW: Boyle said he's been selling stocks last week to lock in profits. I think that was very wise.

"We're really hostage to the headlines. It's a headline, emotion-driven market right now, and no one wants to get on the wrong side of a headline."
Andrew Baker, senior Nasdaq trader, Wedbush Morgan
HW: Correct Omondo.

“Every time I give Japanese policy makers the benefit of the doubt, I end up losing money.  This has been consistently true for so many years; enough is enough.''
Chua Soon Hock, chief executive, Asia Genesis Asset Management
HW: It could be different this time.

5. TIPS funds soar in popularity amid uncertainty
“Investors have been pouring so many billions of dollars into Treasury Inflation-Protected Securities, or TIPS, you'd think the U.S. economy was facing a return to the debilitating runaway inflation of the 1970s.”

NATIONAL POST
War in Iraq is not the U.S. economy's only problem.

BCA Research - Was that the low in Stocks?

6. READER: What do you understand by "hold" in "buy and hold"--two months? Six? One year? Usually "buy and hold" means "never sell". Are you saying that the stock market will be in the pits for 5 or 10 more years?
    Re:“ There is no such thing anymore as buy and hold.'' Thomas Madden, Federated Investors
    HW: I didn’t agree with you until a little after March 20 at 5:33 am Baghdad time. I do now.
HW: At this time, I am only thinking as far as 2004. I see trading, i.e., selling [buying] 10% up [down] moves as mandatory when NOT justified by economic fundamentals.

READER: How about GOLD, it's going down to $325... in yr opinion, is it a good opportunity to but it at these price ($325)? and will it going down again?
HW: We are watching very closely whether $318-$320 long-term support holds. Gold today is mostly a function of the US dollar strength. While short term it could continue, intermediate term it is less likely.  As for next week’s trading, gold could remain under pressure later in the week if markets continue to rally.

READER: You are getting your 2003 over evaluation call .. 2000 repeat that you have mentioned.... amazing what Venus/Neptune can do to people.....
HW: What is more amazing and sad is that it could potentially go even higher before reality sets in.

READER: Looks like we're going to war alone.  What say you now?
HW: I have turned from a moderate intermediate term Bull into a sad and angry Bear.

READER: Henry, I admire your advice but isn't your quote a bit radical?  59% of the country says to "go it alone" or with Britain and the other countries who are with us.  I think a new recession might be possible but I doubt it would be because of a successful ousting of Saddam.  Any further thoughts?
HW: Success is not about who wins the fighting war: that has always been obvious. It is whether a lasting peace can be won.  Bush, who is under such strong Martian aspects, will have great difficulty in this. I believe the economic consequences, i.e., a US recession, is increasingly likely, unless a more positive multilateral geopolitical strategy is adopted.

7. HERE WE TALK ABOUT AFUND CLIENTS

READER: What do you mean "The final IHI countdown has begun”?
HW: The very long wait is ALMOST over.
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