Wall Street Next Week FEBRUARY 16, 2004

WALL STREET, NEXT WEEK

Financial Astrology for successful investors and traders"

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WALL STREET, NEXT WEEK: FEBRUARY 16, 2003
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

AMERICA FOR SALE
U.S. Trade Deficit Hits Record in 2003. The annual trade deficit was 17.1% larger than the previous record shortfall of $418 billion posted in 2002. The United States record $489.4 billion trade deficit for 2003 covers a wide range of foreign-made goods, including cars, clothing and TVs. The Bush administration is allowing the US dollar to fall because they believe that this will over time, correct the trade balance. A Chinese Yuan adjustment is also coming as it is most politically expedient before November’s election. However, that will simply trade some of China’s US deficit with its Asian competitors. Alan Greenspan publicly states that the US dollar decline doesn’t given the FED CONSIDERABLE CONCERN at this time. If I really believed Alan believed that, I would be even more worried than I am today!

The US Dollar Index is struggling to hold 85, but is likely to move lower sooner or later. Many sophisticated investors are concerned that if foreigners suddenly become spooked and start dumping their U.S. holdings, stock prices could plunge and interest rates rise.

The usual seasonal Winter correction could begin as soon as US markets open Tuesday. However, given this is options expiration and there are several key economic reports later in the week, it could wait as long as Tuesday February 23. Then the question will be: Will that move be a one/two day wonder or the start of something bigger? Stay tuned.

HYDE PARK SOAPBOX
The good news of having US interest rates so low is that will translate into more American companies falling prey to M&A. Then if/as the US dollar falls further, US companies become globally cheaper, thereby encouraging more transborder investments. We can look forward to seeing bigger bonuses for US investment bankers. So why worry about more good back office jobs being replaced with McJobs, if job seekers get lucky! Stock prices for acquired companies will rally and I don’t mean just mousey ones like Disney.

TRADERS: New Market sentiment Tuesday February 17.
INVESTORS: February 23/24 is coming. Be prepared?

KEYDATES:       FEBRUARY 17
DJIA:                   S1 10500 S2 10400 S3 10250 R1 10627 R2 10666 R3 10737
NASDAQ:        1980 Support, 2050 Pivot 2100 Resistance
US Dollar:           Key Support Level 85

NEW MARKET SENTIMENT: FEBRUARY 17TH.
DON’T BUY AND HOLD: THE STOCK MARKET IS ON BORROWED TIME. ELIMINATE MARGIN DEBT, BE HIGHLY LIQUID, AND KEEP A BALANCED AND DIVERSIFIED PORTFOLIO!
12/31/2003 EOD:    SPX   1111 DJIA 10453 NASDAQ 2003.
FAIR VALUE:        DJIA <10,000,    NASDAQ <2000, GOLD >400

2. Whether markets stay down after Tuesday February 24 until Mid March, or simply trade in a range, two key market rotations are likely at least short term:
1)    A move away from Nasdaq speculations into M&A speculations.
2)    A rotation into predictable and boring, especially US exporters who will continue to benefit from continuing US dollar weakness.

One obvious and key beneficiary for the late March/April tax rally will be dividend and income stocks.
"For some of the Cash portion of your portfolio, you may wish to park it in Australian Dollars, which are currently offering a rate of 5 1/4%. I would do so until your benefit from a currency kicker advantage to our A$ target of .785 to .80." The A$ reached .7948 this past Friday the 13th.
In H1 2004 we are looking for a minimum of 4% yield; in H2 for a minimum of 5%. However, beware of US instruments offering more than 7.5% yield in H1 2004 as the principle may not be secure!
Unfortunately, few of the stocks on our list are great bargains right now. If you are a market bear, there is no rush to buy any of these stocks until their stock prices are closer to, or drop below our given value pricing. However, if you are a bull or believe Dow 10,150 is the H1 2004 floor, you can begin to accumulate intermediate term by March. “
WSNW may wish to review our S: 12 Stocks for Dividends and Income 2004-2005.

3. On Valentine’s Day, 5122 Filipino couples kissed simultaneously for 10 seconds. This “Lovapalooza” in Manila broke the previous record of 4,500 couples kissing in Chile last year. Given that Philippines is also benefiting from increasing US outsourcing to overseas labor markets, should you be doing fresh buying of PHS composite ahead of next Valentine’s day when another country may usurp their record? Yes, but only if you are a raging bull on global markets. Ditto for Chile.

4. "If history is any guide, we will have employment running back, expanding at a reasonably good clip within a short period of time."
Alan Greenspan
HW: I don’t think so Alan. It’s different THIS time.

"This year you'll see more megadeals ... the kind that transform companies."
Scott Adelson, senior managing director, Houlihan Lokey Howard and Zukin.
HW: Some like AWE and Cingular make good strategic sense, even while overpaying. Far too many, however, will be more gentrified rape and pillage and executive ego stroking.

“OPEC's decision ... is one more reason on an already lengthy list of why U.S. consumers are likely to pay the highest gasoline prices on record this year."
Geoff Sundstrom, AAA spokesman
HW: It’s a good thing the government strips out food and energy prices from core inflation. That makes me more comfortable with the fostered illusion of subdued future inflation. Yeah right!

5. Americans Pour Money Into Stock Funds in Near Record Amounts
“Americans poured a near record amount into stock mutual funds in January, suggesting that last year's rebound from a three-year rout had restored investors' confidence in stocks….
Some analysts are predicting that the market is ready for a fall of 5 percent or more because the Dow and the S.& P. 500 have been rising without such a correction for 318 days, the 11th-longest run since 1932, according to Birinyi Associates.”

An Investment Legend's Advice
“You can always find bargains [in equities] somewhere but it's difficult now."

Why the dollar will fall further
Some think the dollar has fallen too far. On the contrary, it has not fallen by enough

6. READER: I have heard on CNBC, from newsletters, other astrologers, psychics etc. that the 11th is important. Part of them say because it's going to be a big UP day and part of them say a big DOWN day. You haven't said which "pivot" position you take? Thanks
HW: If I knew, I would say. I know it is important. I am not likely to take the long side, except after the fact as a day trader and I may cover some reduce shorts Tuesday. However, should markets be moving up Monday and Tuesday, then I might be inclined to short on Wednesday.
NOTE: The 11th rallied from 11am on to up Dow 123. We went short at the close` Wednesday the 11th ahead of Friday the 13th on WSNW Alert Sell 60N.

7. HERE WE TALK ABOUT AFUND CLIENTS.

READER: When will the next press release be? Things do not seem to be moving any faster this year so far. I am really losing hope here. Please give me something positive to hope for.
HW: It has been IHI’s recent practice to do monthly or bi-monthly press releases. Given the end of the month is coming soon, it may well be in about two weeks. The local BC sales efforts are increasing and this was a key bottleneck that seems to finally be ending. There are plenty of reasons to be hopeful. Unfortunately, strong patience is still required, but it should be well rewarded later this year.
Note: As I wrote before, I believe it could be the March or April press release that may have some of the news all shareholders have all been hoping for.
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PAST WALL STREET NEXT WEEK REPORTS
FRIDAY 11 am listen to our Internet radio program TRADING BY THE STARS. (c) 2003 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 14-17, 2004 Eleventh Astrology & Stock MarketConference NYC
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