WALL STREET, NEXT WEEK

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WALL STREET, NEXT WEEK: MARCH 15, 2003
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

INFLATION AND DISINFLATION
If a tree falls in the forest and no one hears it, was a sound made?
Is there inflation if there is no PPI report?
Food, energy, housing, insurance, education and medicine are all rising, but underweighted in the CPI. 

SLOWLY, SLOWLY THEN SUDDENLY
Last week, smart bullish investors received the 5% Q1 pullback they expected. If markets hold above 10100 this coming week, they expect a rally to new highs [-->10850].
Bearish investors see longer term technical damage, but that may be still early to Sell and Hold.
It is easy to make a very long list of market dangers. There are literally dozens of potential triggers that could drop the market closer to value.  Of the potential good news, there are four: the possibility of stronger corporate earnings, plenty of cash on the sidelines, continued lower interest rates offering few alternatives and the capture of Bin Laden.  The R/R definitely favors the bears, however, the probability favors the bulls in the second half of March, just as it favored the Bears in the first half. 

TRADERS: The short term correction may be ending this week, especially if the markets are not unduly worried on the 15th and 18th.
INVESTORS: Dividend stocks as well as low debt and positive cash are likely to be favored intermediate term buys.

KEYDATES:        March 15, 18
DJIA:                   PIVOT 10250 S1 10000 S2 10100 S3 10250 S3 R1 10400 R2 10500 R3 10650
NASDAQ:           1900-2020 Trading Range
SPX:                    1111 PIVOT
GOLD:                390 Support

MARKET SENTIMENT: OPTIMISM, RETHINK AND THEN SKY’S THE LIMIT!
DON’T JUST BUY AND HOLD: BE HIGHLY LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
12/31/2003 EOD:    SPX   1111 DJIA 10453 NASDAQ 2003.
FAIR VALUE:        DJIA  <10,000,    NASDAQ  <1900, GOLD >400

2. Depending on Monday’s stock action, we could soon be seeing a short term tradable rally either next week or the end of March. However, I have strong doubts whether such a rally will last well beyond April 15th.  I realize many WSNW readers do not fully share my bearish sentiments.  To accommodate them and allow them to “make more money with less risk”, I will be adding a new premium feature for all our WSNW subscribers, similar to our platinum Watch list. This will be a potential  buy and sell watch list across a broad category of stocks ranging from watching  small caps such as JADE and EGOV to TMTs such as HPQ and T.
These will not be special situations, but stocks that are likely to outperform in a bullish phase of the market.  We will give both our bull market price targets and our value numbers (where a bear like me would buy).
We will also in April give some favored shorts, for those who like to balance out their portfolio.
WSNW subscribers can visit our S: INVESTING WATCH post next week.

3. The following was pre 311:
 "Straight after 9-11 prices were pretty high," said Julian Taylor, head of terrorism cover at the world's largest insurance broker, Marsh, a unit of Marsh & McLennan [MMC].  Stephen Ashwell, a war terrorism and political violence underwriter at Hiscox [HSX.L], said that rates have fallen by 50% since 2002 and could fall 10 to 15% this year. "There was a stage when if you were a cheese farm in Finland you would be rated on the same level as an office block in New York because it (terror insurance coverage) was such a rare commodity."
I believe it is not likely that terror insurance will drop now, except for Finish cheese makers.  Obviously terror risk models changed dramatically last week. Previously we have highly rated the insurance sector. This past week because of more good earnings that we expected, (the good news is now largely built in), we are now downgrading this sector from BUY to Out Perform.

4. “The enthusiasm is over. The indexes are going to fall further as there is no good news to be seen. Earnings estimates are going to be revised down rather than raised.''
Christian Saalfrank, manager, Helaba Invest
HW: That is reality, but markets often don’t reflect reality short term.

"Our analysis found the Dow average to be marking time so far in 2004. It was directionless at the end of the month, and this could continue."
Lakshmi Bhojraj, director of operations, Parker Center for Investment Researchat
HW: From an intermediate term perspective I agree. From a short term perspective, the decline may be over next week and a short term seasonal tax rally could follow.

“Until we see some kind of catalyst other than what I consider cautious comments around mid-quarter updates, we're not getting people to pay higher prices for stocks. People are a little nervous about 2005 numbers, when everybody is looking for valuations to peak.''
Robert Arancio, head of Nasdaq trading, Lehman Brothers
HW:  That is like being “a little nervous” about terrorism.

5. U.S. housing boom poised for a bust

Finance: an I-Bond in Every Portfolio

The Bulls Are Back. The Brokers Are Wary.
”In light of the markets' run-up in the last year, many financial advisers say their clients have become increasingly bullish, perhaps excessively so.”

6. READER: RE: I agree with your analysis .... Will you please give us at least a "Spring Comment" on the Astrological Outlook for Kerry and Bush in November???
HW: One of the cardinal rules in prediction is the need to be objective.  I have NEVER been more emotional about a presidential election in my life. Therefore I am not making a forecast at this time.  Other astrologers believe Bush is at a cyclic low point  over the next two months and thereafter it improves (but not dramatically).  It then is hard hit in April 2005.  This suggests a close election. Should the election be held in the next two months, Kerry would have the best chance of winning and should Bush win, in April 2005, he might be sorry he won.
 
READER: On your web site for the daily update you list PPI on Fri, but this has been delayed indefinitely.  The Jan PPI has already been in delay for a month and now the BLS is delaying the Feb PPI as well.  They claim it’s due to some conversion to new categories etc.
HW: Yes, this is the best way not to have inflation- don’t report it!

READER: The prognostication by market timer and Afund founder Henry Weingarten to beware the 23rd and 24th looks a bit more prescient as the market continued to tank and other gurus pitched in on the party-pooping. Retailing and the January index of consumer confidence could be the Cooler if numbers don't come in just right.
HW: Yes, but given this is more public knowledge, even though the market is starting to in right direction [down], it may bounce up for a while first.  We continue to expect choppy markets and intend to short at appropriate cyclic tops, more than buying the dips at potential bottoms, given the R/R.

READER: “Re: Melbourne pharmaceutical group Acrux will have its female Viagra equivalent developed in the US…. the spray-on Testosterone MDTS is the first to address sexual dysfunction in females.”
M says that it doesn't work and that the research project on it (in Europe? don't know) has stopped.  Apparently, women don't get turned on as easily as men.  Surprise!
HW: Good thing I just want to buy A$ and not invest in this Astronut company. I guess this means I will have to continue to satisfy my wife the old fashioned way! ;)

7. HERE WE TALK ABOUT AFUND CLIENTS.
GOLD is coming to a time/price pivot.  Gallery’s [GARQF] chart for April remains promising, with a good short term trading R/R.

READER: Every year you say that it [IHI] will happen very soon.  Just like right now where you say you expect something to happen within end of March to May of this year.  Should a reader not believe you then?  
HW: I continue to say that because of IHI’s strong natal chart which constantly gives them new chances.  Very few natal horoscopes are that strong.  It is my belief, just as if it does not mature then, it has another chance over the summer. VERY FEW natal charts are that strong. 
Note: This is also true for the horoscope of IHI’s president.

READER: Why do [IHI building] permits take so long?
HW: Vancouver is one of the toughest ZONING cities when it comes to building permits. This is one reason it is ranked among the top ten cities in the world for livability.  Another is that IHI has not been the fastest company in the world when in comes to execution. However, they have historically come through. That is my reason for continuing to have reasonable hope.
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PAST WALL STREET NEXT WEEK REPORTS
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(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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