WALL STREET, NEXT WEEK

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WALL STREET, NEXT WEEK: MARCH 29, 2003
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

1. 4/5 Full Moon 7.03 am ET
4/6 Mercury SR
4/19 Solar Eclipse 9:21 am ET and Sun enters Taurus 1:50 pm ET
4/30 Mercury SD

2. TAX RALLY COMING SOON WITH OR WITHOUT MUCH GOOD NEWS
Market Relinquishes Earlier Gains “After the markets scored its biggest one-day gain since October on Thursday…investors demonstrated that they are not confident enough about the price of stocks to go home for the weekend without cashing in their profits…Next week investors will see the most important piece of economic data -- the monthly report on unemployment and jobs. That labor Department report doesn't come out until Friday, so investors will have to spend the first four days of the week betting on what the jobs numbers will show and getting ready to make a big move on Friday. “

THE REASON TO BUY: Perceived bargains or belief in better economic or corporate news ahead.
A REASON TO SELL: Markets will fall after tax time, perhaps BIG time: better to be safe than sorry.
While Value investors have little incentive to buy equities, momentum and easy money can rule H1 April 2004. We expect day traders to see a lot more greedy 40%+ daily gains like Friday with Nasdaq Transkaryotic Therapies (TKTX) and SRI microcap World Wide Water (WWAT). There remains both great underlying valuation and external market risk. While traders will be monitoring technical money flows, serious investors will be trying to anticipate which companies will make money (or won’t) and will issue more rosy guidance. Yet we advise caution, as the next two weeks are likely to be surprisingly choppy.

NO INFLATION WATCH Worried About Inflation? Here's a TIP
Inflation? Commodity prices jumped to their highest level in almost 23 years with the Commodity Research Bureau index (CRB) reaching its highest level since March 31, 1981. Retail gasoline prices rose to their highest level on record last week and airlines may raise one way fares as much as $5! Hurting even closer to home, Kimberly-Clark (KMB) said last week it would raise U.S. tissue prices an average of 6%, matching competitor Procter & Gamble (PG). Kimberly-Clark said the move was necessary to offset higher prices for fiber and higher energy costs.
 
TRADERS: MONDAY IS A NEW MARKET MARKER DAY then countdown until Friday’s numbers.
INVESTORS: Later this week and next are times for a short-term buy. Don’t forget: any tax rally is also a good time to slowly exit intermediate term positions by H2 April 2004.

KEYDATES:    MARCH 29, APRIL 2
DJIA:               10200 PIVOT S1 10000 S2 9800 S3 9500 R1 10400 R2 10650 R3 10800
NASDAQ:       1880 Support, 2120 Resistance
GOLD:             PIVOTS 417 and XAU 102

MARKET SENTIMENT: MONITOR MONDAY MARCH 29.
DON’T BUY AND HOLD: REMAIN LIQUID WITH 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. In Q1 2004, property prices in Australia, the US, the UK, Ireland, the Netherlands and Spain are at very high levels. They have risen exorbitantly in relation to average income. It could be said [The Economist] that house prices are over-valued by up to 33% as low interest rates have allowed more and more people to borrow large amounts to buy a home or investment property. The Bank for International Settlements (BIS) is concerned about this situation. Its researchers have found that historically, the bigger the boom in house prices, the bigger the bust. Central bankers are as likely to be concerned about this as financial astrologers. Saturn in Cancer (home) suggests it is more than past time to begin (accelerate) reducing exposure to the still booming housing sector. Coming up, Home Depot [HD] and Beazer Homes [BZH] are both good potential short or hedge/short candidates circa their 52 week highs.

3. Earnings Disappointment: Sanyo Electric (SANYY), the Japanese consumer electronics firm, slashed its full-year net profit estimate by 88%, hurt by poor sales of home appliances and a 15 billion yen ($140 million) investment loss.  The company now expects a net profit of three billion yen for the business year ending on March 31, down from an earlier estimate of 25.5 billion yen.  A consensus of forecasts by 21 analysts polled by Reuters Research had predicted a net profit this year of 26.25 billion yen.  We didn’t.  While Japan is perhaps our strongest 2004 country play, we intend to sell the last of our intermediate term exposure this month as close to our Nikkei 12,000 target as possible as most of our 2004 price targets have been met or exceeded.
WSNW subscribers may wish to review our Japan 2004 premium post for more.

4. Five years after Austria banned talking on a cell phone while driving, a survey by the Austrian auto club Arboe shows more than half of Austrian drivers still do it, and in fact this dangerous behavior has increased over the last four years from 42% to 55%, Die Presse reported. "Unfortunately, carelessness has increased," said Arboe transportation expert Guenther Schweizer. Meanwhile the Vienna ATX has appreciated over 50% during the last year.  We see little reason to freshly buy there outside of delicious personal expenditures such as chocolate balls. The rest of Eastern Europe is where the real action is now. While I could research Vontobel Eastern European Equity Fund [VEEEX] holdings for investing ideas, I don’t speak any of the languages, so I will be watching this party from afar.

5. “Interest rates have stayed low and companies will meet expectations.'' [The economy is] stronger than people think, and the markets are in a position to continue to rally.''
Mark Roach, comanager, Vaughan, Nelson, Scarborough & McCullough
HW: I agree 75% with you. However, I don’t believe the economy is stronger than I think.
 
"Inflation could be a problem sooner than anticipated and that means the Fed may have to raise rates sooner than what the market is suggesting."
Peter Cardillo, chief market analyst, SW Bach.
HW: Inflation is only a problem if you want to eat, drive, live in a home, have insurance or see a doctor.  If other countries lower their interest rates, then the Fed might wait.
 
"We think the correction has probably done its dastardly deed and the primary trend remains up," Goldman said. "The outlook for the economy remains positive, the forecasts for corporate earnings are up. ... I would advise people who are on the sidelines to do some selective buying."
Alfred E. Goldman, chief market strategist, A.G. Edwards
HW: Yes, short term. But intermediate term it’s likely to stay very choppy with modest full year returns.

6. The tug of inflation
“Every previous major bear market has been accompanied by a bear market in home prices. When home prices do start down, they will fall remarkably far."
John Templeton, founder of the Templeton Funds
HW: I agree with you.  I don’t see why it should be different this time.

Jan 01 Gold and Hyperinflation Y T Wong 321gold
“This article is written to pinpoint the timing of the imminent hyperinflation.”
HW: I don’t see hyperinflation but do enjoy reading astrologically influenced economic views.

Inflation Is Only as Tame as Your Price Index:
“The inflation risk for investors is not so much that core measures of inflation will move higher but that these measures are losing credibility in financial markets…Prices of autos and apparel have been falling for years, thanks to the strong dollar and China,'' …Now those trends are working in the other direction.''
HW: Yes but statistics can be even further massaged to show low inflation. However, if one day the public wakes up, then watch out!

7. READER: FYI - You're not alone. “The industrials made a massive top and have recently broken deep below their year-long uptrend line ... Moreover, the market has fallen below the 200-day weighted moving average -- for the first time since the rally began in earnest over one year ago.”
HW: Yes, although within two weeks, it will be moving up.  Then again, within three weeks, it will be declining again.

READER: I keep hearing a lot about the upcoming 4/1 date when nobody can short a stock anymore unless they actually own the stock.   Do you think that all the penny stocks will go up that date as everyone try to cover their shorts?
HW: Theoretically (legally) shorters won’t be able to short unless they can borrow the stock. They don’t have to own it. It would be nice, but I don’t believe all penny stocks will go up then. Some may, but it may not be an accident that this rule is set to go into effect on April Fool’s day.

8. HERE WE TALK ABOUT AFUND CLIENTS
Gallery (GARFQ or GYR-TSX) will be doing a major upgrade of its website next week.  April is a VERY auspicious time for the Company.  While astrology is a necessary, but not sufficient condition for success, it will be very interesting to watch the exploration results this month. If you like the story, this may be THE best time to buy its stock.  Be sure to understand the risks as well as the rewards of small cap gold exploration companies before you do.

READER: If the company cannot produce any material orders soon or certainly this year, I would expect the stock price to completely collapse (some would say it already has). Let's be realistic - 2004 is a make or break year for IHI.  If it cannot produce this year, we can all kiss our IHI investment good-bye.
HW: With most small cap companies that would be true. Certainly if they are not in production by late Fall 2004, the stock will be toast, but it may or may not be burnt as you suggest, given its recurring Natal strength as well as its president’s stubborn determination.  This small cap continues to act more like an attractively priced long term option.

READER: Should we all sell now to get out what we can? Looks pretty bad at this point that the company will even go forward with production. It has been some time now since we have heard anything positive to get this stock moving… I don't see them insiders buying now or is it the insiders selling now? How much longer are they going to string us along? Looks like a lot are tired of being strung out this long with promise after promise not being met. If there is no hope let me know so if can sell and save my house.    
HW: No I don’t believe insiders are selling. A couple of investors out of 4,000 lost hope. Its stock is selling WELL below book. It is a question of whether you believe Roger will pull it through.  I continue to believe he will.  As for fresh buying, it comes whenever investors feel it is a bargain for an intermediate/long term hold.  It seems very close to that to me.  What do you mean sell and save your house? You don’t have your entire life savings in it do you?  You should just own enough IHI stock so you can afford to buy a new IHI home! :)
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Author: INVESTING BY THE STARS, THE STUDY OF ASTROLOGY,TRADING BY THE STARS (01)
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