Wall Street Next Week JULY 5, 2004

WALL STREET, NEXT WEEK
Financial Astrology for successful investors and traders"

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WALL STREET, NEXT WEEK: JULY 5, 2004
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

A DULL SUMMER MARKET AHEAD?
2003 CLOSE      DJIA 10453, SPX 1111 & NASDAQ 2003
July 2 CLOSE    DJIA 10282, SPX 1125 & NASDAQ 2006

To date, there has been little investing loss in having the high cash positions we recommend.
Ahead of next week’s earnings season, there is little fresh reason to buy, while the investing risk remains far above normal until July 12th.

TRADERS:         Gold, Oil and US Dollar Watch- Markets remain on Orange alert this week.
INVESTORS:     SHORT TERM [< H2 JULY 2004], the probability favors the bears.

KEYDATES:       July 12
DJIA:                  10137 Support -10443 Resistance
NASDAQ:           2000 PIVOT
GOLD:                $401 PIVOT

MARKET SENTIMENT IS NOW FEARFUL AND BEARISH UNTIL JULY 12TH.
DON’T BUY AND HOLD: BE LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
12/31/2003 EOD:    SPX   1111 DJIA 10453 NASDAQ 2003.
FAIR VALUE:        DJIA <9800,    NASDAQ <1800, GOLD > 400
While the internal Stock Market astrology, as in 2003, is mixed, the external risk potential remains high.

2. Israeli stocks trading on the Tel Aviv Stock Exchange hit the highest level in the country's 56 year history last week, with the Tel Aviv 100 Index (TA-100) setting a new record by reaching 600. "Many people are surprised that Israeli companies have been thriving in light of ongoing terrorism," commented Cliff Goldstein, President of the AMIDEX35 Israel Mutual Fund (NASDAQ:AMDEX). "Israelis have so much talent, perseverance, and creativity that they have succeeded even with one hand tied behind their backs by violent neighbors." Goldstein added.
While Israel has more engineers and scientists per capita than any other nation, we are not currently bullish on the tech sector. So last week when the TA -100 reached its record high, we downgraded it to global market perform.
WSNW subscribers may wish to read our premium subscriber post S: Israel 2004 for more.

While there are few stocks I wish to own at current pricing, ATT (T) is one exception that I consider a value buy under $15.25. It sports a low 7 P/e, and offers a dividend yield above 6%. We consider it a trading buy to $17.50 and reasonable aggressive long term investment until $18.50 OB.
WSNW subscribers should periodically review our premium S: 2004 STOCK WATCH LIST post.

3. Comdex show canceled
“Believe it or not, organizers of the once-huge tech trade show have canceled it for this year. Companies' budgets are ``better suited'' to hosting an event in 2005… `Though we believe Comdex would've been profitable, we decided to postpone it because it didn't benefit the IT industry,'' Eric Faurot, vice president and general manager for Comdex, said. Comdex 2004, originally scheduled for Nov. 14 in Las Vegas, was put off until Nov. 13 to Nov. 17, 2005, MediaLive said.
I can’t think of a more telling or potentially ominous sign for Nasdaq. Given fairly strong overhead resistance at 2050, we expect to see another attempt to break down below 1966 support this Summer. Accordingly we recommend investing distribution and trading sells (with tight trailing stops) for the QQQ and the majority of its components.

4. “Don't be surprised if the market looks for reasons to rally but doesn't find them."
Weston Boone, vice president of listed trading, Legg Mason Wood Walker
HW: I won’t be.

"We believe that inflation has returned. And the cause of it has been an over expansive monetary policy for almost 10 years."
Alan W. Kral, portfolio manager, Trevor Stewart Burton & Jacobsen
HW: In reality, inflation has been with us for some time, just being masked by inaccurate measurements. However, it is also bifocal, and will continue to be so.

The anticipation of this rate hike has been far worse than the reality of it. I think it's going to be a positive for the market to get past today's announcement so we can start looking at earnings pre-announcements and the underlying economic data."
Brian Bush, director of equity research, Stephens Inc.
HW: True, although the August meeting rate hike could be more painful.

5. Inflation a top threat to economy

As Greenspan Chases Inflation, Critics Shout, 'Faster!'
“Inflation rates are far ahead of Alan Greenspan's federal funds rate, which he raised to 1.25 percent. Can he catch-up?”

Warning issued over housing bubble in U.S.
Raises threat of deflation
“The U.S. housing market has become a bubble which will burst in mid-2005, forcing the U.S. Federal Reserve to cut interest rates and exposing the economy to the threat of deflation once again, an economist warned yesterday. ‘Prices are 10% to 20% too high and will take roughly five years to fall,’ Ian Morris, chief U.S. economist at HSBC Securities USA said in a report entitled "The U.S. Housing Bubble -- The Case for a Home-Brewed Hangover."

6. READER: You suggest to trade buy school stocks after weakness. How about CECO ? Is it a good time?
HW: I don’t really have an opinion, except CECO is clearly near long term technical support at 40. However, I don’t like the current news on it, and would prefer to see to how well it holds support first, given the risk/reward of the current SEC investigation. Time wise I would wait for either July 12, or the beginning of September, depending on overall market conditions.

READER: Latest newsletter refers to orange alert. What is this?
HW: It is a negatively biased high state of Yellow Alert, (Orange being the resulting color of Red (severe) and Yellow (elevated).

7. HERE WE TALK ABOUT AFUND CLIENT

READER: What do you know about this development? http://www.ihiskyline.com.
HW: This is the high rise project that IHI will be using to showcase its technology.

READER: Do you have any news regarding your IHI trip? Is that correct that the company can not produce automatic panels until legal dispute is resolved next January.
HW: I will be updating on my IHI post on website update shortly. Your second question should be addressed in IHI’s next news release, as there seems to be have been some misunderstandings at the AGM of this issue.

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