WALL STREET, NEXT WEEK
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WALL STREET, NEXT WEEK: SEPTEMBER 13, 2004
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

1 ALAN AND THE UPCOMING FOMC
$40 Oil is good, because it is not $50; a $422 billion US deficit in 2004 is good because it is not $450 billion. Yes, the former is below its recent record highs, while the later is below earlier estimates but since when is bad news good news? We are, of course, familiar with the behavioral finance concept of anchoring, but give me a break.  Of the greatest concern is whether Alan is beginning to lose his Magic Touch. Last week comments from Fed Chairman Alan Greenspan did little to inspire investors. If this continues, markets will surely trend down. Of course, the 64K question is whether this happens before or after November 2. Despite increasingly weaker fundamentals news appearing almost daily, a lot of the smart money is still betting afterwards. Why? Alan still has the power to lower rates and effect direct intervention. Then again, it is almost time for the annual October scare, which of course COULD also happen this month or November.

INVESTING FOCUS: Will Wednesday’s OPEC meeting mark a short term top or bottom in Oil prices? Will most corporate earnings outlooks next week be more profit warnings because of rising energy and labor costs? Consider selling or placing stop losses on stocks you are unsure of holding by October.

HYDE PARK SOAPBOX: US BONDS AND THE NOVEMBER ELECTION
Until Friday, most analysts believed the Federal Reserve would raise rates by another 0.25 at the Federal Open market Committee policy-setting meeting on Sept. 21. We continue to respectfully disagree. Many analysts say Bush would be hurt if the Fed does not raise rates because Kerry could argue it was growing economic weakness that stayed the Fed's hand.  Meanwhile, most talking heads are saying Wall Street sees President Bush as more market-friendly than his rival. So lots of hot money will be trading short term every new election poll.

Foreigners now own a record 50% of privately held U.S. government debt according to the US Treasury Department vs. 20% of total U.S. debt 11 years ago. Will private investor interest in U.S. equities replace the expected fall in buying of U.S. Treasuries? For how long will the big 3 Asian central banks of China, Korea and Japan continue to support the US Dollar and at what political and economic cost to  US interests? Is this good for our children and grandchildren? Sadly, I think not.

TRADERS:  Usual Option Expiration Games.
INVESTORS: Sell stocks you don’t want to hold until October. We are ready to buy ONLY special situation stocks, e.g. Stock of the Month Club picks.

KEYDATES:        September 14, 16
DJIA:                   10,300 PIVOT
NASDAQ:          1850 Support?  1900-1920 Resistance
XOI:                    Second Distribution

SIDEWAYS Market Marker Sentiment: Initial Worry, then Rally, ending Flat.
DON’T BUY AND HOLD: BE LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
12/31/2003 EOD:    DJIA 10453   NASDAQ 2003 SPX 1111.
FAIR VALUE:        DJIA  <9600, NASDAQ  <1750, GOLD > 405
DIJA:                      0 FV; 0 UV; Only 3 offer 4%+ Dividends.
While the internal Stock Market astrology, as in 2003, is mixed, the external risk potential is high.

2.  We are very pleased our August Stock of the Month Club pick Yak (YAKC) reached and exceeded both its investing and trading targets in under month! Stay tuned for our September pick!

Disney Chief Eisner to Step Down in September 2006 at End of His Contract
Disney chief executive Michael Eisner will leave in 2006 when his contract expires, ending his two-decade relationship. Despite this above long term fundamental “good” news, Disney (DIS) stock remains overvalued. Given that Astrologically Saturn moves into Leo (Entertainment) in H2 2005, we continue to recommend distribution or avoidance, except for short term trading opportunities. WSNW subscribers may wish to review our premium post S: DJIA for more.
Before October, we will be updating most premium silver posts.

3. Home Depot to open 1st Manhattan store
“Home Depot's first Manhattan store, which opens to the public Friday, will have a doorman for help in hailing cabs and a concierge to offer information and schedule appointments with designers.” While we expect this store to be profitable, upscaling Home Depot is like taking a fish out of water. Given Saturn remains in Cancer (home), which is notorious for often arriving late, the best news for HD is probably past. At best, I believe it can only market perform the Dow over the next 6-9 months, hence we continue to recommend “Avoid.”

4. "The real key is going to be the earnings picture. We're starting to see very early re-announcements to the negative here, and in some cases it's a matter of just tweaking the revenue number and that brings the stock down sharply."
Joseph Battipaglia, chief investment officer, Ryan, Beck
HW: Alcoa (AA) was one good example of this last week.

"Furthermore, the U.S. economy is not slowing but plateauing at a very comfortable level. The market has the potential to rise a bit, especially in a few sectors that have been bombed out, such as insurance and technology,"
Thierry Lacraz, strategist, Pictet & Cie
HW: The potential rise is far smaller than the potential fall.

"We're at the point beyond reasonable valuations [of Reits]."
Jonathan Litt, analyst Smith Barney
HW: I have thought so for some time. After a more significant correction before H2 2005, we will review this sector again for possible buying.

5. U.S. Companies Speed Up Buyback Pace
“With the stock market languishing, U.S. companies are shoring up their shares by buying them back at nearly double the pace they did last year.”

Investing: Ready to Bet on Alternative Energy? Well, Think Again

Freaky Future: 'R' Word in Economic Forecast
UCLA economists see prelude to recession

6. READER: Just so you know I am getting bullish dollar signals -somewhat contrary to what you are looking at
HW: I had bullish signals from the 9/2 to about 9/8-10 and then again after the 21, especially end of month. However, I believe we are likely to be going down again starting circa 9/9-10.
Note: The US dollar fell sharply 9/10! 

7. HERE WE TALK ABOUT AFUND CLIENTS
We continue to recommend accumulation on weakness mode for AFUND clients IHITF and HESG.
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