WALL STREET, NEXT WEEK
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WALL STREET, NEXT WEEK: DECEMBER 6, 2004
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

IS THE CHRISTMAS RALLY OVER? OR IS PART II COMING THE WEEK AFTER NEXT?
We have tested the upper part of the Nasdaq and Dow trading bands.  Assuming Monday is down and Friday modestly up, we will remain within its band this week.  A rally could begin again just before the Winter solstice, but could end abruptly. It is probable that Q1 2005 will be the year’s top and possibly even early February or before

Regardless of the date of Santa’s next visit, there should be plenty of short term opportunities to buy and sell thanks to seasonal tax selling and portfolio rebalancing.  Four sectors of particular and obvious intermediate term interest in 2005 are: Alternate Energy, Biotechnology, Gold and Nanotechnology. Our December Stock of the Month pick is likely to be from one of these sectors.

BEST QUOTE OF THE MONTH
Fed Chairman Alan Greenspan [Nov. 19] at a conference in Europe that investors not hedged for higher interest rates are “`desirous of losing money.'' 
HW: Could it be the same investors who are now buying Nasdaq to the sky?

TRADERS:          Monday is the second half of the newt market marker sentiment.
INVESTORS:     We are now ready to buy whenever bargain tax-selling December dumps come.

KEYDATES:   DECEMBER 6, 10
DJIA:              10,600 PIVOT
NASDAQ:      2150 PIVOT
GOLD:            450 PIVOT

New Market Marker Sentiment starts Bullish, and then is followed by?  To be discovered Monday MOC.
DON’T BUY AND HOLD: BE LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
12/31/2003 EOD:     DJIA 10453   NASDAQ 2003 SPX 1111.
October Lows:          DJIA   9660,  SPX  1090 & NASDAQ  1899
DIJA:                        3 ~ FV 0 UV; 4 offer 4%+ Dividends.
While the internal Stock Market astrology, as in 2003, is mixed, the external risk potential is high.

2. Two different computer stories of last week suggested a needed modification to both stocks ratings. First, Intel was upgraded from under perform to market perform on somewhat decent earning news.  Second, the news that our perennial favorite computer stock IBM is now thinking of selling out: Contemplating a PC Market Without I.B.M. is not a positive from a long term strategic perspective.  We believe this is poor short term thinking, and along with its price being above 96, suggests a downgrade from out perform to market perform.  It is sad to view another American legend slowly moving in the wrong direction, again……

COMING NEXT WEEK: THE 2005 AFUND MICRCOCAP 5 SELECTIONS.

3. Last week, the news on Playboy (PLA) was Hot:  Hot, Sexy Wireless. Bored cell phone users can now play strip poker and other racy games, view randy clips as well as enjoy more virtual ribaldry through their mobile phone. Friday came news that Playboy Plans to Open Club in Shanghai. This moved its stock up just a little over 2%. Given that China is super hot these days, that was not a very positive market reaction. While I personally have only limited “academic” interest in following the assorted antics of Playboy bunnies, we still keep PLA on our “watch” list. We don’t intend to recommend buying until its current lack of profitability better partakes of the advertising mantra that sex sells.

4. "But looking beyond the upcoming holidays, the continuing erosion in expectations suggests consumers do not feel the economy is likely to gain major momentum in early 2005."
Lynn Franco, director, The Conference Board's Consumer Research Center
HW: Neither will they in mid or late 2005 either!  Owners of retail stocks beware!

"I think the dollar is going lower. The problem is that you have the central banks fighting very hard against the market."
David A. Wyss, chief economist, Standard & Poor's
HW: That plus the repatriation of US companies over sea’s profits should act as an intermediate term delaying action only.

"Now that the Fed's tightening is expected to carry well into first quarter, currency markets could prove rewarding to the dollar ahead of the December meeting. We still stand by our call expecting the dollar to reach a short-term bottom at $1.36 by year-end."
Ashraf Laidi, chief currency analyst, MG Financial Group
HW: We agree with your trade, but not your price target.

5. The Fantastic Fives
“The market has typically done extremely well in years ending in 5. Will the trend continue in '05?”

Dollar's Fall Tests Nerve of Asia's Central Bankers

Winning the Quest for Yield
“Stocks that pay meaningful dividends are still something of an anachronism. Even now that tax rates on stock dividends are lower, the average company in Morningstar's U.S. Market Index still pays out a paltry 1.6% yield.”

6. READER: First and foremost Happy Holidays and best wishes for a New Year, although I don't know if you start in Jan Or Mar. I'm very confused because according to my work we should be at a major low in the market. I really don't expect the uptrend to change until Mercury goes direct later this month and it is debatable if that will be a final top. How high is this time? There is no doubt in my mind that we are in a bubble similar to 2000 but when will it pop? I believe jup squares sat next year, could that top the market? Spring solstice? I would appreciate your thoughts.
HW: The mundane presidential cycle pushed up closer to a major top than would otherwise be the case. I think by the Spring solstice or short thereafter, given April seasonality, should be more than enough time to reality to sink in further into the minds of the average investor.

READER: In your weekly update you use very often the phrase: The eternal risk is horrific! The astrological signs is mixed and the market moves mostly sideways. So what do you have in mind? Some sort of world disaster or tragedy?
HW: That is possible, but I have more in mind the economic disconnect between the US economy and global financial markets and the meltdown challenges of China.

READER: I have been trying today to access the above and cannot? is there a problem with your program. Please advise.
HW: Our afund site is up, but your WSNW subscription expired.  You would need to renew in order to access the premium (nonpublic channels.)  Why not do so today?

7. HERE WE TALK ABOUT AFUND CLIENTS
Both HESG and IHITF are now within are December 2004 buying price targets.

READER: I bought HESG on 0.69.According to my technical analysis the price object is 0.8-0.9 in some days /a week or so. Another place you suggest 0.9. Such an analysis together on one place would be very nice. That will say you had to change the target with the development of the stock. But maybe you leave that to us? The same when you finally should sell the equity? And astrology?
HW: TRADING IS DIFFERENT FROM INVESTING. ONCE .90, I have to study what the news, if any there is at the time.  Note:  .80 is current intermediate term support and $1, 1.10 and 1.20 P1-P3 resistance respectively.

READER: In your latest "Wall Street, Next Week" issue, you have the following to say about IHI:
<<< We are hopeful, but will have to see what their December press release provides. >>>
This response immediately reminds me of two old Wall Street maxims, "Climbing a wall of worry" and "riding down the slope of hope".  Well it is obvious which one applies here.  IHI is officially toast IMHO.  I have no idea what an 8-cent bid indicates at this point.  I am just glad (or perhaps just lucky) that that I did not ride IHI down this latest "slope of hope". I wish you and the remaining IHI shareholders the best of luck.
HW: Well once again we were buyers at the bottom, in this case .09. Even with the extremely slow company progress, the stock is currently too cheap. While we were expecting the low next week (perhaps it will be), it was and will be our betting view ahead of January.

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Author: INVESTING BY THE STARS, THE STUDY OF ASTROLOGY,TRADING BY THE STARS (01)
May 13-15, 2005 Eleventh Astrology & Stock MarketConference   NYC
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