WALL STREET, NEXT WEEK
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WALL STREET, NEXT WEEK: JANUARY 24
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

THE BULL CASE VS. HOW FAR IS DOWN?
In 2005 market participants are more sharply divided than usual. The December leading economic indicators are seemingly pointing to sustained and gradual growth. Yet, the University of Michigan reported that consumer confidence dropped for the first time in three months in early January. Personally, I find it very hard to see the Bull’s case any more than I could see Iraq having Weapons of Mass destruction.  At best, we have a mixed bag of quarterly earnings results, coupled with many future less-than-stellar outlooks.  After a potential sharp market drop later this week, we expect a fairly choppy February before fresh March tax season money inflows.  This continues to leave stock investing far more risky than usual.  One day drops of 18 ala EBAY last week will not be rare occurrences going forward, given extremely rich US stock evaluations. What is there to do? Caution, hedging and shorter term positional trades seem to be the order of the day.

BUSH’S SECOND TERM
2 ½ minutes shy of Noon, Bush was reinaugurated.  The Sabian Symbol for the Moon (people), the 10th degree of Gemini, is most telling: “An Airplane performing a nose dive.”  A quick look ahead of this chart forecasts a tough 2006/2007.

TRADERS:         Pre-Iraq Election trading. TRADE GOLD FOR FRIDAY
INVESTORS:     We prefer to wait until February/March except for special situations and hedged long/short pairing.

KEYDATES:    JANUARY 25, 28
DJIA:               10,500 SUPPORT OR RESISTANCE?
NASDAQ:       S1 2020 S2 2000 S3 1985
GOLD:            425 PIVOT

Market Marker Sentiment: First Bullish, then Bearish.
DON’T BUY AND HOLD: BE LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
12/31/2003 EOD:            DJIA 10453   NASDAQ 2003 SPX 1111.
October 2004 Lows:        DJIA   9660,  NASDAQ 1899 SPX 1090
DIJA:                               2 ~ FV 0 UV; 5 offer 4%+ Dividends.
While the internal Stock Market astrology is mixed, the external risk potential is rather high.

2. We both expect the Dow to test and possibly break 10,000 as well as the US dollar to retest and possibly break .80 this Summer.  Thus investors should look both for US companies that would continue to benefit from a depreciating dollar as well as more international (non-US) companies.  Until more stocks are less overvalued by our measures, we are no rush to invest long term unless/until markets correct downwards. Also please note, as most European and Asian stocks in the DJ Global Titans 50 are primarily not concentrated in our 2005 favorite sectors, we previously reduced our holdings in our AFUND Global 12 to 10, and also reduced their portfolio weight from as high as 25% to 15% until H2 2005.
WSNW SUBSCRIBERS should visit our premium post S: AFUND GLOBAL 10 for more.

3. SNL SKIT SIGNALS $ REBOUND
“You know the dollar's decline may be coming to an end when the currency becomes the butt of humor on America's most renowned TV comedy show.”
We don’t agree that SNL has the same contrarian stock market correlation as a Time Magazine cover story. We see more dollar weakness dead ahead, especially after US interest rates reach at 2.75.  In any case, currency traders need to play a fast game of ping pong until the Summer when gold shines.

4. “Increase caution towards equities.  The peak may or may not be in the equity market and the topping out process could be extensive.  However, most if not all the cyclical gains have been realized.”
Francis A Scotland, editor Global Investment Strategy
HW: Post IRA season, most intermediate term investing sounds like a losing position.

"I don't think we are hearing anything here that is changing anyone's mind about what the Fed is going to do. The market thinks they are going to be continuing to raise rates in small steps at least until this summer."
James Glassman, senior economist, J.P. Morgan Chase
HW: They say the market is always right.

"It is a pretty good bet that we will see 25 basis-point rate hikes at each of those meetings in February, March and May."
Carl Tannenbaum, chief economist, ABN Amro
HW: I agree with two of those moves.  But can the stock market handle a 3% Fed rate? Not easily!

5. Fund manager focuses on worn stocks with potential

ADVICE ON YOUR GOLD STOCKS FOR 2005
 
Forbes: 4 economic prophets of doom

6. READER: re: Forbes: 4 economic prophets of doom Henry do you see any of this happening?
HW: Let’s Say 2006 will be a very tough year. Although I don’t agree with the specific forecasts, I do agree with some of the tone, but not the magnitude.

READER: Will you be getting back into ENZ or is it done?
HW: No.  I would begin to sep back in and do a first trading buy between 17.50 and 18. However, ahead of March, there is a lot of risk in the market in general. If it breaks 17.50, then as a trader I would rebuy 16.50 to 17, and also probably turn this into an intermediate term hold.

READER: Do you still believe GOOG will fall under 108?If so what about a PUT? March? Or January 2006?
HW: Yes, GOOG is very overpriced.   Best done when it is priced between 195 and 205. I like March 175 or 180 puts. 

7. HERE WE TALK ABOUT AFUND CLIENTS
We are pleased to see that HESG has good momentum and good astrology.  IHITF shorts seem to be running out of gas; if so, a 50%+ move could come shortly.  TNXT surprised me (I first reported this in the SeasonedSpeculator without having seen its horoscope).  However, it seems very undervalued and good things are likely to be happening in less a month (THIS IS astrological call!).

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May 13-15, 2005 Eleventh Astrology & Stock MarketConference   NYC
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