WALL STREET, NEXT WEEK
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WALL STREET, NEXT WEEK: MAY 23, 2005
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

THE 2005/2006 STOCK MARKETS
While some optimists believe the worst may be already over, I don’t. It is true that earnings for companies in the Standard & Poor's 500 index have risen. However the outlook for the months ahead is in question, as many companies have issued warnings about future growth prospects. What's more, there are worries over high energy prices, growing inflationary pressures and rising interest rates - and the potential drag all those factors could have on the economy. The LEI (Leading Economic Indicators) declined in April, as it had in March, February and January. The more markets are recognized to be range based, the more investors will slowly have to adjust their expectations.
 
Will markets decline in the form of a single or series of downturns, failed rally attempts or even crashes? [We note the possibilities of a summer bargain hunting rally as well as a year end one.] Even so, each market rise will be accompanied by increased risk vs. declining reward attributes. If a crash in 2006, we have identified close to 40 potential looming crises (Pluto events).  A partial but not complete list of worries includes: China melt down, Yuan reevaluation after effects or Taiwan action, global biomedical epidemics, e.g. Avian Flu or bioterrorism outbreaks, trade wars (China, EU), major hedge fund bankruptcies, a PBGC (Pension Benefit Guaranty Corp.) shortfall crisis, major junk bond or emerging market bond default, a bank derivative blowup, Fannie Mae issues plus possible assorted natural disasters. This list does not include problems arising from higher interest in consumer credit, energy costs, and costs and consequences of the ongoing conflict in Iraq. The list goes on and on. 

Alan Greenspan and his soothing reassurances will be gone in 2006. Whether January 31 when his term expires, or later until May 11 to become the longest-serving Fed chairman ever, he won’t be of much help post the May 17, 2006 New York Stock Exchange Solar Return. 2006 is likely to have more wars, rather than peace, whether in North Korea, Iran, India/Pakistan, etc.  The most ominous event we see intermediate term is the US dollar decline ahead and “America for Sale”, hopefully not a fire sale! 

As we approach 2006, be prepared for increased risk and market drops.  Decide what will be the maximum loss you are willing to take. The trend will be towards increased risk aversion. CASH WILL BE KING, with conservative investors buying the bonds of blue chip companies, selected REITs, shorter term fixed income, etc. Remember, the path of capital conservation entails a lower return: it is the conservative offset for the risk you are not wiling to assume.

WARNING: DANGER AHEAD
Foreign investors sell US assets
Less interest in US shares by foreign investors is one of the greatest dangers facing the US stock markets in H2 2005 and 2006. Last month international investments in U.S. securities dropped to $45.7-billion from $84.1-billion in February.  This is well below the $65-billion+ needed to cover the U.S. current account deficit.


INVESTING ALERT: AN INTERMEDIATE TOP IS IMMIMENT
While a third MMD or Memorial Day rally is possible, it is not likely to last very long nor move upwards very far, as it is not as strongly astrologically driven as were the first two 2005 MMD rallies. Will it be largely over by the end of May, [my current bet], the first half of June or the second half? From an INVESTING perspective, it really doesn’t matter that much!  Even many bullish analysts believe that until the Fed signals it is at or near the end of interest rate increases, markets will not break out far above of their recent trading ranges. The worse R/R, i.e. greatest risk and lowest reward is with the Nasdaq market now. Shall we project less than 1900 by Summer Why not!

TRADERS:  We are preparing for either a Potential WSNW May 27 Buy and/or May 31 Sell.

INVESTORS: We continue to recommend Distribute/Sell into strength: Looking ahead intermediate term, we are likely to see a retest of the September 2004 NASDAQ low at 1,879 and longer term, a test of the Aug. 12 low of 1,752.
 

HYDE PARK SOAPBOX: CREDIT CARD USURY
Default rates of 29.49% are now industry standard. Sample contracts read: “… the APR’s for this offer are not guaranteed; APR’s may change to higher APR’s, fixed APR’s may change to variable APR’s, or variable APRs may change to fixed APRs.  We reserve the right to change the terms (including the APR’s) for any reason, in addition to APR increases that may occur for failure to comply with the terms of your account.
HW: BOLD emphasis mine. Additional commentary should be unnecessary.

Financial Astrology 101: Neptune SR May 19, 2005
US market rally on China talk puzzles strategists
Price Report Eases Fears on Inflation

KEYDATES:    May 23, 25, 27
DJIA:               10500 PIVOT
SPX:                1165 SUPPORT 1200 RESISTANCE   
NASDAQ:       2050 PIVOT
US$:                 86 PIVOT

Market Marker Sentiment: First Bullish, then Bearish.
DON’T BUY AND HOLD: BE LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
2003 CLOSE:           DJIA 10453, SPX 1111 & NASDAQ 2003
DIJA:         2 ~ FV 0 UV; 5 offer 4%+ Dividends.
While the internal Stock Market astrology is mixed, the external risk potential is high. Looking ahead, my question is whether 2006 will show slow growth less than 2%, no growth, or turn into a classical recession. America will be on sale then. Hence we advise PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK.

2. Thursday I had the pleasure of attending the Enerplus Resources Fund (ERF) FAMM presentation.  They are North America’s oldest and largest conventional oil and natural gas income fund. Currently they offer over a 10% yield. While Oil prices may or may not decline, it is definitely worth considering as one source of taxable income, as.  ERF US tax treatment is favorable and subject to the 15% qualifying rate.

Accordingly, I have added ERF to the AFUND Dividend and Income 12.  Given that a large part of the Canadian market is devoted to income trusts, we may belatedly also add it to our AFUND Canadian 20 portfolio as a commodity hedge/income play.

WSNW Subscribers may wish to review our updated premium S: Dividend & Income post.

3. Barclays returns to Africa
Britain’s Barclays is set for a historic return to South Africa with a $5.56-billion deal. We hold no view of the JSE and we are not bullish on the British economy these days. Like many analysts, we are also skeptical of both financial and technology sector leadership this summer. As for gold, it will be yummy.  Gold Stock Resurrection is coming. Reports of gold's demise may be premature. The fundamental case is growing, and the technicals are compelling, too. Should one then buy AngloGold Ashanti (AU) or any other South African gold mining company?  Only if you already own some of our favorite North American mining stocks first.

WSNW Subcribers should carefully view our premium S: Gold post in June

4. "Many managers feel that bonds, and high-yield bonds in particular, are expensive and have reduced exposure accordingly. As regards equities, they fear that many high-yielding UK shares are vulnerable to a slowdown in consumer spending.
Alison Cratchley, fund analyst, S&P
HW: As in the right side of the pond, so shall it be on the western side as well.

There just isn't enough systemic inflation to make a case that we're going to explode on the upside.  In the next six months we're in the best of all worlds.”
Jerry Castellini, comanager, CastleArk Management.
HW: I presume you are wearing Dr. Pangloss sunglasses, and not what you have been smoking that makes you believe “we’re in the best of all worlds.”

"The buyer's strike might be over. Investors have been very pessimistic lately. There have been a lot of concerns about inflation, economic sluggishness and earnings growth decelerating. I think we're starting to move past that."
Jeff Kleintop, chief investment strategist for PNC Financial Services Group
HW: Perhaps it was just our second MMD forecasted rally, accompanied by inflation data interpretation, courtesy of Neptune SR the next day.

5. BIG PICTURE: MOST IMPORTANT
“Throughout history, paper currencies have come and gone but gold is real money and it’s maintained its value over the centuries. It has a 5000 year track record, which no other investment can claim. If nothing else, think of gold as an insurance policy. During these volatile and uncertain times, we don’t believe you’ll regret it.”

Greenspan's Catch 22

Hold back on buybacks
"Big companies are buying back stock. Before you buy too, do some digging."

6. READER: Would you recommend a book or brochure that would list the major Canadian stocks?
HW: Visit the TSE website TSX Indices.

READER: I saw your "2006 is coming" and read that you are enthusiastic buyers for gold and gold stocks on May/June. Does this include silver and silver stocks as well?
HW: I am not personally such a fan of silver, given gold's currency as well as inflation measuring properties.  However, it is likely they could well move in Tandem.  I would recommend looking at Western Silver (WTZ), however, do realize none of the silver companies currently make money.

READER: An option on NEM CALL 50 USD NEMIJ has now a price on 5-10 cent. NEM have a price on about 35 USD. When gold was about 455 USD for half a year ago NEM was about 50.If gold goes to 490 NEM should reach about 65. Conclusion: That could give 200 double or so on a 5-cent CALL on NEM? Maybe option on gold bullion is better?
HW: That is a bit far out and speculative- but possible to lose a lot of money as well as make it. So only make a small bet if that is your bet. Option on gold bullion is better, I think.  However such far out of the money plays are HIGHLY risky.

7. HERE WE TALK ABOUT AFUND CLIENTS
SFNM: How long before .50 and $1? Watch the tape.

TNXTE: Microcaps, Sarbanes-Oxley & The 'E" Challenge Bottom Line: from these prices, very little to lose and a triple plus possible/probable.

IHITF continues to hold support, but it does not look very likely that it will reach our initially projected double by the end of May. Instead, it seems we will be able to pick up some more bargain basement priced stock ahead of the June 14th AGM.
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PAST WALL STREET NEXT WEEK REPORTS
              FRIDAY 11 am listen to our Internet radio program TRADING BY THE  STARS.
(c) 2005 All rights  reserved.  The Astrologers Fund  "Always a Stellar Performance"
wsnw@Afund.com 212/949-7211 Fax 212/949-7274 370 Lexington Avenue, Suite 416 New York, N.Y. 10017-6503
Author: INVESTING BY THE STARS, THE STUDY OF ASTROLOGY,TRADING BY THE STARS (01)
DISCLAIMER: This report is for informational purposes only. PAST RESULTS ARE NOT NECESSARILY INDICATIVE  OF  FUTURE FORECASTING ACCURACY OR PROFITABLE  TRADING  RESULTS.
INVESTORS ARE REMINDED TO PERFORM THEIR OWN DUE DILIGENCE BEFORE MAKING ANY INVESTMENT DECISION. ALWAYS INDEPENDENTLY INVESTIGATE AND FULLY UNDERSTAND ALL RISK BEFORE MAKING ANY INVESTMENT.
 The Astrologers Fund Inc. Accepts No Liability Whatsoever   For Any Loss Arising  From Any Use  Of   Its Report Or It's Contents. The Astrologers Fund Inc. Or Its Clients Usually  Holds Positions In The Stocks and/or Market Instruments Mentioned And May Buy Or Sell At  Any Time Without Notice depending on market conditions and personal  financial conditions.   This Information is  In No Way A Representation To Buy Or Sell Securities,  Bonds,  Options Or  Futures. This information  is not intended to be used as the sole basis of  any investment decisions,  nor  should it be construed as advice designed to meet the investment needs of  any particular  investor.
ALWAYS CHECK WITH YOUR LICENSED  FINANCIAL PLANNER OR  BROKER  BEFORE BUYING OR SELLING ON THE RECOMMENDATIONS  OF  THE ASTROLOGERS FUND  Inc.
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Please read our Disclaimer for more information and note that my clients and I are shareholders and may act in the open market.
In January 2005, TNXT became a client of Henry Weingarten as well as a client of a related entity THE SEASONED SPECULATOR. The initial contract was for 3 months for $10,500 with Target Publishing, Inc for a variety of investor and brokerage awareness services. Later 50,000 shares of TNXT were added to the contract for additional consulting services.
SFNM became a client of Henry Weingarten and Susan Hahn & Associates on March 17, 2005 and will be paying $3500 monthly plus 100,000 restricted shares to be issued over a period of one year.       
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