WALL STREET, NEXT WEEK
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WALL STREET, NEXT WEEK: JUNE 20, 2005
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER
 
1. JUNE MARKETS
2. UP STARS/DOWN STARS
3. GOLDEN THOUGHTS
4. ASTRONUT
5. QUOTES
6. ON THE WEB
7.  LETTERS
8. AFUND CLIENTS

1.  MORE “HANDWRITING ON THE WALL” NEWS

·    Net inflows of capital into U.S. assets in April increased to $47.4 billion, short of the amount needed to cover the U.S. monthly trade deficit, and well short of expectations of $60 billion.

·    US deficit widens to record high

·    Crude oil prices hit a new high above $58 a barrel on Friday. "This is a pivotal point we're at now," said oil analyst John Kilduff of Fimat USA in New York. "We're one hiccup away from $60."

Stocks traded mostly higher Friday as investors ignored a widening trade deficit and soaring oil prices and apparently focused instead on a jump in consumer confidence.
BOTTOM LINE: From an intermediate term perspective, markets will be peaking between here and the end of June to July 4-15.  We continue to recommend investors sell overvalued stocks and accumulate gold.

WSNW READERS NOTE:
Given my view of a major upcoming long term gold rally, we will now be commenting on the gold market weekly until gold reaches $800 or 2008, whichever comes first.
 
FACTOID: More Then One-Quarter of U.S. Consumers "Have No Spare Cash."
The U.S. is number one when it comes to the percentage of the population that claims to "have no spare cash," according to a new ACNielsen survey of consumers in 38 markets. More than one-quarter (28%) of U.S. respondents said once they have covered their essential living expenses they have no money left over.  By 2006, Americans will come to realize they are no longer as rich as they once were: The days of cheap energy (and food) are over!

TRADERS: We are happily short on WSNW Alert Sell 11A hopefully for some time. If not, we will try again, especially at the end of the month, when the US Dollar loses its last astrological support and Nasdaq nuts will soon be crying in their beer, assuming they are not heavily margined and can still afford it!  Given the strong cash positions of some rabid bulls, we intend to remain nimble traders. If need be, we will be stopped out and reshort again {and again} at appropriate astrological times and technical price points.

INVESTORS: Unless you like to stay at parties until the very end, you should be raising cash levels this month and next. My long term view is well known: focus on protecting against downside risk through most of the rest of 2005, and 2006 will be bleak. Finally, Make sure you own Summer Gold.

KEYDATES:        June 21-22
DJIA:                   10450 SUPPORT/10650 RESISTANCE?
SPX:                    1198 SUPPORT/1222 RESISTANCE?   
NASDAQ:           2000 SUPPORT/2100 RESISTANCE?
XAU:                   88 PIVOT  R1 95 R2 98 R3 100 R4 105 R5 113
US$:                    DISTRIBUTE/SELL

Market Marker Sentiment: First Bullish, then Bearish.
DON’T BUY AND HOLD: BE LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
2004 CLOSE:        DJIA 10784, SPX 1211 & NASDAQ 2175
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 less than 2% growth or be a classical recession?
PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK.
Before H2 2006, reduce indebtedness as much as possible, as quickly as possible. 

2. I had the pleasure last week of attending the 2005 Nareit REIT Marketplace Conference at the Waldorf Astoria. Some observations follow:

“Residential Real Estate Market has clearly gone nuts.”
“There is an unrealistic rate of return expectation on the part of Mom and Pop investors.”
“Current high valuations and interest rates are key to future REIT performance in 2005/2006.”
"REIT corporate notes (many investment grade) are attractive fixed income options."

While major REITs are arguably over priced [selling at premium to replacement value], there is reason to consider buying specialty midcaps, e.g. medical, and select foreign REITS, e.g. Canada and Japan. Some that we currently plan to purchase in 2005-2007 include.

1)    Host Marriott [HMT] Selling at significant discount to replacement value.  We would buy after the travel industry is damaged again later in 2006.   [If you are to be bullish on the North American economy, buy earlier].
2)    Legacy Hotels REIT [LGY-TSX) For Canada lovers such as your truly looking to increase northern portfolio exposure.
3)    Windrose Med PPTY [WRS] Will benefit from increasing outpatient trend.
4)    Japan Retail Fund Investment Sports a very low seismic lowest seismic risk [70% outside of Tokyo], near 100% occupancy, still holding 20 year key money deposits and trades at a significant discount to replacement value.  JRF also has a war chest ready for the upcoming “historic fire sales” that they (and we) forecast is coming.  This is best suited for foreign investors looking to increase their exposure to Japan.

For more, WSNW Subscribers may wish to review our newly updated premium subscriber post: S: REIT’s 2005/2006

3. Pierre Lassonde, the president of Newmont Mining, the world's largest gold mining company expects gold prices to hit $525 an ounce by the beginning of 2006. Lassonde noted that he thinks the U.S. dollar will lose another 15 percent of its value in June 2005 versus other currencies.
HW: I agree.

4. Starbucks growth plan gives priority to China and Bank of Communications to list in HK June 23. 
Despite these fresh Chinese stories, we recommend waiting for the BIG BANG before investing further in China itself.  As for SBUX, we find its P/E of 50 much too pricey, given increasingly sharp competition.  HSBC Holdings, on the other hand, will clearly benefit over time from its partner’s Chinese expansion.  If your mandate requires you to buy into the financial sector today, despite the threat of higher interest rates, then you could do far worse than HBC.
 
5.  "We are not sure when it is going to happen, but we are going to have an ugly, ugly spike in crude oil sometime between August and November. That is pretty scary.
Tom Kloza, chief oil analyst, Oil Price Information Service
HW: It must be very difficult forecasting more precisely without having a good financial astrologer on staff!

"Individual investors are concerned about international affairs, the erratic behavior of the stock market and the price of oil, among other things, and they are becoming more cautious in their outlook for the stock market in general. However, a down market is a very good time to look for bargains, to do your homework and identify those companies with strong balance sheets and quality management, and to buy stocks with long-term benefits for your portfolio."
Kenneth A. Janke, chairman, NAIC's BetterInvesting
HW: I agree with the philosophy, just not the timing.

“Greenspan has a tough act to sell. The market is saying there is a recession on the horizon, and he is saying we have strong growth ahead.”
Michael Franzese, head of U.S. Treasury trading, Zions First National Bank
HW: Maybe he should switch and be buying instead of selling!

6. Looking Long Term? Get Your Glasses
A recent academic study has found that few investors can focus on events more than five years ahead, even when those events are very predictable.

 No Bond Bubble

Arch Crawford on Financial Astrology
HW: Interesting reading of course, however we strongly disagree with his gold timing views.

7.  READER: Here is to hoping you are correct [on GOLD].
HW: SO FAR, SO GOOD.

READER: I don’t understand how you can expect gold to explode with Saturn moving into Leo in July...
HW: Saturn can also equal 1) scarcity and 2) reality. Acting as a commodity, Gold will rise as it responds to the same scarcity issues as have other commodities, such as industrial metals and petroleum. See gold for some of the other fundamental and technical reasons for our view.

READER: Are you and I the only ones that think inflation is much higher than the official projections?  I honestly think nominal inflation is running about an annualized 7%.  I think the bond market is in for a major shock when they realize what is going on.
HW: I agree 1000%. This is the MAJOR reason I recommend gold- it is the classic inflation metal.

READER: I am curious to know what your thoughts are regarding the dollar/euro.  I just returned from the beautiful island of Crete and was there while the French voted no on the EU constitution followed by a no vote by the Dutch.  It was indeed interesting to read in the international newspapers some concern about the strength of the Euro and the very real challenges of the EU.  Are there any astrological trends for either or both of these currencies?  I must say, if I were to invest in real estate again, Crete look mighty good!
HW:  We see September as a positive astrological time for the Euro. Overall, I calculate the EURO as somewhat undervalued when trading until 126 as it does currently. In general, I find the global real estate markets overpriced.  Still, Crete is nice indeed.

8. HERE WE TALK ABOUT AFUND CLIENTS
I have just returned from a stimulating visit to Vancouver and the IHI AGM.  I find there is now good reason for renewed hope among the long suffering shareholders.  I fully expect to see the Surrey Hi-Rise project sales of the first tower SOLD OUT within the FIRST MONTH, IF NOT THE FIRST WEEK.  We will be updating our IHI post on our website shortly. In the meantime, we are again recommending accumulation on weakness in appropriate risk/reward portfolio allocation size.  I am somewhat hopeful that we can raise this rating to an aggressive speculative buy sometime this summer or early fall.

We expect to be reporting shortly here on several new gold corporate clients.  Be ready to smash your gambling piggybank stash.

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PAST WALL STREET NEXT WEEK REPORTS
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(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)
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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 April and May 2005 an additional $3500 fee was paid.
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