1. DECEMBER MARKETS
2. UP STARS/DOWN STARS
3. GOLDEN OPPORTUNITIES
4. QUOTES
5. ON THE WEB
6. LETTERS 

1. A TIME TO BUY OR A TIME TO SELL?
Only you can decide how strongly you want to be in the stock market for Q1 2008.
Ask yourself: Are most US companies in better shape then 12 month ago?  With some exceptions, NO. We advise using the current FOMC rally to SELL and Raise recommended cash positions 5%-15%.  
BOTTOM LINE: While there may be some bargains in the stock market, better bargains are likely ahead!
Disclaimer: This is based on our valuation models and risk analysis, but is not an astrological recommendation. 

HYDE PARK SOAPBOX- GOLD
THERE ARE FOUR REASONS TO OWN GOLD: 

1. COMMODITY: DEMAND IS UP, SUPPLY NOT INCREASING AS MUCH
2. INFLATION: ONLY IN WASHINGTON DC IS THERE LITTLE OR NO INFLATION
3. CURRENCY: DO YOU BELIEVE THE US DOLLAR DESERVES TO STRENGTHEN?
4. SAFETY: DO YOU BELIEVE THE WORLD IS SAFER THAN LAST YEAR?

Short gold in '08, Goldman says
Last time Goldman Sachs issued a sell on OIL it dropped and then rallied much higher soon after.  Will the same happen this time with their sell on GOLD last week?
While gold CAN drop significantly short term, it should be bought as a portfolio HEDGE.  By February 2008, we expect it to be MUCH HIGHER! 

READ ON THE WEB
“How would you achieve a dollar neutral position? My idea is to buy dollar pegged currencies that may break the peg if dollar peg becomes too difficult to maintain.”
HW: This could be a good way to play forecasted US Dollar rallies with free disaster insurance built in! 

 
KEY DATES:     December 3, 4, 7
DJIA:                130250 PIVOT 12700 SUPPORT  13600 RESISTANCE
SPX:                 1480 PIVOT 1410 SUPPORT 1520 RESISTANCE
NASDAQ:         2660 PIVOT 2590 SUPPORT 2720 RESISTANCE
XAU:                 175 PIVOT S1 165 S2 160 S3 150 R1 178 R2 190 R3 198
FEB GOLD:       --> $850  800 PIVOT   S1 785 S2 780  S3 772  S4 760
JAN OIL:           $88 SUPPORT? $92 PIVOT R1 94 R2 95 R3 99 R4 102 

Market Marker Sentiment is:  TOO MUCH COMPLACENCY STILL- The only sane response is to own gold.
DON’T BUY AND HOLD: BE LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
2006 CLOSE:           DJIA 12463, SPX 1418 & NASDAQ 2415
2005 CLOSE:           DJIA 10717, SPX 1248 & NASDAQ 2205
DIJA:                      0 ~ FV 0 UV; 3 offer 4%+ Dividends 1 offer 5%+ Dividends.
Looking ahead, my question is whether 2008 will show less than 2% growth or be a classical recession?  
THINK SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK.
 

2. “Nov. 27 (Bloomberg) -- Freddie Mac, the second-biggest source of money for U.S. home loans, plans to sell $6 billion in preferred stock and cut its dividend in half to shore up capital depleted by record mortgage defaults and foreclosures.”
HW: It is time to review your higher Dividend paying stocks some of which may be cut in H1 2008.  I am now beginning to work on our 2008/2009 buy list which I hope to post to our WSNW premium subscriber web page soon.
You may wish to review S: 12 Stocks for Dividends and Income 2006-2007  and note how well these recommended stocks outperformed! 

3. If Ben cuts interests rates on December 11^th as many in the market hope, we will be raising our short term gold trading target from $850 to $875-$900. 

From our 11/27 WSNW BUY ALERT:
“We were surprised by yesterday’s bad news on NG. However I believe it is way overdone.  Back of the envelope calculations with all the bad news built in seems to be a value of at least $12. Hence we started buying from 10.55 to 9.36 yesterday.  We think anything under $10 is a steal for a relatively quick trade before February to $12 to $14. We have yet to do a full analysis but given my memory of its horoscope influences, this is a BUYING OPPORTUNITY.”
Trading Nova Gold update: P1 $12 P2 $14 P3 $16 P4 $18.  PIVOT $10 SUPPORT $8  

An interesting Tidbit: India's Golden Opportunity 

4. "It's a sucker's rally. The market is essentially hoping the Fed can rescue the economy. But they are discounting the onslaught of really lousy economic news."
Nouriel Roubini, RGE Monitor
HW: What me worry? 

“The market is realizing how much of a train wreck the economy is right now."
John Kilduff, energy analyst, MF Global
HW:  Not sufficiently or markets would be trading below its 2006 year end.

“What we've seen was more of a relief rally from oversold conditions than a new leg higher in the market place. The credit problems haven't gone away, and the risk remains in financials. We're not out of the woods because nobody has any real sense of the depth and breadth of this situation."

Paul Nolte, director of investments, Hinsdale Associates

HW: So sad, so true.

5. The Recession News Barometer is Raising a Big Red Flag: The Role of Animal Spirits in the Coming Severe US Recession 

Bear Refuses To Sing Happy Street Tunes 

DOW THEORY ISSUES A BEARISH WARNING

6. READER: The suspension of construction of Galore Creek [by Nova Gold]  is really bad news. I remind you, cost was calculated first at US$ 1.7 Bio. and than raised to 2.2 Bio. and now they are talking US$ 5.0 Bio. This probably means that many big big projects out there will have higher cost and this will slow down the procedure to go in production and at the end is very bullish news for copper.
HW:  I disagree I think IT will be $3.4B (3.2 to 3.8 range). Given its horoscope, I believe NG will be an out performer and is a great bargain under $10! 

READER: You wrote
"QUOTE 
    READER: Do you think Gold will go down to $760 any time soon?
    HW: It is certainly possible. anytime. On the other hand I prefer the bet that $850 comes first.  One has to decide if one is trading, investing or hedging with gold.  If not trading, then $760 would simply be an early Christmas present and another buying opportunity.
"UNQUOTE 
GOLD WILL NOT GO DOWN TO $ 760 anytime soon. It will test US $ 845+ first and then break US $ 873 (its 28 year old high ) in the next three to six months. It may correct to US $ 800 then. But $ 760 - forget it any time soon.
HW: 780 is current support but that is above our current Fair Value of 772. I hope you are right, but in today's frantic markets almost anything in possible. Should gold break down to 780 or 760 ahead of February 2008, we will certainly recommend more gold buying. 

READER: The financial news is making it abundantly clear that gold is at the mercy of the oil and U.S. dollar markets.  At what point does the intrinsic value of gold cause it's price to diverge from the impact of declines in outside markets?
HW: Good Question. I don’t know.

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