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

1. DOW 12500, 12450, 12250, 12000 or 11771 SUPPORT?
Last week we issued a supplemental January 07, 2008 WSNW edition: 

OUR 2008 MANTRA: BE PATIENT AND ACCUMULATE ON WEAKNESS continue to apply.
Are markets ready to break support at Dow 12700, SPX 1400? NASDAQ HAS ALREADY BROKEN 2500 SUPPORT.
Our next interesting numbers are Dow 12540, SPX 1390 and NAS 2440.   Ahead of FOMC anything is possible, but I remain in NO rush to buy. 

Markets are now very close to our first intermediate downside trading targets:
DOW 12450, NAS 2400 SPX 1390 

But why should investors rush to a store that was offering only a 10-15% discount?  If you are a cosmic value investor as I am, the answer is obviously no.
Most analysts expect US companies to warn of a more difficult economic environment ahead, as the US economy is slowing down and may enter a recessionary period.
Yet, we also note Ben’s childhood wish to be grow up to be a Bear market killer. Hence a surprise cut of .75% is not out of the question.  This would send markets soaring (short term) and propel start gold out of its current trading range to test $1000.
 

It is therefore POSSIBLE that we have a short term potential bottom coming this week, assuming

1) We have a classic Monday down, Tuesday morning down market bloodbath and/or

     2) Ben can’t wait until January 31 to lower US interest rates.
 

If so, WE ARE LOOKING TO LOCK IN PROFITS and COVER TRADING SHORTS.
We may begin a short term TRADING BUY circa DOW 11750 to 12250. In this scenario, our NASDAQ BUY is under 2400 circa 2331.                                   

 
KEY DATES:     January 15
DJIA:                13500 SUPPORT?
SPX:                 1400 PIVOT
NASDAQ:         2440 PIVOT  2331 SUPPORT
XAU:                 175 SUPPORT R1 195  R2 200 R3 225 R4 250
FEB GOLD:       888 PIVOT 875 SUPPORT 900, 930 OR 1000 RESISTANCE?
FEB OIL:           92 PIVOT 88 SUPPORT
MAR BP:          -----> $1.98 

Market Marker Sentiment is:  TOO MUCH COMPLACENCY STILL-ONLY SANE RESPONSE IS TO OWN GOLD.
DON’T BUY AND HOLD: BE LIQUID WITH A BALANCED AND DIVERSIFIED PORTFOLIO!
2007 CLOSE:           DJIA 13264, SPX 1468 & NASDAQ 2655
2006 CLOSE:           DJIA 12463, SPX 1418 & NASDAQ 2415
2005 CLOSE:           DJIA 10717, SPX 1248 & NASDAQ 2205
DIJA:                        0 ~ FV 0 UV; 4 offer 4%+ Dividends 2 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. The following is an excerpt from our S: 2008 Income Energy post: 
“Until recently, high energy prices have continued to defy fundamental supply and demand issues.  Political risk plus the entrance of ETFs and fresh pension money has Oil now often trading as a new currency (US Dollar Hedge) as with gold. We see Oil trading down from $100 in H1 2008, although thereafter it sport some positive astro. As fundamental investors, we see Oil's value as closer to $55-$60 than $100! As Traders our intermediate term targets are P1 $88-$92 and P2 $86 P3 $78
Given this macro view, we first recommended DISTRIBUTION in H1 2008 at XOI 1550 and selling Oil at $100.

Clean Tech and "Energy Efficiency" are key watchwords. The PowerShares WilderHill Clean Energy ETF (AMEX: PBW), PowerShares Cleantech ETF (AMEX: PZD), PowerShares WilderHill Progressive Energy Portfolio (AMEX: PUW) These ETFs offer exposure to this sector without the company-specific risk. Unfortunately, we don't see….”
WNSW SUBSCRIBERS can find our 12 2008 selections plus read our entire premium post at S:2008 ENERGY 

3. "We're still in the very early part of the cycle. People have to look at gold as an instrument which right now has a demand-supply imbalance which looks very favorable. Most people still don't have the asset."
Juerg Kiener, Swiss Asia Capital 

"Gold is going to be a great investment in 2008. The $1,000 an ounce is certainly in view now."
 Greg Smith, managing director, Fat Prophets U.K. 

Gold, like the stock market today is highly is volatile given there are many very emotionally charged BULLS and BEARS. 

KEY POSITIVES FOR GOLD

• January 9, “The start of Shanghai trading was ‘`the biggest event in the gold market since the launch of the gold exchange-traded funds over the past few years,’'' John Reade, analyst, UBS AG
• Big Ben (Bernanke) whose fear of deflation is so that great that he is willing to drop US interest rates and risk inflation. 

KEY NEGATIVES FOR GOLD

• It is now at is the upper end of its  trading range with either $900 or $930 a possible Q1 top.
• Oil, along with many based commodities is likely to continue to drop in H1 2008; if so, gold can weaken in sympathy. 

Current Probability of a $900 Gold short term trading High for Q1 2008: 18%.
Current Probability of a $930 Gold short term trading High for Q1 2008: 32%. 

4. "The debate here is whether the economy is quite weak or whether it is falling into a recession. So far, I'm in the quite-weak camp."
James O'Sullivan, economist, UBS Securities
HW: I am not.
 
"There are a trillion dollars of sovereign wealth funds searching for a home. The capital is available. There just needs to be a confidence to invest it."
Kevin Shacknofsky, portfolio manager, Alpine
HW: Fundamentally, it is a question of supply and demand. 

"Since 1949 the unemployment rate has never risen by this magnitude without the economy being in recession. We now put ourselves on recession watch.''
John Ryding, chief U.S. economist, Bear Stearns
HW: Just "now"?  Who is Bear Stearns financial astrologer? He/she seems to be a bit negligent to me! 

5. Sovereign Funds Invest Where Buffett Won't 

10 Surprises for 2008

10 Themes in 2008

6. READER:  Great interview! Great predictions! Great year!  Keep up the good work!  I think gold will do better in 08 than 31%, but most importantly gold stocks will outperform 07 and the juniors will outperform seniors.
HW: I agree with your latter two conclusions.  However for gold to exceed 31%, it would require a close above $1093 ($834.50 12/31 NY Closing Spot Price).  That might require Ben to run his printing presses 28 hours a day instead of 24! :) 

READER: And was the fund return 30% annualized for the quarter or 30% for the quarter? Either way, of course the later is excellent, but the former isn’t bad either.
HW: AFUND PERFORMANCE was 38.38% was for the fourth quarter 2007- annualized it was Triple Digits. 

READER: I have been reading that gold is peaking.  Do you agree? If not, when do you see it reaching a top?
HW: Short term [Q1 2008] yes.  Longer term NO!  By the time of the FOMC, if not before, I prefer owning selective gold stocks to physical which we have begun to distribute $880-$900.  However, gold remains a necessary hedge for ALL of 2008. 

"Can you afford NOT to have financial astrology in YOUR future?"
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