1. FEBRUARY
MARKETS
2. UP STARS/DOWN STARS
3. GOLDEN OPPORTUNITIES
4. QUOTES
5. ON THE WEB
6. LETTERS
1.
TWO MINDS
BAD NEWS
"You
make money when there's blood on the streets."
Rendino,
senior fund manager, BlackRock Basic Value Fund
Hw:
You betcha!
All
agree the
For some markets and stocks,
concerns will be short and shallow; for others deep and long.
Analysts are split between
bargain hunting on dips, and selling into rallies
I believe BOTH views are right- Buy
the dips AND sell the END of major rallies.
There will be
both pockets of weakness and of strength. Think a “market of
stocks”, not a
“stock market”.
There is heavy
bullishness AND bearishness fighting across many markets: US stocks,
gold, Oil,
Euro etc.
Therefore
our
recommendations are: Both short term trading and/or
SELECTIVE bargain hunting.
THIS
COMING WEEK’S
ASTRO:
Mercury
Monday evening SD and A Lunar
eclipse on Wednesday evening: Bottom line: New thinking and when the
dust
clears next week a probable short term low/high in place.
TRADERS:
Given next week is strong astro: Mercury SD
Monday Night and Lunar Eclipse Wednesday night be EXTRA cautious.
INVESTORS:
Bear
necessities
asks when will the stock market become a buying opportunity? We think it will present
several 10%
opportunities: One was January 22, another we believe is/was ahead of
this
week’s February 20th Lunar Eclipse.
While
we are investing short term in a rising “Wall of
Worry”, my long term view is
well known: focus on protecting against downside risk.
KEY
DATES:
FEBRUARY 18, 20
DJIA:
12264
PIVOT R1 12450 R2 12500 R3 12770 R4 12900
SPX:
1340 PIVOT
NASDAQ:
2331
PIVOT S1 2300 S2 2275 S3 2225 R1 24005 R2 2480 R3 2500
XAU:
175 PIVOT
R1 170 R2 168 R3 163 S1 180 S2 190 S3 200
APRILOIL
--> $83
APRIL
GOLD
$900 PIVOT $854 SUPPORT R1 $926
R2 $940 R3 $950
New
Market Marker Sentiment is: Worry
and HEAVY Recession Fears.
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:
3
~ FV 0 UV; 5 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.
BUSINESS
& BANQUETS
At
the 10th annual BIO CEO INVESTOR Conference at
the Waldorf Astoria last
week, we found a number of interesting companies.
Two
standouts were:
Emergent BioSolutions (EBS) and Evotec (depending on US IPO price). Scheduled for immediate
due diligence are
Sembiosys Genetics,[SBS-T) and Verenium (VRNM).
Added
to our watch list: SkyePharma (SKP-L), Metabolix (MBLX) [AFTER new
management is
in place], Redpoint Bio (RPBC) and
Rigel(RIGL) plus three
currently private companies: Catalyst Bioscience, Elixir
Pharmaecutiicals and
Lux BioScience.
WSNW
readers should
periodically review our premium subscriber post: S:
Health 2008.
At
last week’s Spectra Energy [SE]
Analyst Breakfast at the St. Regis, we were impressed with this recent
spin off
from Duke Energy. After
some pro forma
due diligence, we intend to add SE to our core Energy holdings [see our
premium
subscriber post S:2008
Energy].Given, however, that
we remain bearish (short term) on Oil and have begun selling oil above
$96 to a target of $83 or below by MidMarch, our plan is to buy in Q1
2008 only
energy companies that would be highly profitable with oil $55-$65,
whether or
not that target is again seen in 2008.
AIG,
UBS
While we plan to do the bulk
of our financial
stock investing in April/May, there are some short term trades and/or
intermediate term investments that can be made beforehand, e.g. we
recommended
purchasing AIG last week. UBS is now on our watch list under $33. We
like when
stocks drop 50% or more from their highs, but this alone by no means
automatically places them on our buy list. Should UBS drop another
10-20% we
will consider a slow long term accumulation. Remember there is always
the risk
and a high probability of more write downs ahead by or before the next
reporting period.
FORTHCOMING:
A discussion of the Dow changes: MO, HON, BAC, CHX
3.
Gold's
path to $1,000 an ounce now clear?
Initially I had $930 for Q1 resistance and $963
for H1
resistance, however Tuesday’s news of the IMF gold sales,
while a yawn for
overseas markets, pushed gold down $20.Yet, historically IMF
sales precede large rises in the price of gold!
Irnonically
this generated a possible new $980 target in H1 2008 and made $950 our
Q1 P1
target shorter term. However, this all matters less if you are buyging
good
undervalued gold stocks as $550 and $600 is clearly too cheap for long
term
feasibility studies. $660
to $666 seems
to be more appropriate. And while I
don’t (yet) see gold going to
$1000 before later in the year,
Gold
above $900 is strong.
Gold
above $850 is strong.
Gold
above $800 is strong.
Gold
below $800 is a mortgage-your-house BUY!
READER:
In today Gold sharply lower prices, should we cover our short position?
Or just hold it neither Re Short it again?
What
do you expect for the Gold Trading Range until next week?
HW:
I
had already recommended covering shorts when gold became undervalued
$895). If we are
above 912 I would
definitely cover shorts If
not, use a
trailing stop.
However,
you do have a good profit, and that is why I covered with $50 quick
profits and
believe you can do so again [either on the long or short side
periodically].
So
hard to say, I am a bit more bullish here than my partner who thinks
gold will
drop further this month along with oil.
Bottom
line: Lock in profits now or put a trailing stop on. As for commodity weekly
[daily, monthly]
trading ranges, this info is available to platinum subscribers only.
4.
"Stocks
are reflecting the recession-related concerns."
Lee
Jwa Gun, chief investment officer, Dongbu Asset Management
HW:
As well they should. Our
long term
strategy remains: Buying and holding companies that reported higher
earnings
are likely to move up intermediate term.
“We're
seeing a clear pattern of sudden weakening in both consumer and
business
confidence, which frankly is the sign of a recession.''
James
O'Sullivan, senior
economist, UBS
Securities
HW:
Duh!
"Core
consumer prices are
expected to be up by a tame 0.2% in January. An upside surprise,
though, would
make the Fed wary of acting so aggressively. Such a report would keep
the Fed
on target for a 50-basis-point fed funds rate cut in March."
Brian Bethune,
HW: We note that reports just
before or after an eclipse day have a higher probability of dramatic
impact!
It's
Too Early To Invest in Banks
Emerging
markets' turn to shine
6.
READER: Fyi
how S&P 500 fared in past “ year of the rat”:
Period
S&P 500
1/28/60
–
2/14/61
9.41%
2/16/72
–
2/2/73
8.27%
2/2/84
–
2/19/85
11.00%
2/19/96
–
2/797
23.24%
HW: Thank you.
READER: Personal
message: If he says so...Amazing!
US
Treasury Secretary confident on growth, says country not in recession -
http://ca.news.yahoo.com/s/afp/g7_economy_us_paulson
HW: I am reminded of the old
Taoist saying: He
who knows does not
say; he who says does not know. :)
READER: Could
you please give me some stock picks like QQQQ from the broad US market.I
don’t know what to buy.
HW: SPY
(S&P 500) or DIA (Dow Jones
Industrials 30).
READER: Please
would you mind giving me your current opinion on oil. Do
you still think
the price will fall to around $80 by end of February ?
HW:
Thanks to Chavez, we raised our target from $80 to $83 and added
another two to
three weeks (until Mid March). We
are
slightly short now above $96, but will be more so thanks to next
week’s eclipse.
READER: One of your best calls -- which I recall your having made
tentatively
during our phone conversation in early November -- was that November
would be a
down month, December would see a rally, and "all hell will break
loose" in January.
If you were to give it your best guess -- given the tenuous nature of
the
market, its sideways potential, the possibility of a dead cat bounce,
etc. --
what do you think the next three months will look like?
Specifically, what major trends and turns do you foresee for February,
March,
and April?
You mentioned that you are a cautious bull. Do you
think we are at
a bottom? If we are near a rally, how much time does it have
or where do
you see serious overhead resistance?
HW: We remain
cautiously bullish short term. We will give our
March to May views end of the month.
READER: See
Crude at US $ 91.00+ at NYMEX ??? Forget about US $ 78.00+
level in
Feb'08. Do
not go short in Crude Oil till US $ 105+
levels.
Also
I agree with one of your reader's comments - ^DJI will retest its low
of
1/22/2008 ( 11509 ) in Feb'08 or before end Mar'08.
So
we disagree on both the issues - Crude Oil and ^DJI .
Let
us see what happens in balance days of Feb'08. I repeat Crude
Oil will not test US $ 80.00 pbbl by end Feb'08.
HW: That is
still not our view but I agree time (and markets) will tell.
READER: Suggestion:
including more of the Astrological detail would be nice in the weekly
report,
or may be another version of the report for those with interest and
some
understanding of the the stars.
HW:
Give away my secret sauce? We
prefer to speak market, rather than astro in our newsletter. Still as
per this
week, we do refer to some of the major astrological events.
READER: Please
could you please give me your thoughts on a possible euro low against
the
dollar in the coming weeks.
HW: Sorry
but this kind of information is only provided to our Platinum and
Diamond
Accounts.
"Can you afford NOT
to have financial
astrology in YOUR future?"
Stop reading Wall Street, Next Week, last week: YES, I WANT TO
SUBSCRIBE
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