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

1. FRIDAY’S NEWS WAS GOOD?
20,000 Jobs Lost as U.S. Registers 4th Monthly Dip & Fed Moves to Loosen Tight Credit

I didn’t believe so.  First, as is often the case, the job numbers were suspect—who really believes the finance sector GAINED jobs?  And if it did, will it going forward?  As for the Fed doubling its loans and accepting more kinds of called triple A collateral, surely that is a bad augur.
On the other hand, perhaps they will eventually lend ME money. I have some used furniture that I could put up as collateral and it could have better long term value than some CDO’s!  :) 

INVESTORS: Monday May 5 premarket @8:18 am ET is a New Moon. This will represent a potential NEW market as DOW 13,000 and NASDAQ 2500 becomes the short term Floor or Ceiling.
We believe there is a 60% chance that US markets have already topped in MAY. Hence, we plan to ride it down to a test of 12K.  If not, and markets rally this coming week, we plan to try again May 19/20 as well as in July. 

 
KEY DATES:     MAY 5, 9
DJIA:                13000 PIVOT 12700 SUPPORT R1 13080 R2 13188 R3 13264
SPX:                 1415 PIVOT 1375 SUPPORT 1425 RESISTANCE
NASDAQ:         2500 PIVOT
XAU:                 163 SUPORT 185 RESISTANCE
JUNE GOLD:     860 PIVOT S1 850 S2 825 S3 800 R1 875 R2 888 R3 900
XOI:                  1490 PIVOT  R1 1500  R2 1510 R3 1540  S1 1420 S2 1380 S3 1320
JUNE OIL:         116 PIVOT 108 SUPPORT 120 RESISTANCE 

The Market Marker Sentiment is:  Worry and HEAVY Recession Fears changes end of May.
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:                      2 ~ 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.  As the top in May may be in place, we see no reason to buy stocks just yet.  However, we are watching a number of precious metal stocks that are currently undervalued. 

3. "It [Gold] will stay very volatile for sure and we need to have our eyes on the forex market so when the dollar is able to recover more, $800 is probably the next target on the gold side."
Michael Kempinski, senior precious metals trader, Commerzbank
HW: Next stop a test of $800 is almost as likely as $900. 

"It [Oil] could go up just a little bit more. I think it's running out of steam."
Fred Rozell, retail pricing director, Oil Price Information Service
HW: I concur. 

This coming week sports MAXIMUM RISK FOR THE COMMODITY SECTOR.  Initially I had thought to do a first positional buy of Gold at $878, but not before Mid May. Hence, our first buy may be $800-$825 if $850 support does not hold.  We plan to accumulate gold stocks end of May to early June, and thereafter for the next three months.  We are in less of a rush to buy gold and silver, as gold and silver stocks offer a better value, i.e. Even if gold were $800, a number of gold stocks are Undervalued.  As for Oil, we expected it down in April (it wasn’t) and we again expect it down in May. That remains our bet.  However, if $112 is not the ceiling within two weeks, we need to reduce that bet. 

4. "We think inflation will stay sticky high. It’s driven by forces outside the U.S.  One big force: the huge demand for food and energy by India and China.”
Allen Sinai, chief global economist, Decision Economics
HW: The fault dear Brutus, lies not in China and India, but in ourselves! 

“We think we're in recession, but I don't know that the GDP numbers are going to turn negative at all in 2008.  If you were to take out the swing in inventories, these numbers would be negative.''
Mark Vitner, senior economist, Wachovia
HW: Even so, it is a “joyless’ economy, is it not? 

“So far there's a mild start to the recession. The data we've been seeing is weak but it's not deteriorating endlessly.''
Aaron Smith, economist, Moody's Economy.com
HW:  Yes, but if the statistics were more accurate, just imagine the pain! 

5.  Bear Market Fat Lady Has Not Sung
Keep a lot of your powder dry for the buying opportunities that lie ahead. 

Buffett: Economy in a recession, will be worse than feared 

Dow 14,000: A Rally For The Ages 

6.  READER: Do you think Citigroup is going to go up from here (no more corrections)?
HW: I don’t know! Stocks are likely to be down on Friday. Also while Citibank should soon move up I don’t like its current price and it could fall down further first.
Bottom line: I don’t know and the most I would pay for C is $23, but obviously would prefer to pay under $20. 

READER: On Crude Oil I would like to mention again that at current supply of approx. 86 million barrels per day - the global demand is met. There is no demand supply issue in case of Crude Oil as of today. Let me make this very clear. 
Crude at these levels of $ 116 or any level above US 75+ pbbl is purely on account of speculation and investment by investors who have a ' vested interest ' in this Black Gold. 
My target of US $ 120 pbbl was met last week. My next target for Crude Oil is US $ 180 pbbl by Mid 2009. This speculative bubble will not burst as there is too much money at stake. I repeat these levels of Crude prices in excess of US $ 75 pbbl is purely speculative.
HW: Agree with your valuations, but not with your Oil forecasts, but I was wrong before and you were right! 

READER: Do you see today market at $850 is a right timing to do First Positional Trading Buy? Or do you see it will be lower again about $800? How do you expect the bottom range in Gold at 2008?
HW: Initially we thought $850 would be a good positional first buy on gold.  However, it can be lower next week.  Hence while we have recommended covering many gold shorts to good profits, we are not ready to BUY and HOLD Gold.  This will be a process that we plan to start at the end of May to early June and will likely take place over 90 days.  We also prefer to buy gold stocks more than gold.   I am not sure whether we will see $800 or even $781, but $825 does seem now possible, especially if oil drops below $108 as we expect.
PS There could be a short term trade from 850 to say 870, but it would need a tight stop. At this point, I think gold is going bidirectional and its technical action plus astrological indicators suggest it is too early for a first positional buy and hold.

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