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

The week of July 4^th, a number of scenarios are possible given the forthcoming Zeitgeist change. For one, while structural adjustments to the US economy will last at least until 2010, there is a possible short term trading bottom in place.  If so, our upside targets are: Dow 11225 and SPX 1350. Should markets rally that high, we are likely to begin selling/shorting. 

Given some negative astrological days for gold and oil in July, we are still bearish short term on commodities.  However, should oil especially remain strong in view of this, markets are not likely to rally but the opposite.  With high oil prices we can easily see to Dow 10,800 or even lower.  It is an Oil (US Dollar) queston. Markets must see Oil below $126 for a more sustainable “Recovery.” 

Yet even should market rally, we have more pain especially with financials ahead. They will NOT lead in the new market cycle.  Gold and precious metals could be one likely winner, especially IF oil remains strong, but in July they could also drop.  THIS TYPE OF MIXED PICTURE MARKET CALLS FOR BOTH VERY SHORT TERM TRADING AND VERY LOGN TERM INVESTING HORIZONS.  Look to individual stock values and less at the overall market this Summer. 

While I believe you can Buy and Hold long term some stocks profitably, it doesn’t mean they won’t go lower later in 2008. Take Citibank ( C ) for example. C may soon reach our $16 target, but it could drop even further.   Should it reach $16 after bad news, e.g. its next reported loss, I am likely to buy some. But should it reach it BEFORE reporting MORE bad news, then it could easily drop another 10%-20% first.  Like many financial sector stocks today, those that DON’T go bankrupt, will be seen to have been good long term buys from a 2011 perspective. 

BOTTOM LINE:
STAY CAUTIOUS, CASH RICH, AND CONTINUE TO USE NO MARGIN FOR INVESTMENTS. 

STATE OF THS US ECONOMY
PROSPERITY [Strong Profits]: 20%
RECOVERY [Weak Profits but Improving]: 24%
RECESSION [Small losses or Weak profits and Declining] 46%
DEPRESSION [Serious Losses] 10%
Hence by OUR numbers the US is well in our forecasted recession.
 

JULY ASTRODATES
7/02 New Moon 10.19 pm ET
7/18 Full Moon 3:59 am ET
7/22 Sun enters Leo 6:55 am ET 

KEY DATES:     JULY 3, 4
DJIA:                12300 PIVOT  11615 RESISTANCE
SPX:                 1278 PIVOT
NASDAQ:         2302 PIVOT
XAU:                 185  PIVOT
AUGUST GOLD:910 PIVOT 900 SUPPORT?  940 RESISTANCE
XOI:                  1500 PIVOT
AUGUST OIL:    140 PIVOT 130 SUPPORT  143 RESISTANCE 

The Market Marker Sentiment until JULY 4th is:  
#1 Housing & Oil Worry
#2 Commodities drop, Stocks rally; then Oil rallies, #3. Stocks drop; then baby stock rally & Oil ignored!
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; 9 offer 4%+ Dividends 4 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. Given that markets have just reached a key pivot, there are some pockets of value now out there.  We are currently looking at five stocks that we would like to own for the long term.  These may be trading and/or investing summer buys:

Valero (VLO), Pfizer (PFE) , Nova Gold (NG),  Bank of America (BAC), and the Amex Gold Miners Index (GDX).

Price and time entries vary and will be step in, not all at once buys.

3.  There is still significant short term downside risk to gold in July; Thereafter, far less.  We expect to shift from a net negative to a positive accumulate in July.  Short term it is not really about gold, but about oil.

If oil stays above $140, gold will be $1000 in short order.

Should oil retreat below $130, $850 should be retested.

The best values are in the quality precious metal microcaps.  We continue to wait, although to date our original plan to begin accumulation in June may have yielded better results.

4.   "One thing is for certain, if crude continues to rally, stocks are dead. If stocks have another day like this tomorrow, then the fallout next week could include government intervention in the markets."

Dale Doelling, chief market technician, Trends In Commodities

HW: I hope they intervene by both buying the market AND shorting Oil futures!

“People realize they've underestimated the second-half drag to earnings from all these macro issues that we're dealing with. ‘The outlook for stocks looks pretty bad.''

Alexander Young, equity-market strategist, Standard & Poor's

HW: Bad only if you are optimistic about the US economy, but most likely “acceptable” if you are realistic and cautious.

"The days are gone when people can just buy, hold and forget about their portfolios. You've got to work with someone who will reallocate at least once a quarter."

Ron Carson, president of Carson Wealth Management Group

HW: If volatility continues to increase, perhaps it should be monthly, weekly or even daily! J

5. DR. DOOM HENRY KAUFMAN ON MONEY, MARKETS AND THE FUTURE OF OIL

Bears See Darker Outlook for Bad News Banks

Gold revs its engine and squeals down the track

6.  READER: I’m looking for Monday, too.  I have had a 1240 target for quite awhile – anywhere around that level should work --?
HW: It could be here, it could be there, a lot depending on whether oil tops at our P3 number of 143 or goes higher AND stays higher.
But we are in agreement, now is  a good time/place to reduce and cover shorts or at least use tighter trailing stops as well as consider dipping in the water short term. 

READER: As suggested by an Asian analyst - ^DJI tested 11300 sooner than he predicted. Good call!  
July'08 Crude Oil prices: My short term target of US $ 141.00 pbbl was bull's eye again! No major correction in July'08. Again I disagree with you my friend! Crude Oil will hit US $ 150.00+ pbbl at NYMEX in July'08. 
HW: So far you have been more right than I have on Oil.  Perhaps July will be different! 

READER: Monday end of a quarter and downgrades may still come in.
HW: I am looking only to start investing longer term for some sectors ONLY.
A short term bottom MAY be here today or next week.  Anyway from a long term perspective, there are some real values beginning to emerge with the  right risk/reward range 

READER: With the war drums for an attack of Iran looming, could a perfect storm hit as early as this fall?  A lot of bad news out there.
HW: it is not pretty, but with such bad news, markets can also rally - if the "worst" doesn’t happen or if they drop a lot more earlier. 

READER: Quick question of the meaning of a word you use all the time: what does PIVOT mean? My dictionary says turning, you think this is the turning point trend reverse (somehow from your news letter I get the idea it isn’t).
HW:  It represents a pivot price.  Above that number, one wishes to be long. Below that number a trader would prefer to be short.