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

The loss that financial stocks are reporting was not as bad as as most investors feared. Wall Street rallied on earnings which normally would be viewed as a  disaster- The cup is half full/half empty.  There is more bad news coming- yet some of it is built in.  Hence as traders we will continue to buy most dips and sell most rallies.

Just as markets have relatively strong support circa Dow 10800, they have resistance increasing circa 11600, 11800 and 12000. 
We think Oil must drop $5 a week or more to keep markets "Up" and compensate for relatively poor earnings/forecasts.
Our preliminary advice: At Dow 11618 lock in short term, and at 10800-10900 lock in short/intermediate term profits.  Remember the cup is both half empty and Half full:
We expect to see markets both Lower AND higher than Dow 11500 for  the rest of the summer. 

FOR THE REST OF THE SUMMER EXPECT BIMONTHLY WALL STREET, NEXT WEEK .
 

KEY DATES:     JULY 21
DJIA:                11400 PIVOT 11850 RESISTANCE
SPX:                 R11275R21300 R3 1325
NASDAQ:         2300 PIVOT
XAU:                 185 PIVOT
AUGUST GOLD:-----> $905 
XOI:                  1315 PIVOT
SEPT OIL:         131 PIVOT S1 125 S2 1115  S3 110 R1 136 RESISTANCE?
 

The Market Marker Sentiment is OIL ON THE BRAIN!
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 2 UV; 7 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. Bank of America (BAC) has already given us a nice profit. Short term DOW 10800 is the floor, 11400 a market pivot and 11800-11900 a potential market ceiling. Already with 35-50% profit on BAC buys, we plan to lock in profits next week depending on whether 1) Oil is above or below $125 and 2) BAC is above or below $28 and then $33.  By the end of July, we plan to take some profits as well as have trailing stops in place and/or write October 30 or 35 BAC calls. 

VLO we plan to hold until at least $38-$40.  We will update on our website how we plan to trade and/or hold  PFE, NG & GDX. 

In our view, markets need a drop of $5 per week to maintain upward momentum.  We consider much of our buying last week, short or intermediate term trades, not long term investments (yet).

3.  With Oil hopefully ready to test $125, and short term Euro weakness, AND given that our current Fair Value for Gold is $905, we remain short term bearish to cautious.  However, we hope to return to being gold bulls in the not so distant future. 

In the meantime, we are happy to see our favorite gold stock Nova Gold (NG) finally getting some respect last week and breaking out above resistance.  To me NG is highly undervalued today at even $12.50.   While we ourselves did not buy more last week as we are still trying for a circa $7-$7.50 scalp. Note: we have a core position and are not afraid to make trading buys higher, given our previous successful exits at $18 and $20. 

As we have said many times before, when you are ready to buy gold shares, Nova Gold (NG) should be one the first picks you consider.  We conservatively expect to see $12 and $14-$16+ before year end. 

4. "The open question is whether we’re in for a bad couple of years, or a bad decade."

Kenneth S. Rogoff, former chief economist, International Monetary Fund

HW:  When you say "we" who are you referring to?  

"We haven't seen the worst of defaults yet. We're still in a bear market and it's time to remain cautious.''

Shane Oliver, head of investment strategy, AMP Capital Investors.

HW: Cautious, yes, but opportunistic too!

"Investors are happy that the write-downs are under control. That’s what’s driving Citigroup’s price now — their write-downs."

Stuart Plesser, banking analyst, Standard & Poor’s Equity Research.

HW:  True, but as expected this is less than "reality".  Still a buy under $16 has merit.  We will be reviewing its astro this mon

5. Uncomfortable Answers to Questions on the Economy

Is this a recession? How bad is housing? When will banks revive? Is my job safe? Are consumers done? Who’s to blame?  

Fed's Stern Says Interest-Rate Rise `Can't Wait' Until Markets Stabilize 

Worst-case scenario? Canadian hard assets would skyrocket 

6. READER: As I remember you said some month's ago that Dow could reach 16000 during Autumn, before the president election.
HW: Not me!!!  

READER: You already got your 35% in less than 24 hours. Talk about good Astrology! Does that call for selling now?
We're going to hold our large position and so recommend to clients. Incidentally, Henry, thanks so much for a very useful, well run conference. Keep up the
good work

HW: Are we talking about OIL or BAC? If Oil, it should be down next week so wouldn’t cover quite yet,  BAC we would begin to lock profits in at 28 to 29 or using a trailing stop starting at 24 after Fridays full moon. Thereafter I would raise my stop quickly or slowly depending depending on whether you wish to lock in a very profitable trade or have a new core investing position. If the latter, consider and be prepared to write October 30 or 35 calls depending on market action next week 

READER: I recall your having mentioned around New Year's that you foresee an astrologically date in August.  What was it?  Do you envision a high or a low? 

HW: Which market?  US?  China?  Oil?  Gold?  Remember we think as a global hedge fund and cover many markets?