1. A TRILLION HERE, A TRILLION THERE…
The sales of safes are said to be rising, perhaps accompanied by the increasing sales of mattresses with zippers. Still, it is the rising sales of wheel barrels that will be the true “canary in the mine”. 

After locking in the biggest two day rally since 1987 with the S&P 500 capping a two-day gain of more than 13% as traders we went flat and await Part II of the new Market Zeitgeist December 2.

What events could send US markets below 2008 lows before January 20^th? A partial list follows:

• High profile corporate bankruptcy, e.g. GM, GS
• A Failed US Bond Auction
• Bombing of Iran Nuclear facilities
• Oil above $100
• Interest rates above 5%
• Unemployment above 8%
• Inflation above 4%. 

STARTING PREPARING YOUR DREAM PORTFOLIO 
Make a list of 10-20 stocks you want to own for the long term. The best of the best in each class, e.g. IBM, JNJ, VZ etc
Then choose Dream Prices given that you may to have to hold them until 2010-2011. Include some with safe dividends in a modest to serious recessionary environment. Sector choices should include food, energy, shelter, health care, entertainment….
Finally, place your GTC orders and whether they get executed or not, enjoy Christmas!!!
 

GUEST HYDE PARK SOAPBOX: Fed's 'Consumer Bailout' Encourages More Bad Behavior 

THERE WILL NOT BE A WSNW ISSUE NEXT WEEK AS WE NEED TO UPDATE WSNW PREMIUM POSTS.
 

KEY DATES:    DECEMBER 2, 8, 12
DJIA:                8800 PIVOT SUPPORT S1 8500 S2 8000 S3 7800 S4 7500  R1 9000  R2 9250  R3 9400  R4 9750
SPX:                  900 PIVOT
NASDAQ:        1500 PIVOT
XAU:                83 SUPPORT 120 RESISTANCE
FEB GOLD:       $912 FAIR VALUE
MAR SILVER    --> $12
XOI:                  800 SUPPORT  900 PIVOT 1020 RESISTANCE
JAN OIL:           $55 PIVOT   

The New Market Marker Sentiment:
Bleak Recession News is well known but is it built in? No...Yes...No... Yes...Who cares? I want a Xmas bonus!
[Part II 12/2; Part III 12/30]

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:                        6 ~ FV 4 UV; 13 offer 4%+ Dividends 9 offer 5%+ Dividends.
THINK SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK. 

2. Many quality stocks are cheap such as DJ blue chips JNJ, WMT and CHV. These are likely to outperform in 2009.
Yet stocks could be cheaper in Q1 2009. Hence we are nearly finished buying and prefer to sell if/when the market is higher. We still have cash for any super tax selling bargains coming up. 

ETFs for the New Presidency
HW: While the mainstream media has pointed out the obvious e.g. infrastructure, stem cells, alternative energy etc., a very big move can be expected in select African Stock Exchanges such as. Kenya and the NSE: Nairobi Stock Exchange. 

3. Citigroup says gold could rise above $2,000

Fair Value for Feb gold remains $912
Current Probability of $1000 gold by/before 2010   99%
Current Probability of $1200 gold by/before 2010   98%
Current Probability of $1500 gold by/before 2010   70%
Current Probability of $2000 gold by/before 2010   11%
GOT GOLD? 

READER: This Week Gold's trading up and down between 805-830, based on our experience in last three years on daily basis, usually there might be a surprising moving (upside / downside) .

In your calculation, will Gold going up / Going out from area of 805- 830? How do you see the Gold Price in December 2008?

HW: Short term the US dollar has some strength, hence a risk to gold. We are waiting December 2, which is another Market Marker before knowing more.  In the meantime as a trader, we are hedging some of our gold positions and currently are trying to buy in the 806-808 area, but will cover and possibly reverse for a test to 800 should markets so dictate. Intermediate and long term however, we continue to accumulate gold as investors. 

4. Two Cassandras and Alan Greenspan 

"If the Fed and the Treasury are backing the U.S. financial system, who is backing the U.S.?" 
Tony Crescenzi, bond strategist, Miller Tabak 

5. “We are in a very anomalous situation where you get these enormous, sharp, short-covering rallies and then it falls off again. It would be fair to assume that in a year’s time we’ll be substantially higher than we are now.”
Gavin Graham, director of investments at Bank of Montreal Asset Management.
HW: Yes, but unfortunately most likely denominated in American Pesos! 

"The market is so afraid of a deflation, Japanese-type story that the budget deficit becomes irrelevant, at least in the here and now’"

Joseph LaVorgna, chief U.S. economist, Deutsche Bank Securities

HW: Only to those who do not study history! 

“There has to be a limit on what investors can expect government intervention to do in terms of boosting overall market returns. The fundamentals of investing really require good earnings and positive growth outlooks.”
Eric Teal, chief investment officer, First Citizens BancShares
HW: Christmas Grinch! 

6. Dividends Disappear Fastest Since '58 as Citigroup, Genworth Conserve Cash 

Brand-Name Stocks, Bargain Bin Prices

The New Stock Market 

7. READER: Would like to know your opinion on Nova Gold following their press release this morning on the financial outlook of the company. Do you think it would be wise to sell with uncertainty of cash flow?
HW:  I don’t know. 

READER: Is it over for NG?
HW: I Hope not. I did some buying today at .50.  However these are my last buys without substantial new good news. 

Reader: Do you have any more thoughts on Nova Gold, do you think it still has a future? Still holding a substantial amount of shares but feel it’s to late to sell down at these levels.
HW: I don’t see the point of selling down here. I believe it has an 80% chance NG it will get its financing. 

REMEMBER: THERE WILL NOT BE A WSNW ISSUE NEXT WEEK AS WE NEED TO UPDATE WSNW PREMIUM POSTS.