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

1.                   W MARKETS, L SHAPED ECONOMY

• Markets will remain volatile into May, while the US economy will remain challenging optimistically for 2+ years, worst case 9 years.
• Both April earnings season, April tax receipts (corporate & individual) as well as revenue from 2008 stock market profits poor.
• There will be continued market uncertainty for some time.
• Markets will rally when either fundamental analysts are wrong by over-estimating losses and/or it is believed there is a tradable bottom in place.
• Markets will rally when the credit/bank crisis appears to have been or will be solved. 

Our advice: Stay patient.  Prepare lists of stocks to buy both for short term rallies and long term investing.
 

KEY DATES:    FEBRUARY 19, 27
DJIA:                7800 PIVOT 
SPX:                 825 PIVOT S1 810  S2 800 S3 790
NASDAQ:        1535 PIVOT
XAU:                130 PIVOT 135 or 145 RESISTANCE
APRIL GOLD:    940 PIVOT S1 925 S2 900 S3 880   R1 955 R2 960 R3 980
MAR SILVER:   FV $11.50
XOI:                  925 PIVOT
DEC OIL:          52 PIVOT 

The New Market Marker Sentiment is A Known Weak Economy; so what me worry? No! Buy.
2008 CLOSE:           DJIA   8776, SPX   903 & NASDAQ 1577
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:                        7 ~ FV 5 UV; 13 offer 4%+ Dividends 7 offer 5%+ Dividends.
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK. 

2. We believe we were more realistic than most regarding corporate earnings, yet we found ourselves cutting our price targets more than once during earnings season.  See recent updates for S: DJIA for example. 
Additionally, as more and more companies for good reason reduce dividends in 2009; our valuation models are correspondingly modified. 

NOTE: We are planning at least one positional buy before the Ides of March ideally DJIA 7500 OB/SPX 790 OB. 

3. “Gold is the ultimate currency hedge. If central banks are going to shovel massive amounts of paper out there, gold will ultimately respond to that.”
Michael Darda, chief economist. 

Goldman Sachs lifts gold price forecast to $1,000/oz
HW: Could be more a SELL signal than a BUY signal. Still there is money behind this forecast.

Our current Fair Value of Gold was lowered on Thursday to  $892 
WSNW subscribers can download the power point outline of our presentation of S: GOLDEN THOUGHTS from our February 2009 Winter Triple Gold Conference. 

4.  “We suggest putting down the champagne glass and drinking a cup of coffee. The policy euphoria associated with the ‘bad bank’ plan will prove to be short lived.”
Barry Knapp, chief U.S. equity strategist, Barclays
HW: Almost dead on arrival, yet think more of the night of the living dead. 

“You cannot wait until things turn positive for the market to go up. It typically starts up several months before the economy hits bottom.”
Stanley Nabi, vice chairman, Silvercrest Asset Management Group
HW:  Yes that is why we see a W market. 

“Gold is the only thing you can count on.”
Andrew Martyn, comanager, Davis-Rea.
HW: Even as a Leo, a born gold lover, I disagree.  I believe the “essentials” of food, energy and housing bought at the RIGHT price and RIGHT time can out perform.
 

5.  HOW WOULD YOU INVEST A $100,000 WINDFALL?

"Markets are very scary, so invest only in bargain-priced stocks to hold until 2010 or 2011. Inflation is a serious risk, and we expect $1,000-plus gold and oil above $70 a barrel before year-end. A suggested sector allocation, along with a few Canadian picks: 20% precious metals (Agnico-Eagle), 20% energy (Enerplus, Suncor, Husky, Canadian Natural Resources), 15% health care, a 15% trading portion (buy with the Dow at 7,400 to 7,800, sell at 9,200 to 9,600), 10% technology, 10% miscellaneous (including SNC-Lavalin), 5%. 

How to reap dividends 

Buffett, Who Invests `Forever,' Finds Shorter Time Horizons Unprofitable 

6.  READER: How's about your View from Astrology Terms?
[Gold] Going up to $1000 first then Drop nearly to $780-820? Or Drop first before rebound to $1000?
HW: Re: Astrology I would have thought it would be down more by Thursday February 12. That is a line in the sand time and our price point of $955-$960.
I am still short term bearish on gold here, and think 900 more possible, but if we get enough above 955 or so, I will close my bet.
On the Downside, I am first looking for 860-880 short term but my confidence level here is not high as signals are very very mixed. 

READER: DJI can test 7400 to 7000 in February 2009. This will be the yearly low for ^DJI as of now. We will review the situation by end June 2009. Some analysts are talking of ^DJI to test levels of 6000 - 5000 - 4000 in 2009. But these guys are not mentioning the months!  
In February 2009, when ^DJI falls as predicted above - Gold will also correct from close of 1/30 of US $ 927.00 pto to about US $ 800.00 to 780.00 pto. Time to enter Gold longs or physical purchases.
HW: What you forecast is certainly possible.  

READER: Definitely the volatility has diminished last few weeks. Now some are talking about S&P 500 going to 550- 650 level.  This is a new frame I gotta start thinking about if there is high probability.  What do you think about this?
HW Not my view.  We expect to see spx 740 to 770 and 790 short term.. However 720 is not impossible, but we will buying ahead of that. 

READER: RE: GE....what a mess they are too!...amazing!...
...makes me afraid to touch anything that was once considered a good company...I bought at $16 and thank god only 200 shares...what bad luck....I stopped out at $11 and really did not expect it to go this low...do you think are they worth bothering with anymore? is anyone?
HW:  I believe GE will be do well in  H2 2009.  I would not buy any financials for some time as anything but a short term closely stopped trade.
I much prefer to accumulate energy and precious metals SLOWLY over the next few months.  I SEE NO RUSH NOR ANY REASON TO BUY JUST YET AS MARKETS HAVE YET TO HIT BOTTOM (Where is the selling climax?). 

READER: You said General Market would have ends the positive astro? Very negative astro after February? until when? Also Apply to Gold Market?
IYO, When 'll Gold Start Going Down? How Much Percent that Gold would  be 1000++ in May / June 2009?
HW: I am not sure I know the answers to your questions.
As for gold if it is not under $900 by Wednesday or Thursday, then GS view that is will be $1000 sooner rather than later is posible. How likely, I cannot say as I have mixed feelings.  While basically a gold bull and believe many quality gold stocks are undervalued, I am not comfortable being long gold just now. If it doesn’t retreat this week, I will not fight it (short it) and will rebuy selectively some gold stocks as they are basically cheap as long as gold stays above $900.
My Current Fair Value is down slightly to $897 [Now $892].  Sorry I can’t be more specific this time, but there are MANY cross currents and risks- any trading of gold should be closely stopped whether long or short.