1. ARE WE THERE YET?  NO, BUT THIS PAST WEEK WE WERE CLOSE IN TIME & PRICE
Short term, once we see Dow 7500, it is a coin toss whether it is 8K before 7K.  From a longer term view, markets remain strongly undervalued below DOW 8000, SPX 825 and NASDAQ 1500 

March 13 Value Engine report as usual is somewhat more bullish, but is not dissimilar:
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However, we have forecast a W and NOT a V market in H2 2009. Also in 2009, we see at least 3 more TIME challenges, one of which is coming soon. Additionally, specific challenges ahead may include
 

Ø       March 31 GM deadline

Ø       March 31 Hedge Fund Redemptions

Ø       April 2 G20 Meeting      

Ø       April 15 US Tax short fall

Ø       April Earnings Season

 Current probability that the Dow 6500 zone is THE 2009 bottom:    50%.
Current probability markets end the year higher than last Friday:     97%
 

The topic for the Family Office & Wealth Preservation Conference 22-23 April 2009 Geneva, Switzerland most appropriately is:
How to avoid getting poor after having been rich: The main mistakes to avoid:
Failure of setting up a secure legal strategy, failure of developing a safe tax scheme, and failure of protecting the trans-generational interest in their family.
Poor allocation of resources, poor timing, poor risk control, poor adaptation of strategy along with the environment changes, poor global control.
HW: If I were there speaking, I would add Not paying enough attention (or having) a family astrologer!

Their five major conference topics for Investing in a Recession however, are also my main focus:
 

Ø       Bankruptcy and distressed investments

Ø       Energy and commodities

Ø       Infrastructure finance

Ø       The demand and supply for gold, art and investing in agriculture

Ø       Timing and cyclical markets

  

 

KEY DATES:  March 18, 23
DJIA:              7000 PIVOT R1 7500 R2 7800 R3 8000
SPX:               750 PIVOT
NASDAQ:       1400 PIVOT
XAU:              120 PIVOT 105 or 110 SUPPORT
APRIL GOLD:  925 PIVOT S1 905 S2 892 S3 880   R1 940 R2 960 R3 982
MAY SILVER: FV $12 13.50 RESISTANCE $12 or 12.50 SUPPORT?  $14.50 RESISTANCE
XOI:                750 SUPPORT 900 RESISTANCE
DEC OIL:         50 PIVOT $45 SUPPORT $55 RESISTANCE 
 

The Market Marker Sentiment is Some worry, then bargain hunting, then return to worry.
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
DJIA:                     9 ~ FV 14 UV; 10 offer 4%+ Dividends 14 offer 5%+ Dividends.
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK. 

2. The AFUND sector focus for 2009/2010 remains primarily quality undervalued companies in the following sectors:
 

·          Agriculture

·         Entertainment (2010)

·         Distressed investments (H2 2009 Real Estate)

·         Energy and commodities

·         Health care

·          Infrastructure

3. “Gold is still an exceptional buy. Traders will start looking at more traditional relationships like future inflation, government spending and devaluing of currencies.”
Frank McGhee, head dealer, Integrated Brokerage Services
HW: We are still expecting a gold retest under $895 next Week. Sometime thereafter before May, we plan to reverse and go long.  Ideally, we wish to make our first trading buys with stocks such as SSRI 10.70 OB and the GDX 28 OB. 

4. “What’s important is we haven’t retraced any of the week’s moves. Even if it’s a bear market rally, the good news is the duration.”
Art Hogan, chief market strategist, Jefferies
HW: 4 whole days- Wow! 

"The biggest question for investors now is, 'Have we put in the lows and is it safe to get back into the water?' "
Michael Sheldon, market strategist, RDM Financial Group
HW: My answer is an unequivocal MAYBE! 

"We are going to remain cautious because the slightest bit of bad news could turn this thing around."
Joe Arnold, investment adviser, Dawson Wealth Management
HW: You betcha! 

5. Stocks for the Next Great Depression 

Pimco Predicts Inflation Will Return, Joining Warren Buffett, Marc Faber 

Which Companies Are Stashing the Most Cash? 

6. READER: Is this frightening market going to turn around???
HW: It will turn around.
Note: This question was asked before Tuesday’s rally. :)
 

READER: I want to buy Oil stocks.
HW: I believe Oil is cheap but can stay low into April. Still, Oil stocks today are screaming buys. Our three current favorites remain:
1. Valero [VLO] currently 17.50.  P1 is $24 but long term we see it worth $40.
2. Spectra Energy [SE] now $12.30 with a safe $1 dividend.
3. Parallel Petroleum [PLLL] Our speculative high risk/high reward Oil play closed at $.83 but worth well over $5 when oil is above $60.  PLLL drop to $.50 but a screaming bargain under $1.

 

READER: AXP is a one hundred percent case of bankruptcy. You may laugh now but come September 2009 and you will say - A great call ! GE - Balance Sheet being further leveraged by additional US $ 8.00 billion. Raising Bonds. This is addition to what Warren Buffet lent to Immelt at a guaranteed dividend of 8.00 % against 'preferred stock'. This company is leveraged far 'beyond' the usual norms of debt in business. They will not be able to service their debt. Will be 'nationalized' by Obama & Co. within 2009. You may again laugh at my prediction. Come December 2009 - you will say BINGO.
HW: While I am generally avoiding the financial stocks, I tend to like these two plays. I don’t intend to put a lot of money into it, but given that AXP makes a lot of money from me, and GE has “friends” and a good horoscope in H2 2009, I don’t believe either will be bankrupt in 2009. As for 2010, I have no view.
NOTE: GE and AXP are both up more than 30% since our recommendation. We would now stop them at even. We may recommend taking ½ trading profits when up 50% or 100% depending on overall market conditions at the time. 

READER: How much should we pay / subscribe for information only related to Gold? Monthly, Quarterly or Yearly?
HW: Currently this is available only as part of our commodity service which is $50K per year on a annual basis or $5,000 per monthly on a monthly basis. 

READER: PLLL (recommended in the newsletter) seems to be in some trouble here.  Are you still a buyer??
HW: I bought several times and may do more, but for the sake of money management I cannot just keep buying. But if you don’t own a lot, I think it is medium risk, very high reward speculative buy. Technically, it may go as low as $.50 (or not) but then should rally to $2-$5 depending on the price of oil in H2 2009.  Of course, in case we are wrong, we always recommend buying stocks in a basket. never just one.