Wall Street Next Week, November 16, 2009

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

1. YEAR END PROFIT TAKING OR BIGGER BONUS?
Last week, I raised the question of what is “bad” for stock prices. Two important factors are
1) Static and/or declining earnings and
2) Analyst OVER estimate of earnings.
What will Q1 2010 markets be like? As we expect both of the above conditions will be met in H1 2010, we are bearish from current price levels.

However, well before then, there is something far more important to think about- Wall Street bonuses!
One forthcoming battle could be between fund managers whose good gains have already been made and may not wish to risk give backs vs. fund managers who are largely in cash and may feel compelled to play catch up.

NEW MOON MONDAY & SATURN SQUARE PLUTO
Will markets remain range bound, fall back to reality or continue to move skyward?
Astrologically, Monday will provide one key. Oil (Pluto) could continue to drop (Saturn) closer to Fair Value, currently $58. If so, we would expect gold as well as the rest of the

market to join in.

Alternately, the US Dollar could fall from benign neglect instead. Monday’s Retail sales will provide another key.
In the meantime, we remain somewhat impatiently in cash.

TRADERS: Options Expiration Week. We continue to believe markets are overvalued and ready to correct. However, we don’t intend to fight the tape aggressively until late December.

INVESTORS: My long term view is well known. Focus on protecting against downside risk and only buy and hold stocks with sustainable earnings at Deeply Discounted Value pricing.
Invest only in stocks at bargain basement prices that you are willing to hold until 2011.
Soberly prepare for the reality of an L or U shaped US economy for the next two to seven years.

FAIR VALUE DOW 8750 NAS 1775 SPX 895
LONG/SHORT PORTFOLIO: L1/S2

KEY DATES:     NOVEMBER 16
DJIA:                10700/11300 DUAL PIVOTS
SPX:                 1100 PIVOT 1060 SUPPORT 1125 RESISTANCE
NASDAQ:         2150 PIVOT
XAU:                 170 SUPPORT 190 RESISTANCE
DEC GOLD       1100 PIVOT 960 SUPPORT 1130 RESISTANCE
DEC SILVER:    17 PIVOT
XOI:                  1100 PIVOT
DEC OIL:          74 SUPPORT? R1 78 R2 80 R3 84

Market Marker Sentiment until March 2010 is Less Volatility with Market Cross Currents.
Stocks Meander slightly ahead and favor defensive plays.
The US$ doesn't collapse & Commodities may not be needed as a safe haven panacea.
7/21 PRE-ECLIPSE: DJIA   8915. SPX   954 & NASDAQ 1916
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:                       7 ~ FV 1 UV; 5 offer 4%+ Dividends 2 offer 5%+ Dividends.
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK.

2. BUSINESS & BANQUETS
At last week’s Merriman Curhan Ford Investor Summit, we favorably reviewed 3 companies on our alternate energy watch list: Acorn Energy (ACFN), Beacon Power (BCON) and Hydrogenics (HYGS(D)) and added 2: Alter NRG (ANRGF) and Carnegie Wave Energy (ASX-CWE).
However, with the exception of special situations and our precious metal willing and able not yet ready to buy stocks, we remain on a buyers strike!

Gold has entered a new trading range.
Depending on your technical time horizon, it is from 1050 (1080) to 1130 (1150), short term and 880 to 1220 intermediate term.
Both Gold and gold stocks are currently over valued. However, that does not mean they will not go much higher, especially since many new buyers have grand wet dreams (2000+).
Also, if one believes markets will continue to hold 10,700, then buying gold and silver sooner, rather than later this Fall, is sensible.
Additionally, there may be new portfolio allocations given to precious metals in 2010.
Silver continues to remain a better value intermediate term, especially if you believe the world’s economy is in recovery mode.

4. Even those of us who think that there are a lot of risks ahead in 2010 think that November and December are likely to be decent months for equities and risk in general."

HW: But if this becomes consensus, then a contrarian investor might disagree and sell.

“To get further rallies from here, we’ll have to see continuation of gradual improvements with respect to growth, business activity and hopefully a continuing slowdown in the pace of layoffs.”

Christopher Sullivan, chief investment officer, United Nations Federal Credit Union

6. READER: I would just like to ask your opinion on ASTM at present price of around 30c do you think this is a good entry point?
HW: Price wise yes; Time wise now or next month. However, even with Right price and Right time, ASTM is a risk 3 microcap.
Buy ASTM only if you like the company. Remember risk 3 stocks can lose money, no matter how cheap. Of course, they can easily double or triple or more as well.

7. READER: Gold?
HW: Intermediate term a buy. Short term, it can as easily drop a $100 as go up a $100.

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