Wall Street Next Week, November 23, 2009

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

We are watching our small and microcaps stocks and have slowly begun some modest buying.

Gold is still within the 1080 to 1150 trading range: After its next trading range of 1020 to 1220 is a potentially surprising, extremely wide intermediate term trading range of 880 to 1220/1480!
Short term gold and silver can benefit from positive astro. However, I suspect much of this is already factored into current pricing. As gold funds have performed well this year, they will receive new funding. Additionally, new natural resource funds will also be marketing heavily early 2010. These are obviously positive factors short to medium term.
It is unknown whether gold and silver stocks will drop with the general market next year. We believe pm stocks will act choppy. However, should markets hold steady and/or rally, precious metals should out perform.

TRADERS: Short Thanksgiving Holiday week. Early in the week, the short side has the better R/R.

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 8775 NAS 1785 SPX 895

LONG/SHORT PORTFOLIO: L2/S3

KEY DATES:     DECEMBER 1
DJIA:                10000 SUPPORT 10500 RESISTANCE
SPX:                 1100 PIVOT S1 1080 S2 1070 S3 1040
NASDAQ:         2020 SUPPORT 2200 RESISTANCE
XAU:                 175 SUPPORT 195 RESISTANCE
FEB GOLD        1150 PIVOT
MAR SILVER:   17.25 SUPPORT 19.50 RESISTANCE
XOI:                  1090 PIVOT
JAN OIL:           80 PIVOT S1 79 S2 76 S3 74

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.

We are likely to trade long Silver stocks this week or next. I am hoping for a pullback first, if not we will play momentum into the New Year.

4. "Risk and return go hand in hand, but there's a difference between playing it safe and not playing at all. Too much caution could mean missed opportunities."
Jack Courtney, Assistant Vice President, Advanced Financial Planning Investors Group
HW: True, but a key question is always how much risk is too much?

“The risk right now is not to be in stocks. Economic reports are indicative that the rebound, if not even, will be sustained. However cautious or pessimistic you were, you see that reality is getting ahead of you and that you may be missing out.”
Jose Carlos Diez, chief economist, Intermoney
HW: I think that tomfoolery is best a suckers play

“Just sloshing money around isn’t very imaginative today at these multiples. That’s what the average idiot does. You have to look hard because the market is well picked over.”

HW: And that is true even if you “buy” the US govt/media recovery propaganda.

6. READER: Do you expect another leg down?
HW: Most definitely in H1 2010. There is a 60% chance markets have topped for 2009, although I am not sure how great the downside is in December 2009. We will enter 2010 with plenty of cash.

READER: Crude: You mention a fair value as US $ 58.00 pbbl. I have said a few times in the past that the fair value of Crude is between US $ 60.00 to 75.00 pbbl. I still stick to it. But - for June 2010 my Crude Oil target is US $ 150.00 pbbl. If ^DJIA corrects in Q1 2010 - we have to see to what level Crude Oil corrects? My lower side target from current price levels is US $ 60.00 pbbl during the correction phase.
HW: $60 and $58 is virtually the same. I am talking Fair value. That is NOT the same as trading targets however, just what we calculate to be its worth at a given moment in time.

READER: Gold and silver is going up, up, up. Do you see it coming down soon or should I buy now?
HW: I don’t know how much the positive astro for precious metals is built in. We will do some buying over the next two weeks. However, there is a dangerous possibility of a strong and swift dollar rally to .78 or 82. That would be an ideal buy signal; however, it could mean a substantial short term loss for fresh buying. Hence the need for both a hedging and trading perspective, more than an investing one.

READER: Michael Gibbons: The strongest bearish signal he has ever seen in his system!
HW: From a fundamental viewpoint, hard to see the US market bull case if one is sober.

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