WALL STREET, NEXT WEEK
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WALL STREET, NEXT WEEK: DECEMBER 7, 2009
 FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

1. INVESTING IN FANTASY MARKETS
Astrologically the next big celestial event is the Jupiter (expansion) Neptune (without limits) conjunction December 21 on the winter solstice.  This, along with the Fed interest rate policy is a primary reasons markets are not far lower.As for market and economic fundamentals, we believe Main Street reality is far apart from Wall Street.  Naturally until XMAS bonus time, there is a good reason for this! 

We plan to be short late December/early January.  It is possible it will be stopped out and we will redo this again March/April.  The other big Trade in H1 2010 is again Silver, as 2010 has a similar astrological signature to 2006 (The year of the Silver ETF).
Until markets correct significantly, one can keep high cash levels and stand aside, trade frequently, or engage in some form of long/short investing. Once the decision is made stop “thinking”.   

BOTTOM LINE: 
We await low risk signals.
If none, we plan to sell markets short by/before January 1 and/or March/April and slowly accumulate Silver on substantial pullbacks. 

TRADERS:  A modest XMAS rally is possible astrologically, but other market signals suggest range bound trading.  I am hard pressed to buy and hold, but prefer to wait out any rallies and/or strategically short them. 

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 8800 NAS 1788 SPX 898
LONG/SHORT PORTFOLIO:  L2/S3

 
KEY DATES:     DECEMBER 10, 11
DJIA:                10300 PIVOT
SPX:                 1112 PIVOT
NASDAQ:         2200 PIVOT
XAU:                 175/185 DUAL PIVOTS
FEB GOLD        950 PIVOT 930 SUPPORT  R1 960  R2 970 R3 990
MAR SILVER:   18.50 PIVOT  S1 18  S2 17.50  S3 17 19.50 RESISTANCE
XOI:                  1075 PIVOT
JAN OIL:           76 PIVOT 74 SUPPORT?  R1 76 R2 78 R3 82
US$                  75 PIVOT     

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 4 offer 5%+ Dividends
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK. 

2. While we still prefer the short side to most stock, commodity and bond markets, we see other mixed indicators suggesting short term trading opportunities over positional trades/investments this month.
Hence we are doing little until markets move closer to our valuation models. 

3. The Recurring Gold 'Bubble' 

Last week, we issued a WSNW Sell midweek circa $1220 on gold which combined our price ($1220 intermediate term gold resistance) and timing (astrology) signals.
Results to date are good- $50 Gold and $1+ Silver profits. 

Potential First Buys:
Silver 17-17.50 OB before December 22
Gold 1080-1130 OB  before December 15 

Note:  We are in no rush to buy, as we may be able to buy far lower. I don’t believe $1000 gold is any more sacred support than $100 oil was last year.
Should oil break $74 and move closer to our fair value target of $59, then gold is also likely to drop and retest $970-$1005.
 

4. “The more sophisticated investors are seeing the opportunity, but retail investors are still scarred. It suggests that the rally still has room to go.”
James Dunigan, chief investment office, wealth management division at PNC Financial Services
HW: I don’t agree.
 
"The [Oil] price is perfect."
Saudi Oil Minister Ali Naimi
HW: Perhaps, but it is likely to be less “perfect”, i.e. below $70 midterm. 

“We've had a big move in a short period of time and it [Gold] was clearly overbought. It was susceptible to a pullback. I don't think this is a surprise.”
Caesar Bryan, manager, GAMCO Gold Fund
HW: We agree. 

5. Gross: Returns will be half what they were 

Understanding the Dollar's Reversal: Who Will Feel the Pain? 

Wealthy Investors Plan to Raise Their Real Estate Holdings 

6. READER: Is it a good time to buy silver & gold stocks?
HW: Today [December 4th] ? I think not - we are trading short. 
We are thinking of December 14-December 21. 

READER: Financial Crash Risk Increasing Exponentially as Derivatives Monster Continues to Grow
“Bottom line: Continue to approach the financial markets with great caution, investing moderately, taking profits out along the way, and retaining a big stash of cash.”
HW: I agree 100% with this advice!

 

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Author: INVESTING BY THE STARS and THE STUDY OF ASTROLOGY
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