Wall Street Next Week, January 4, 2010

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

That is our working hypothesis. The alternate scenario is US markets up Q1 2010, then DOWN heavily Q2 2010.
For that latter to be true, most believe it would require a continuing drop in the unemployment rate, strong corporate profit gains and stable borrowing costs. This is something that few analysts are forecasting. Then we expect the sharp reality of April's meager personal and corporate tax receipts. Hence we remain largely sidelined investors between now and

ASTRODATES
1/13 Saturn SR
1/15 New Moon 2.11 am ET and Mercury SD
1/19 Sun enters Aquarius 11.29 pm ET
1/30 Full Moon 1.18 am ET
1/31 Saturn Square Pluto

TRADERS: As per post XMAS markets, we generally prefer the short side of trading.

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 1775 SPX 898
LONG/SHORT PORTFOLIO: L1/S2

KEY DATES:    JANUARY 13, 15
DJIA:                10500 PIVOT
SPX:                1111 PIVOT
NASDAQ:         2250 PIVOT
XAU:                170 PIVOT 160 SUPPORT
FEB GOLD       1120 PIVOT R1 1080 R2 1060 R3 1006
MAR SILVER:   17 PIVOT 16.25 SUPPORT 18 RESISTANCE
XOI:                  1060 PIVOT
FEB OIL:           76/78 PIVOTS 70 SUPPORT 82 RESISTANCE
US$                  77 PIVOT 79.50 RESISTANCE

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.

2009 CLOSE:          DJIA 10428, SPX 1115 & NASDAQ 2269
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:                       6 ~ FV 1 UV; 6 offer 4%+ Dividends 2 offer 5%+ Dividends.
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK.

2. We have bids in for a few select small/microcaps for a possible January effect, but overall still prefer the short side of the market (risk/reward).
By and large however, we are still standing aside from most market activity.

3. We are still hoping to buy Gold and Silver at or below Fair Value ($1006/$15 respectively) and not over priced as currently.
However, should Oil strongly break out above $80 and reach $91, then Gold is likely to return to $1200 sooner rather than later.

4. “Those who benefited in the decade were short-term investors who were able to take advantage of the volatility in the stock market. That isn’t the signal authorities should give players in the market. You want them to think of it as a place where you can save for your retirement.”
Komal Sri-Kumar, chief global strategist, TCW Group
HW: Sad, but still true.

“We are really starting to see the mechanisms for a sustained recovery come into place. We are starting to see investment numbers come back.”
Robert Dye, senior economist, PNC Financial Services Group
HW: Really now?

“It’s been a decade of delusion. In many ways, we’re worse off than the 1930s, we’ve created problems of moral hazard and we’re faced with an astounding public debt.”
Richard Tedlow, professor of business administration, Harvard Business School
HW: I would say there has been more than one decade of delusion. Hopefully by 2017-2018, we can look forward to better times ahead.

6. READER: ^DJIA : Technically short term it looks we are heading towards 11000 in January 2010 if 10360 holds for fifteen consecutive trading sessions. This has not happened since October 2009 till date. Failing which ^DJIA will re-test 9500 and then 9000 in Q1 2010.
HW: We may or may not.

READER: Are you buying gold futures? or do you consider to buy them?
HW: Not yet. Gold over $1006 is overpriced.
READER: Do you think it will go back to 1006?
HW: It could break 1000 or not. My 2010 range is 900 to 1240.
However, when you decide to buy, I prefer silver and GDXJ (for gold).
Ideally, I would like to see Silver under 16.50 and closer to 15.

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