WALL STREET, NEXT WEEK
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WALL STREET, NEXT WEEK: JANUARY 25, 2010
FINANCIAL ASTROLOGY FOR THE SUCCESSFUL INVESTOR AND TRADER

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

 

1. THE RISK OF RISK 

"Correction time again."
Michael Hartnett, chief global equity strategist, Bank of America-Merrill Lynch
HW: You betcha. We believe it is just a question of how low we go and when before April 15th. 

Even bullish analysts feel a large number of stocks are overvalued, something I heartily concur with. Yet US markets are close to, or just below technical support.  Hence, markets could (weakly) rally early this week or not. However, Ben is doubly highlighted this week, First with his Wednesday FOMC pulpit [President Obama’s state of the union address is the same day] Second Bernanke second term in doubt he will try to prevent markets from falling much further this week.  Nonetheless we will be bearish Friday/Saturday given the potential astrological RED alert. 

Post January, from an intermediate/positional short orientation, we may not see substantial buying/rebuying until a 10% correction from the 2009 Close or 2010 Highs.
2010 Highs   DJIA 10725 SPX 1150 NAS 2320 

2009 Close   DJIA 10428 SPX 1115 NAS 2269

Warning: - post FOMC/State of the Union address into this coming weekend represents substantial (Red Alert) market warnings.
One good bet is that s
afe and defensive investments, as well as liquidity, are likely to be re-emphasized market virtues. 

TRADERS: Intermediate Term top is likely in. By Friday we recommend betting again on the short side. 

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 8900 NAS 1800 SPX 900

LONG/SHORT PORTFOLIO:  L1/S1

 
KEY DATES:    JANUARY 29.30
DJIA:                10200 PIVOT
SPX:                1100 PIVOT 1115 RESISTANCE?
NASDAQ:         2200 PIVOT  2180 SUPPORT?
XAU:                155/164 DUAL PIVOTS
APRIL GOLD     1100 PIVOT 1060 SUPPORT 
MAR SILVER:   17.50 PIVOT 16.50 SUPPORT?

XOI:                  1070 PIVOTS
MAR OIL:          78 PIVOT 74 SUPPORT?
US$                  77.50 PIVOT R1 79 R2 80 R3 82  

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:                       5 ~ FV 1 UV; 4 offer 4%+ Dividends 3 offer 5%+ Dividends.

THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK. 

2. Being a cosmic value investor, it is far too soon for me to consider long term buying of stocks. 

3. Too many bulls sabotaged gold
HW: I thought astro-technicals were primarily responsible!
 

Will gold be undervalued (under $1011) in or by February?  We continue to wait and hope.
Will silver trade at or under $16.50?  While we might do a trading buy there, we continue to wait impatiently with investing buys $15.50, $14.50 and $12.80. 

4. “The surprise is going to be on the upside. Most people are still fighting that this is a rally. Everyone is erring on the side of caution.”
Laszlo Birinyi, Birinyi Associates
HW: I don’t think so. While I am a fan of contrarian investing, sometimes, like now, there are valid reasons to err on the side of caution.”
 

"The numbers show continued bottom-line improvement, but a much slower top-line advance. For the recovery to continue, sales will need to increase."
Howard Silverblatt, senior index analyst, Standard & Poor's
HW: That is what has been, and will continue to be, missing in H1 2010. 

“People are betting on higher levels of volatility in the short term.”
Carl Mason, head of U.S. equity derivatives strategy, BNP Paribas
HW: A reasonable bet.
 

5. Why Stocks May Fall Further 

DO REALLY BAD TIMES LIE AHEAD? 

Portfolio 21’s Top 10 ‘Green’ Companies 

6. READER: Our view on Gold for 2010 is that if it has to test US $ 1500.00 pto latest by December 2010, as predicted - then somewhere during the year in 2010, we expect Gold to tank to levels of US $ 1020.00 to even US $ 960.00 pto. So please make a note of the above for your "trading calls".
HW:  Should Paul Volcker effectively replace Ben or Tim, then a $1000 test of gold will be sooner and not later.

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