Walll Street Next Week, APRIL 05, 2010

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

1. ARE WE THERE YET?

DOW 10,000 before 11,000?

Whether it will be a disappointing earning season, disastrously poor Income Tax receipts, or an external trigger e.g. Greece, China, Iran, etc., we enter our 44 day count down zone next week.

NOTE: Payrolls on the markets' mind after long weekend. As usual with certain US government reports, headlines such as US job gain largest in 3 years are not as good as they look. [See http://www.shadowstats.com for the reasons why.] However, few investors know or care. So we may see 11K early Monday, although it may or may not hold on a closing basis. While some bears including yours truly expect 10K before 12K, I was able to get much better odds for a 10K before 11K bet. :)

Steelmakers agree new iron ore contracts

HW: Even the “see no inflation” Fed wont miss iron ore prices doubling from last year. Expect a “surprise” Interest rate increase coming soon!

TRADERS: Sell circa DJIA 11,000.

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 until 2012 to 2015.

FAIR VALUE: DOW 9000 NAS 1855 SPX 934
LONG/SHORT PORTFOLIO: L2/S3

KEY DATES:    APRIL 6, 13
DJIA:               10700 SUPPORT 11000 RESISTANCE?
SPX:                1180 PIVOT
NASDAQ:         2400 PIVOT S1 2380 S2 2330 S3 2280 2450 RESISTANCE
JUNE GOLD     1120 PIVOT 1140 RESISTANCE
MAY SILVER:   1730 PIVOT R1 17.80 R2 17.88 R3 18
MAY OIL:          S1 84 S2 82 S3 80 85 PIVOT/RESISTANCE
JUNE BOND     116 ½ PIVOT S1 114 5/8 S2 114 S3 112
US$                  80.50 PIVOT 79.50 SUPPORT 82.80 RESISTANCE

Market Marker Sentiment begins to change March to June 2010. So Far: Markets begin optimistically but reality sends them back to neutral or slightly positive.
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; 5 offer 4%+ Dividends 2 offer 5%+ Dividends.
US BANK FAILURES TO DATE: 41
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK.

2. “Everyone thought we would see rising rates due to higher inflation, but it appears the bond vigilantes are demanding a higher real rate due to concerns about Treasury issuance.”
George Goncalves, head of fixed income strategy, Nomura Securities
HW: Given US bonds are going lower to 112 intermediate term, why would anyone want to buy unless they HAD to?!

New Iron Ore contracts which will result in about a 1/3 rise in steel prices, is exciting the precious metals and commodity markets with guilt by association.
It doesn’t matter to most investors whether Gold and Silver is over valued. The question I have is as markets correct, will Gold and Silver march in line or decouple? Certainly, they would (and should) rally in concert with any market rallies. My current view is that initially they will drop, and then latter act more independently.

4. “The market is as overvalued now as it was undervalued a year ago. There’s a very high degree of complacency.”
David A. Rosenberg, chief economist and strategist, Gluskin Sheff
HW: Yes, but soon that will change!

"We're coming into the seasonally weak period and that wall of worry is about to become more difficult to keep climbing.”
Jeff Hirsch, editor-in-chief, Stock Trader's Almanac
HW: While it could be different this time, that is not MY bet.

"I think we'll see a pullback sooner rather than later. We could see some selling through the spring and then it picks back up in the summer when the second-quarter earnings are released”

6. Reader: What is the current Market Marker?
HW: March 30 was much of the same. Previously, it was “ Markets begin optimistically but reality returns them back to neutral.”
The New Market Marker (MM) remains “Modest optimism followed by reality (Early rally fails and markets turn negative) followed by mixed trading and markets end up a dash.”
PS April 13 will be the third of four 2010 MM modifications.

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