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

1. JUST A 10% CORRECTION OR MORE - (15%) OR 20% (BEAR MARKET)?

Some bulls are “happy” that we finally have had enough of a drop- 10% or a correction, so they will buy.  They believe markets are oversold, “they are down because of Europe” and they held SPX 1055 key intermediate term support.  Those who are bearish believe we are only “half way there” to a 20% bear market.  Then there are others in between- who  expect to see something closer to 15%.  There are  several possibilities such as markets will drop to 15% and rally to -10% and then drop to -20%.etc.
 

THIS IS A KEY WEEK: JUPITER OPPOSITE SATURN & FRIDAY A NEW MARKET MARKER
We are NOW half way into the major business cycle that began May 28 2000 with Jupiter conjunct Saturn.  It lasts until Dec 21 2020.
Next Friday will be the new market marker for Summer 2010.

Like most traders, I recommend being largely flat over the long holiday weekend.
What should cautious investors do?  I always believe “Buy [Cosmic] Value”.  However, while we were are waiting for a real bottom such as last March, some selective buying of commodity stocks before then is possible.  However, while markets may be up later this June, there remains TOO much risk on both the long and also on short side [Markets can drop strongly or rally strongly.] to do more than nibble or trade. I believe as more investors realize the US economic problems aka see reality, markets will see another leg down.  Thereafter, we would be far more inclined to buy at lower prices more stocks. 

EURO 2: Europe Crisis in Rescue for Greece Bringing Euro to a New Normal of $1.10
At the beginning of last week we wrote: “Our contrarian view is that the Euro is currently trading near Fair Value ~ 123.
From a long term Investing viewpoint, when under 123, we consider the Euro a long term accumulate. Under 118, it is a buy.”
Due to Germany’s  ban on short selling their financial & insurance stocks, we are now revising our view to the FV of the Euro lower to 122 and accumulate under 120.50.
Note: We believe BOTH the European bank lenders as well as the lendees (Greeks) should suffer i.e. take a hair cut. NOT one or the other but BOTH.

GUEST HYDE PARK CORNER: Is austerity the future for the West?

 HW: I would prefer 7^th generation thinking and planning!

PLEASE NOTE: I will be away in the country for the holidays and may skip next week’s WSNW issue depending on the weather! J

KEY DATES:    MAY 24, 27, 28
DJIA:                10,200 PIVOT R1 10,000, R2 9868  R3 9698 R1 10600 R2 10750 R3 10850
SPX:                1055 SUPPORT?
NASDAQ:         S1 2145 S2 1984 S3 1934
AUG GOLD:      1140 SUPPORT?  1200 RESISTANCE?
JULY SILVER:   1750/1800 DUAL PIVOTS 1660 SUPPORT?
JULY OIL:         72 PIVOT 68 SUPPORT?
US$                  74 PIVOT  

Market Marker Sentiment changes next week!
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:                       10 ~ FV 0 UV; 5 offer 4%+ Dividends 2 offer 5%+ Dividends.
US BANK FAILURES TO DATE: 73   
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK.

2.  BUSINESS & BANQUETS
At the 5^th  annual Global Industrial Conference Knight/Houlihan Lokey, we found three companies of personal interest:
Balchem (BCPC) a very conservative diversified Warren Buffet type investment;
Capstone (CPST) which was R/D and now into product development - a likely candidate for a potential long term double and
Mine Safety Appliances (MSA).

While very few blue chips could be considered bargains, a number have reached our initial downside trading targets e.g. Goldman Sachs (GS) at $133.
However, the risk/reward for most, given our view of overall market conditions make this of more interest to traders than investors.

US Bond are major shorts!
As we told one investor, already short from lower levels, from a long term perspective your bet is a “slam dunk.”  However, short to intermediate term, there will be plenty of pain (due to hedging from periodic market corrections). Act accordingly.

3.While some gold and silver stocks are beginning to look attractive, gold and silver is still too expensive from a fundamental viewpoint. I would rather continue to wait.
Oil is somewhat more interesting. Will it hold $68 support or for the first time in a long time reach FV of $58.  I don’t know but we are no longer shorting Oil

4. "No matter how we slice all the chart data, there's no reason for anyone to have any exposure to the long side of the stock market here."
Walter Zimmerman, chief technical analyst, United-ICAP
HW:  Certainly we do not see a highly attractive risk/reward scenario.

"A lot of people who have held throughout the bull market are selling right now. That's why the bulls are viewing this as a big problem."
Jim Bianco, president, Bianco Research
HW:  Could they be anticipating Summer 2010 earnings season?

“Technically speaking we’re very oversold -- really that’s the understatement of the year. I’d rather be buying now than I would three weeks ago.”
Walter Todd, comanager, Greenwood Capital

HW: While that was true Friday, and may be true short term, intermediate term markets have more downside potential.

5. Seven worries for Wall Street, and what's next

Stocks Sinking to Crash Low Signals Worse to Come

Wall St.'s woeful forecasting not getting better

6. READER: I will have to give you a resounding applause for catching the short on the metals, bravo!
HW: Thank you. That is why they pay me the big bucks or should! :)                                        

READER:  Maybe you are right by going "short" on Gold Futures @ US $ 1240.00 to 1250.00 pto levels. I am a buyer at dips in Gold.
US $ 1200.00 pto is a "strong support".
HW: 1200 is “first” support. 1175-1180 is second but 1140 to 1150 is “strong support”.