Wall Street, Next Week is our weekly Email/Fax newsletter.
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As the market continues to climb the wall of worry and mercilessly squeeze shorts, we have enjoyed many pockets of happiness, mostly notably in the technology sector: Compaq, Intel, IBM etc. We are very comfortable as SELECTIVE bears and hedging (buying strong stocks/markets and selling weak ones).
US markets now require 15 billion dollar monthly inflows to avoid a pyramid style collapse - our forecast is a peak ~ $16B. We cannot overstate, that IF YOUR PORTFOLIO IS FULL OF BULL, at least ROTATE as many professional money managers do. Q1 Window dressing (buying hot stocks and dumping losers) is creating many buying/selling opportunities for both investors and traders. We are focused on three sectors: Energy, Financials, and Technology.
With little more than cash and M & A fueling the market, corporate earnings are now more important than interest rates. US companies will NEED to conserve cash shortly causing a peak in corporate buy backs. Read our economic forecast next issue: The US Stealth Depression.
Of Astrological interest next week is Tuesday's Saturn/Mercury - Real (Saturn) i.e. Bad News (Mercury), and Friday's New Moon with Mercury SR. Fresh trading shorts are suggested in front of both events with tight stops.
KEY DATES: MARCH 24, 27
DJIA: 8222 to 8888
2. THREE INVESTING STYLES:
Buy Low, Sell High - Value
Buy High, Sell Higher - Momentum
Buy Very High and Hold - Insanity.
Throughout April, CASH AND CAUTION are recommended.
Screen Watch: Compaq: CPQ FIRST BUY 18-22.
Note: we recommend protecting CPQ Shorts (initiated at 39) at 24 1/2 and moving the stop down 1 point weekly.
3. SHORTING IDEAS: AMZN, AOL, CMB, HWP
Amazon: AMZN: From now till the cows come home i.e. Borders web site is up!
America Online: AOL: Since AOL's stock split, is there ANY justification for this $20 stock to be selling at $60+? (Classically, stocks run up before and after splitting, thereafter falling. But since everyone knows this, it peaked when AOL split 3/17.
Chase Manhattan Bank: CMB: We don't believe the good news. After splitting, if not sooner, it will go the way of AOL.
Hewlett Packard: HWP- More competition from the new Okidata line. Watch when "profits" are reported in May. Remember HWP is our least favorite DJIA stock and continues to well under perform..
4. THREE RULES OF SELLING (from INVESTING BY THE STARS p. 52):
1. SELL (tight stop) when you no longer would BUY AT THE CURRENT PRICE.
2. SELL IMMEDIATELY if you have good reason to be uncomfortable owning a particular stock .
3. SELL whenever a stock's horoscope indicates serious trouble ahead.
If you are also a trader, ask what else you could do with the money? Will owning it OUTPERFORM similar risk/rewark profile stocks, cash and/or shorts, factoring in any tax consequences of selling?
5. It is our view that until Indonesia undergoes serious political/economic reform, it will remain a problem for the world's financial markets. While we forecast the Rupiah will appreciate to 7500, its bourse can retest its lows. Lukman Clark of FutureWorks offers his financial/astrological analysis on INDONESIA on our site. Gold bugs note: AVOID Freeport-McMoran Copper and Gold (FCX), both for its extensive Indonesia exposure and for being targeted by SRI activists for serious environmental pollution.
6. The market is crazy. It's exactly like the situation of HK as of last summer. So if it corrects or crashes, the depth will be quite deep!! Watch Friday and Monday since March 21 is the Vernal Equinox.
HW: We have long said investing in the US in 1998 is like investing in HK in 1997 - March/April 1998 ~= July/August 1997!
Q: Do you track mutual funds and give advice on buy/sell in your data?
A: No, but if current negotiations remain on track, we will finally offer our own.
Q: What's the meaning of 1000 S/P points?
HW: Henry humor. Last Friday's market intraday move in the future's market was 1000 SPX = 100 point DJIA move.
You have said you plan to take profits after May 4, and then will continue shorting again after a few weeks. Do you expect the market to drop below 6500 before May 4 1998?
A: Possibly; however, that is our summer target, obviously short term. We expect a far lower DJIA than is presently now the case.
I am unable to travel to New York to attend your 6th Annual Forecasting Seminar. Are you planning on making any Tapes available of the conference ?
HW: No. Subscribers to WSNW will be emailed/faxed highlights, later to be posted on our web site. Note: Our 7th conference May 14-16, 1999 will be noteworthy as it is cosponsored by ISBA and definitely worth a special trip.
Do we not usually get the radio broadcast as a subscriber via Email? P.S. Cadbury still looking good on his market direction.
HW: NO. If you have down loaded Real Audio 5.0, click TRADING BY THE STARS or the ABS web site. Alternately, you can down load Microbrowser software (channel 12) and have it pushed to you.
PS Yes, Cadury is hot and highly recommended for OEX option traders.
Much of the resiliency of the current bull market is now due to the market's reaction to what certain leaders are saying, e.g., Warren Buffet, Goldman Sachs, etc. Just as Buffet suckered many into a run up on silver, the market seems to be suckering in all those who believe that they just have to be a part of this market. Could it not be that the lunar eclipse may have triggered a frenzy instead of a panic and that that better describes the current phase? In this case, the Saturn/Neptune aspect you describe for May, or the Lunar Node/Uranus aspect at the end of April may be the taurocidical coup de grace.
HW: Could be.
"Can you afford NOT to have financial astrology in YOUR future?"
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