Wall Street, Next Week is our weekly Email/Fax newsletter.
Subscription rates are $300/annual; $99/Quarterly; $500/2 years.
Request subscription details by emailing wsnwsub@afund.com.
Mondays CCI/TRV merger propelled the market to a PERFECT trading short above 9100. However, with far more than $15.8 billion dollars of fresh capital ahead of April 15 (Roth IRA's etc) coupled with too much put buying ahead of the holidays, the DJIA rocketed back to ~ 9000 on DIRECTIONAL day April 9. This suggests a bullish bias remains in the US markets.
Our trading plan is to short the next two Mondays, positionally 9000 OB, and warily watch the next trend following/directional date of April 14th. We believe Motorola's earnings are more a harbinger to things to come than Yahoo's.
NEXT WEEK
April 13 Sun conjunct Saturn and Venus square Pluto, April 14th second directional day of April and April 20th, Sun entering Taurus and Mercury SD
Key Dates: April 13, 14, 20
DJIA: S1 8888 R1 9000 R2 9055 R3 9170
2. SPDRs (Spiders) and DIAMONDs (DIA)
One attractive short term bear strategy is to short the market while keeping long term stock holdings intact. While you lose the upside, you cover downside risk. When very bearish, one can use a 2-1 ratio; use a 1-2 total portfolio when less aggressive. Unlike puts, there is NO time premium lost and this may have an attractive tax consequences.
TECHNOLOGY WATCH: IBM, MOT, SUNW
Pricing: Higher number for growth investors, lower for value players.
IBM: 81
MOTOROLA: MOT 44, 40
SUN: SUNW 34, 28
TECHNOLOGY WATCH: SUN and IBM jointly develop JAVA based OS. expected mid-1998 - Next time Microsoft.
3. Expect the usual Day Trading delight next week with options expiration. For astrological trading ideas in the metals and mining area, read the April and May issues of METAL STOCK CYCLES by Carol Mull, now a regular monthly column on our web site.
4. Just a clarification: Is the April stock of the month Campbell Resources, Inc. (CCH)?
A: I would have preferred not to have any Stock of the Month BUY in April, the Gold sector being a possible exception. In choosing such a cheap NYSE stock, one could at most lose 1/2 a point if wrong. Obviously, we already have a fair amount in natural resources FOR THE LONG HAUL, in contrast to the intermediate term investments philosophy of our Stock of the Month selection. Gold itself has done well so far in April and we posted CCH as our choice.
Q: As you have said US March/April is likely HK July/August. I am wondering whether it is possible to predict the market more precisely by using Astrology? I mean whether you can know the specific date for market tops, or say the week for the market starts to crash?
A: If we are positive about a date like March 11,1997 as a top, past practice was to release it publicly 6 months in advance. However, we did not have a definite enough single date in 1998, although several possible and probable ones have been suggested for trading advantage. Most of our economic forecasts have been right on target, but money flows due to market mania have overwhelmed them to date. In any case, astrology (at least this astrologer) is not perfect and even though I am a Leo, I do sometimes/rarely :) make misteaks....
Q: I recall reading that Rebecca Nolan predicting that the DJIA will suffer a big drop in early 1998. That has not happened yet. Anyone has any comments on Rebecca's forecasts?
A: She will be speaking at our conference May 15th conference and you can subscribe to her newsletter with us. You can also post on our BULLETIN BOARDS for reader feedback!
Q: There are so few bargains right now, but two that I feel are of value and with limited downside are MO and RJR Nabisco. Do you have an opinion of the tobacco sector?
A: Because I am SRI biased, I cannot in good conscience invest in Tobacco stocks despite MO being the ONLY DJIA with a real dividend. As a trader, I don't have that bias, and should Mo split its tobacco divisions from its food companies, its stock price could more than double. Weighing that possibility against the risk of a punitive congress, MO becomes interesting to me only at 35 OB for a quick play to 40. Astrologically, read our discussion of M stocks (MO, MOT, MSFT) in May next issue.
I recently put some of my non-retirement discretionary money in the Barr Rosenberg Market-Neutral fund. A new mutual fund that is always 50% long undervalued stocks and 50% short overvalued stocks. That way I'm following your asset allocation models---at least I think I am.
HW: That type of approach makes perfect sense in an "irrationally exuberant" market. Assuming it is not a high load fund, this sounds like a good idea. Readers who wish to try this approach with industry sectors instead of stocks, may wish to subscribe to the currently free BRS market analyses.
Q: What is Godot?
A: Godot is the head "market meanie" who makes sure that whenever and wherever you place a trading stop, it is taken out JUST BEFORE the market turns the way of your bet. While there are constant floor rumors of his imminent SEC and Nasdaq investigation, he has yet to be cited (sighted) :) He is named after the famous play, Waiting for Godot.
If these markets don't turn after the SO con SA, and Full Moon, I'll be considering another profession. Hope you're having better luck.
HW: We believe in Jupiter (Astrology) for CALCULATING LUCK!! As we employ mostly hedges, we (almost) always are profitable or outperforming. You should include systems theory with your market bets, e.g. US stock markets are more sophisticated than foreign counterparts. "Excessive" pessimism as show by astrology charting can cause extensive put buying which PUSHES UP THE MARKET.
Will I receive an alert when the market turns downward? I feel a big one coming soon. I have not seen the alert tracking or received any email alerts yet. I don't want to miss this one.
HW: Watch our technical numbers and key dates. Fresh shorts above 9000 have a favorable risk/reward this month. Of course, exact timing depends on the specific stock or derivative used. Our latest recommended play was to short on Thursday close, or Monday morning. As to missing the "big one", I ALWAYS have one hand on the trigger. One of my favorite past times is to machine gun short the markets during the trading day from our daily key resistance zones.
Q: Are you expecting a bullish reversal signal for Apr 9th & 14th or a continuation of a bearish outlook for April?
A: If April 14th confirms April 9 as a big up day, we should switch to "guerrilla" trading for the rest of the month.
Nice Call on the Yen (and Bonds).
HW: Thanks, but this is already old news as we suggested covering Friday < 128, our new pivot point. Currently we are avoiding Japanese stocks, but are preparing a midyear buy list to be presented at our sixth annual Astrology and Stock Market seminar May 17 in NYC.
"Can you afford NOT to have financial astrology in YOUR future?"
Please send your comments, questions and suggestions to Letters,
Subscriptions $300 one year; $500 two years; new subscribers 3 month intro $99. ************************************************************************************
Wednesdays, listen to our ABS radio program TRADING BY THE STARS.