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1. INVESTOR INTELLIGENCE
2. PRECIOUS METALS
3. TRADING IDEAS
4. REBECCA NOLAN
5. LETTERS
Last week, I mentioned we have a VALUE-CHALLENGED Market. Proof positive of investor smarts abound - one case in point: Which two closed-end country funds sold at a premium (not a discount) of 122% and 94% last week? The Indonesia (IF) and Jakarta Growth (JGF) funds. Why? Obviously, because "one buys on dips". In these particular cases, after the market/Rupiah improves 100%, you are effectively "even" over time. Smart betting.... ooops... investing.
Last week Reuters reported that Hitachi Construction Machinery Co Ltd aimed to increase parent current profit by more than 250 percent and a better than 400 percent leap in group current profit compared to 1997/98 results. The plan for 2000 is based on a yen rate of 100 to the U.S. dollar, compared to the rate of 138 yen on Wednesday. (My emphasis). Hmmm, are they following my contrarian Yen forecasts?
We may continue Friday's bear market/short squeeze rally next week as the market did not reach 8700, but only 8769 on 6/3 - not taking out the previous 8760 low. I am neutral enough short term to buy from support numbers, but I would prefer to trade short twice as much from resistance or from the end of (over?) extended rallies like Friday.
DJIA: S1 8888 Pivot 9000 R1 9170
YEN: BUY 139 OB
Next time: 1998 UPDATE #3/4 Market Timing
2. Last week's Gold show in New York was, not surprisingly, extremely subdued. My favorite comment was the contrarian: "The fact that attendance is not booming is one indication we are hitting a bottom in gold." Lots of junior mining companies were present. I reaquainted myself with Jan Vandersande, a first class geologist and now president of Mountain Province Mining, MPVIF or V.MPV. If you like diamonds, my instinct tells me this could be a winner. I plan on researching and watching this one. For more information: www.mountainprovince.com or Fax 909-4661409.
According to Carol Mull's Metal Cycles (Fax 317 353 6246), "Silver prices should rise rapidly after June 15 and into early July. This is projected to be one of the bast times of the year silver." Two Classic silver stocks are COEUR D ALENE MINES (CDE) and SunShine Mining. (SSC).
We have just entered into a consulting contract (corporate astrology) with Inspiration Mining Corporation (Alamo, CA - V. IMQ). This COULD be a major play in industrial minerals. We have yet to do our due diligence, but the fact management is using Financial Astrology to assist in Strategic Planning is a MAJOR plus in my book. If you want a head start on what could be a major mining play, contact Frank Mashburn (FMASFSOG@aol.com) 925-735-9300 or Fax 925-735-3954 for an investor package. We will be posting relevant astrological data on our web site shortly.
3. TRADING IDEAS: CPQ: INTEL, MOT TMX
COMPAQ: CPQ - Target: Under 25
INTEL: INTC - P1 Buy Target: 58-60
MOTROLA: MOT - P1 Buy Target: 50-52
TELEMEX: TMX - Target: Under 45
4. We are very pleased to announce that Rebecca Nolan will shortly be posting her new monthly internet column FINANCIAL ASTROLOGY: World Economic and Political Forecasts. You may also now subscribe to her quarterly hard copy newsletter through the AFund site, $395 annual (sample issue is $99.) Her newsletter specializes in quarterly trends (intermediate term forecasts) in the world's stock market indices, currencies and commodities. Forecasts, trends and turning points shown in her charts are based on the mathematical calculation and interpretation of planetary positions and correspondences.
5. Q: Your June 1 e-mail states that Dow 8700 is your target. What happens after - Dow 10000 or Dow 8000 first? It would seem to me that the current condition of the market is fragile to say the least & would point to the area below 8700.I have seen quotations for Dow 8450. Today I've read that there could very well be a crack in the DJIA in about a week or so 's time. Do you agree with the above?
A: The Question is DJIA 9200 or 8000 first? For traders, there is better risk/reward on the downside, while for investors, caution and some cash is obviously prudent. However, there is still a lot of mindless buying, and a short bear market rally is possible in June. So it depends on your portfolio and time horizon. Certainly 8450 is an important intermediate term support target along with 8000.
What I find so troublesome at the present time is that the combination of astrological signs and technical indicators cannot be more precise than "it's time to raise cash!". Well, you have been trumpeting this loudly for some time now, but March and April passed without much of a correction and now May has passed as well.
HW: Don't understand your complaint. We give lots of profitable trading ideas, while our investments continue to outperform. You prefer panic investing? I prefer intelligent investing advice: "continue to raise cash."
Q: Cadbury is saying that the near term looks bad for the market. Others who I follow think that the greatest periods of risk for the market (in terms of a serious correction ) are late July and then again in October/November. Chris Carolan whose work is heavily based on lunar cycles thinks late July is a top for the U.S. market and that the market will be moving up until then; while Terry Laundry whose work is based more on technical indicators, thinks that the market will tank in the late Fall.
Is your present position based on a technical evaluation that the market is overvalued, therefore, external events could easily throw it into a tailspin, or that astrological signs show this whole period to be unstable for the market because investors are getting nervous for reasons other than market fundamentals?
HW: Both.
One of the comments referred to the week of July 20th as a turning point based on changes in angular momentum of the Sun. Of course this is a reference to Landscheidt's work. What makes it more interesting is that Princeton Economic's big turning point of their Economic Confidence Model is exactly July 20. This is why I have loaded up on July gold puts, among other reasons.
HW: While Gold could keep getting lower, we are on opposite sides of this particular trade. Note: longer term, the $US gets weaker (i.e. Gold stronger) the further out we look.
Q: Do you feel that this market has some near term upside for the next few days or will the market fizzle Monday or Tuesday? The astrology looks interesting next week.
A: Not exactly sure. Friday, we had much of the upside I was looking for next week. We are hedging mostly, buying strong stocks and selling week ones next week. I recommended a closing OEX put Friday, but I will run away Monday morning if "the trend is not my friend" then.
I enjoy your web site and just wanted to say thanks for the short call on Hewlett Packard. Speaking of shorts, have you looked at Avon? Saturn will transit Avon's Sun, and looks like the three eclipses later this summer will hit Avon's Moon, Saturn, and Pluto. Maybe "buy and holders" will be buying more aspirin and less cosmetics.
HW: I have no shortage of short ideas. However, from what you say, Avon's may be worth looking into as well.
We may get down to 8700 or so on the DOW. 8700 or 8900 or 8300, who cares---if we're going to 10K by July. My entry on the long side doesn't have to nail the bottom of this move. I'm confident we're going much higher before a bear market begins...... I firmly believe THE TOP of this Bull market will take place later this summer....
HW: If the market did not top in April, you may be right, but at the moment that is not my view. We do agree about shorting in late July and August.
MOTOROLA says Q2 earnings TO BE WELL BELOW STREET VIEWS....
HW: Yes but there are firing lots of people. Wall Street LOVES that, but if we did buy too soon, we will buy again. Most important is that it has a good horoscope - it is our June stock of the month, and if it is still down next month, maybe our July pick as well!
RE: " IHI stock is moving! Get your wine cellars ready -- $6 before year end?" You haven't been right on this stock yet!! Lets hope this is the first time!
HW: I would say the market to date has been wrong, not me. :) Remember VSE stocks act like non-expiring options. They have no time decay, and as long as they come to papa, albeit, later than they "should", we are happy.
Hope that you are right on IHI, else you might want to consider hiding in your wine cellar. If it does go up, I've got the bubbly to send your way!
HW: Yes, keep the champagne on ice please! No need to hide, too many winners. In fact, I would also buy your company's stock (Sun - SUNW) if it were not so expensive, (currently a hold in our view).
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Author: INVESTING BY THE STARS McGraw Hill, TRADING BY THE STARS (99)
May 15, 1998 Sixth Annual Astrology & Stock Market Conference NYC