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1. SUMMER SOLSTICE
2. 1998 UPDATE #4/4 MARKET TIMING
3. TRADING IDEAS
4. CRAWFORD PERSPECTIVES
5. LETTERS
THE WEEK THAT WAS: Goldman Sachs, Japan This week's Goldman Sachs story or the Traveler's Citibank merger - your choice for signally the end of the bull market means that it's over, folks. Despite a possible summer (bear market rally) the US market is living on borrowed time. The US Trade deficit will continue to increase and so will the attractiveness of GOLD, eventually causing a declining US Dollar.
6/16/98: New York Times article FOR SELLERS TO JAPANESE WORSE AHEAD unknowingly reported on another fall out effect of this year's Saturn-Neptune aspect: We have long warned our institutional clients to AVOID many high end luxury good retailers such as Gucci, who has Japan as its largest market and LVMH.
NEXT WEEK: Three forces are at work:
1) The beginning of a new market cycle [Summer Solstice].
2) Second Qtr close: money managers whose bonuses are tied to market performance will pour their remaining pennies into the market. This money flow will give it a short term upward bias.
3) Japan - with rumors of major bankruptcies pending and the Yen slightly OVER fair value (AFUND numbers) - giving a medium probability (astrologically confirmed) high risk downward bias there and an initial "flight to quality" here.
The question is whether we see 9000 before 8000 before July 20. We proposed a light weekend position of one unit long US (SPU 1110) to DJIA 8800-8888 and one unit short Nikkei. We expect to issue WSNW Alert 30 for a move down circa June 25. Our current bias is 2-1 towards selective shorting e.g. we plan on shorting MO and TMX and buying MOT. We believe next week is likely to be a contrary move to the following 3 weeks.
KEY DATES June 22/23, June 25
DJIA: 8400-8888
2. Traders believe "Making money in the market is all about Timing".
Since 1997 and before, two big cosmic markers have dominated the stock market:
(1) The first planetary theme was Jupiter/Neptune, or what Alan Greenspan named "irrational exuberance".
(2) The second planetary theme has been Jupiter/Uranus, or "instant riches".
As we approach May 2000, the new planetary theme will be Jupiter/Saturn. This major pairing of the two planets will reward Value as much as Growth, and markets will show more traditional common sense valuations.
Over the next two years, real assets will begin to outperform financial assets. I believe $100,000 invested in Real Estate today will be worth more than $100,000 invested in the stock market. Basic industries such as Construction, Real Estate and Consumer stocks, or even Insurance and Education, will be favored. Think in terms of tangibles. If you are a very aggressive investor and have high risk tolerance, some commodities, along with stocks, bonds and cash may be appropriate.
The upcoming Summer cosmic markers are the Saturn/Neptune Square on June 25 and a pair of eclipses this summer: Lunar Eclipse August 7 and Solar Eclipse August 21. Saturn (rock) - Neptune (cloud) suggests that some of the high flying bubble stocks will come down to earth over the next few months. Take or protect your profits with any high risk, i.e. "value-challenged" stocks. Remember, the 1989 Saturn/Neptune Conjunction timed the end of the Real Estate boom of the 1980’s.
Sophisticated astrological traders are also looking to July 20 as a possible turning point due to changes in the angular momentum of the Sun. All financial astrologers are carefully watching the August eclipses for possible extreme market volatility.
3. TRADING IDEAS: ASIA, GOLD, HWP, MO, MOT, TMX
Yen Watch (fairly valued at 135 (+/-3%) can be a possible trading short now for appropriate risk/reward plays. Korea e.g KF continues to be the no-brainer if you wish to participate in any Asia rallies. Japan is of less interest to us intermediate term, as the best trading action moves west to Hong Kong and China in July.
The European central bank announcement that it will not hold more than 15% in gold reserves was a classic contrarian Buy signal. Continued positive astrological aspects suggest a 310-317 probable test.
LONG Term shorts of HWP are being rewarded nicely and won't be covered above 50. AOL and AMZN are on watch.
We suggested shorting MO at 40 against the rally of the failure of the US Senate tobacco bill. However more BAD news coming this July, so we like July or September 40 MO puts.
Motorola continues to remain undervalued. It is amazing to find ANY undervalued stocks in today's market and we recommend buying MOT or using it as a long hedge with a July Telemex short.
4. June Crawford Perspectives [Fax (520) 577-1110] "We remain 100% short....The June 24-25 period seems more damaging and more scary. We will cover shorts on June 26+/- one trading hour (that includes the close of June 25 to the open Monday June 29....We expect Gold, Oil and the CRB Index to make important lows at this time and top on July 23!"
5. [Re: Japan] Once again, the astrologer has seen something the mainstream has not. Consider this a forest for the trees blunder.
A: Remember the Astrologers Fund Rule #1: The misteak that most fundamental and technical analysts make today is NOT to realize that both companies and stocks have horoscopes i.e. to chart price/time from their incorporation and first trade dates. This rule also applies to countries and currencies.
Q: Is this the kind of thing you have been waiting for? Ref: June 17, 1998 - IHI Joint Venture announcement - Georgia, USA.
HW: Yes. We believe this is just one of several US deals that may close over the next few weeks. While it has take MUCH MUCH longer than we expected, IHI stock under $1 is a steal. If you have done your due diligence and like the company 1/10 as much as we do, we continue to recommend IHI, International Hi-Tech Industries, as a STRONG BUY.
From Carol Mull [Fax (317) 353-6246]: recently in WSNW you mentioned that in my Metal cycles newsletter, I said that Silver would go up June 15 and into early July. The June 15 date worked doubt to the day as the beginning date for a silver upturn. You might want to mention that.
HW: Just did! As you know good financial astrologers are right much more often than wrong, but that is hardly seems news. Now if meteorologists could do it.... :)
It seems like the[HK] rally comes early. Did you do some trading buy before it occurred? Not sure whether 7350 on Tuesday is the bottom or not. Maybe that's NOT it. Considerable risk still exists. I would certainly not buy stocks at this level. Rather be patient for opportunity occur. :)
HW: No, we didn't even though it hit our numbers perfectly. Our big play was the YEN this past week. While bullish on Hong Kong for July, I would NOT buy at more than 8000 and not until next week - a retest of 7500 OB would be IDEAL. Sometimes we do miss them. Of course Clinton in China this week portends.....
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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