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.
1. THE WEEK THAT WAS
2. CANADA, HONG KONG, SOUTH AFRICA
3. LETTERS
Had great fun this week travelling through the Adirondack mountains. We return to positions of WSNW 30 ABC, and must decide whether to walk away midweek or sooner if "conventional wisdom" and certain technicians are right, or to hold potentially until up to the Sun enters Leo.
For the first time in a long time, bad news in the market was bad news, re: ATT. So it seems, Price is BEGINNING to matter. If so, can the Internet fantasy be far behind? Remember the South Seas Bubble stock companies were formed with no particular business model. For Internet stocks, it is just "sell your portal to an entertainment company" (the Bigger Fool theory remains triumphant!)
On the net last week, I read "People who say you should never market-time don't remember 1973-74 when the market went down 45%, or In '87 it went down 30%." Still, last month's 20 Billion dollar inflow into mutual funds was a whopper. It may be enough to keep the DJIA above 9000. That is 20% more than the pyramid scheme aka US Stock market required in April. Will that inflow keep up into the Fall? I wouldn't bet on it..... are you? However, we have had to revise our pricing model to include up to $50 billion inflows, corresponding to ~ 15,000 DJIA or $32 billion ~12,000 DJIA. If $20-25 billion monthly continues until the November election, I will be wrong about no 10,000 DJIA before 2000. Conversely, this makes 6500 no longer long term support. And if you believe you will be able to exit cleanly, think again and remember the Dutch Tulip story.
Minutes from the last FOMC meeting had Mr. Jordan concerned that the rapid growth in the money supply was fueling speculative excesses. [M3 is now 10%+]: "In his view, these high growth rates were fueling unsustainably rapid increases of real estate and other asset prices and reports of 'too much cash chasing too few deals' were becoming more frequent." Ultimately, the Fed faced a "choice between smaller increases in interest rates sooner versus larger increases later". I agree, but also due to the growing US deficit - increases will be required to defend the US dollar, looking longer term!
2. Canada: A not so happy birthday this past July 1.
The long anticipated Rand run is finally making South African gold stocks potentially attractive over the intermediate/long term.
We had forecast a rally in Hong Kong due to a minor devaluation of 6-8% in the Hong Kong dollar. Instead, we had a rally due to lowering of interest rates and in preparation of Clinton's China visit. How long will this last? Past July 20? Rubin may have succeeded in helping to push a devaluation past November. But at what cost? This could mean that China will HAVE to devalue 15-20% thereafter.
3. Seems that Crawford was covering on the 26th +/- an hour...which would have had him flat on his shorts, perhaps not long but definitely not short, by the open on Monday the 29th. So, if he was influencing your 'early' timing & he has covered... is it your original timing thought to reassess after the 4th or merely wishful thinking on your part?
HW: I was referring to the fact that I had planned only the first entry early in the week, and the other two Friday and Monday or midweek after. The severity of his call "spooked" me, not its timing. I simply mentioned that once again, it was not personally profitable for me to listen.
I visited your home page and found an WSNW alert 07-01. There however was no text, it did not come up. As a subscriber I really am eager to your comments in this treachery market days. So if there is an alert for today, please send it to me.
HW: This is a continuation of WSNW 30ABC. I am experimenting with the idea of a daily commentary on our alerts until we close them out. I corrected the web error, and it will now appear on your browser.
Hi Henry~Just a reminder that the DJIA did trade >9000 today, July 01st, 1998 :=].] This "current phase" of the Bull Market will carry into late-August|September 1998 with DJIA >10,000 or >11,000 very probable.
HW: I was on vacation upstate, so it doesn't count unless >9000 July 06 close - i.e. If a tree falls in a forest and no one hears it.... :) Monday will decide if you are right about this rally. If the DJIA rallies 200 points as you think possible, I will be out midway and take another vacation. Seriously, your work does NOT seem to take account the August eclipses!!!
"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. ************************************************************************************
(c) 1998 All rights reserved. The Astrologers Fund "Always a Stellar Performance"
wsnw@Afund.com 212/949-7211 Fax 212/949-7274 350 Lexington Avenue, 4th Floor New York, N.Y. 10016-0909
Author: INVESTING BY THE STARS McGraw Hill, TRADING BY THE STARS (99)
May 15, 1998 Sixth Annual Astrology & Stock Market Conference NYC