1. 10K FLOOR OR CEILING?
2. GOLD
3. QUOTES
4. IHI
5. LETTERS
Negative for the market is July 1, which is almost here.
Positive for the market is the end of the quarter or bonus time for
Money Managers. Also, that Rubin would prefer the market decline to come
after he leaves. It doesn't matter if it declines by either or both of
the twin threats of inflation and deflation. We may well experience
both: some sectors will suffer inflation, while others poor profits and
deflation. In other words, a yucky mess. It is my personal belief
that the Clinton Administration has messed up by fudging the US business
cycle. The end result may be similar to our "victory" of the Serbian war:
none of the original goals were met, more damage was inflicted than if
nothing was done, the lessons of history were ignored and no correct precedent
for the future was established.
With markets expected to cascade down shortly, we will be posting later this month for paid subscribers a number of Summer BUY prices. While they may seem a bit extreme, if you get them be happy. Remember when it seemed extreme for Compaq to be 18-22? Yet it was 20 1/8 Thursday! I am still expecting a lower price before I would buy AND hold. Yahoo hit its first 50% correction target last week, when it broke past 122. How long before 61? Depending on how well 111 holds, not that long! Ditto for Amzn and 100 and 55.
There is nothing wrong with trading technology stocks on either the
long or short side if that is your cup of tea, but if you buy and hold
most technology stocks ahead of Saturn/Uranus, watch out! My advice for
July:
Be scared but act prudently.
The Summer Solstice on June 21 is our next Market Marker day. This gives the "zeitgeist" for the next market period.
KEY DATES: June 21, July 1
DJIA:
10,400 to 10933
BONDS: P1 Buy
6.24%
2. G7 Finance ministers want to sell as much as 10 million ounces of IMF gold to finance debt relief for some of the world's poorest countries. Many heavily indebted countries are gold producers and would lose far more if gold is sold to forgive some debt. See FT 6/18 article by Michael Holman for details.
We still believe June to October is positive for Gold. I am already fully committed. However, if we see $250 an ounce and XAU 50, we will buy more. So far $260 and XAU 60 continues to hold.
3. `"The most important question is still whether there is a way for
central bankers to sell that doesn't destroy the gold market, '' said Kamal
Naqvi, an analyst at Macquarie Bank.
HW: But is this NOT their real intention?
"Home prices in 1999 should also continue to accelerate ahead of inflation
at an annual pace of about 4.5 percent." Fannie Mae chief economist
David Berson.
HW: Given next year's Jupiter/Saturn conjunction, we agree.
4. Reader: I want to convert how does this work?
HW: Until June 30th you can renew/extend a gold subscription at $500
for one year or $1000 for two. Current silver subscribers are credited
at 3/5 extension. But hurry. We are betting the FED is raising interest
rates shortly, so you MUST act by the end of the month to save 50%!
READER: I realize this is a broad question, and the answer could vary
with the individual stock, but do you generally suggest selling penny stocks
like IHITF after a small profit is realized or hold for weeks or months
for possible further appreciation?
HW: It depends why you bought it in the first place, whether as a trade
or a long term investment. In general, penny stocks are trading opportunities
and are treated like "non-expiring options." You exit if a 50% loss and
sell 1/2 or all with double your money profits. There can be exceptions.
IHITF is for me an exception, as I view it as a LONG TERM investment (albeit
high risk). It is done with speculative capital, i.e., money you
can easily afford to lose with the hopes of a big gain. On the other
hand, some readers do trade IHITF and V.IHI successfully. It depends
on why you are buying the stock in the first place.
Another key point is the velocity or speed of the appreciation and whether it is based on facts or speculation. For example, our alternative June Stock of the Month club pick was Loewen (LWN) that we purchased last week. Do we sell 1/2 at 100% profit, or go for the gusto and potential of 300-500%? Or did Friday's close represent danger and we should exit Monday? My current inclination is to sell 1/3 at 300%, but I am awaiting the report of one of our fundamental analysts first. We will act differently in different portfolios, depending on the risk/reward tolerance of each client. The only right answer is individual.
READER: Do you have buy rating on oil stocks now? What is your
opinion on buying energy sector spiders now? Your indications on
IBM and MSFT sir?
HW: No, they will outperform but we will soon be in a crashing market.
Negative on MSFT and IBM as an outperform but in a crashing market.
READER: RE: WNSW ALERT
36 C: I hope so.
HW: HOPE? Hope is the enemy of traders! The R/R IS 3-1 and the
probability is 80%+.
Note: This particular call was good for 200 points, but the next one
36D was stopped out at even or moderate loss depending on your trading
parameters.
READER: About the Phone.com IPO offering at 16, where do you want
us to get in?
HW: This is a play ONLY for daytraders. It was example of a new
Internet IPO that WOULD give more than 100% ROI in one day. I personally
find the stock of PHCM too pricey, but could buy on a serious decline of
50%. However, this is one of the few Internet stocks I would DAY
TRADE from the long side comfortably. Most today are like GOTO which IPOd
on Friday and we would recommended selling, not buying.
Reader: Thanks for reminding us about Nostradamus' 1999 quatrain.
Note that the 7th month reference could either refer to JULY (the 7th month
in the current calendar) or SEPTEMBER (the 7th month in the old Roman calendar).
In French, Nostradamus' words are "Sept mois": 'month seven' or 'seven
month'. Note how this could just as easily refer to Sept-ember as to July.
Good old Nostradamus, always a little vague, even when it seems so clear.
Anyway, it gives a little latitude in interpretation. Which month
does your astrology say will see the more likely "bump"? Before or
after the 2 eclipses?
HW: My astrology says BOTH!
READER: I'm trying to make up my mind whether to renew the current silver
for a year or switch over to the gold trading? Would you e mail me
one of the old gold newsletters so I can evaluate the difference.
HW: The weekly newsletter is the same email/fax.
One difference is:WSNW alerts are emailed to Gold subscribers.
The second is access to the gold channel, especially our daily market
commentary that is most helpful to active traders.
READER: I would like to know what you think of AT&T stock
at this time? Also will the decision in Oregon to appeal by AT&T
will reflect on the stock?
HW: I have not looked at it recently. In general, I have a sell
recommendation on it until July.
READER: I have a message that might interest you. I elaborated
your idea of fallen angels, because I reasoned: between those angels there
can be strong and weak ones. I found out how to make the difference
and tried it out on three stocks belonging to the strong ones in the medical
sector: they all three brought me 100% in three weeks. I observed
the weak ones: they did hardly anything or are even more fallen now. Thank
you for the concept of fallen angels.
HW: It is important to remember some broken stocks deserve to
be broken. This concept is for good companies only that are temporarily
"undervalued." All our screens: 52 week lows, 104 week low, 90% correction,
etc. are JUST ONE SCREEN and should always be combined with other fundamental,
technical and/or astrological factors. The ideal number is two others for
triple screen success.
Can you AFFORD NOT to have FINANCIAL ASTROLOGY in your
future?"
Subscribers please send your comments, questions and suggestions to
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