1. ECLIPSE DEAD AHEAD!
2. WHAT AND WHEN TO SELL
3. WSNW FORUM
4. QUOTES
5. LETTERS
The 1999 Top is in place. How low is low? 10,500? 10,000?
9000? 8000? 7001.67?
Just next week, we have the August 11 eclipse. It is a BIGGY
- it comes with a Mars-Saturn opposition and Uranus T. Square. In
short it is a precursor to major trouble. The Lunar Eclipse helped
derail the runaway train market, this Solar Eclipse could help clobber
it. Definitely? No? But the smart way to bet? DEFINITELY!
In his Bloomberg column, John Dorfman classifies 5 percent decline as a dip,10 percent a correction, 15 percent a severe correction and 20 percent a bear market. He notes the recent best performing sectors were gold and energy - our two favorites! He recommended buying Hecla (HL), which, if you don't own any gold or silver stocks, I would consider cheap disaster insurance under 2 1/4.
No future deficit? A Budget Surplus? Stop issuing 30 years bonds? Lies, Lies and stupidity. In the next century, this decision of the US Treasury to issue short term debt (unlike corporate treasurers who sell 100 year debt) will be well cursed by US taxpayers. This is a MAJOR sell signal to reduce US dollar exposure to no more than 50% of global portfolios. There may be one last opportunity: a post eclipse dollar rally. If so, take advantage of it and buy Euros and Euro stocks (if you MUST buy stocks). Did anyone mention Holland?
Key Dates August 10/11
DJIA: 9836 August
low?
Yen:
Sell 114-115
2. Is your portfolio strong to enough to withstand ALL 5 1999 bull market
killers?
1. July 1 (Rubin and Mr. Yen resign and US interest rate policy
shifts)
2. July 19 (Saturn/Uranus and Microsoft Warnings)
3. July 28 ( Lunar Eclipse)
4. August 11 (Solar Eclipse)
5. Y 2K
For years the dominant investor questions have been: WHAT TO BUY?
WHEN TO BUY?
Its more than time now to ask: WHAT TO SELL? WHEN TO SELL?
I advise selling when you believe your stocks will no longer give at
least market performance and probably underperformance. That means
the TIME IS NOW for portfolio cleaning.
What to sell depends mostly on sector membership and secondarily on
tax issues.
We recommended selling sectors such as technology and financials. There
are some exceptions e.g. core portfolio 2000 holdings and the beloved M
& A action. I would most definitely sell (and have for my clients)
mutual funds with a high proportion of aggressive growth stocks. However,
let this be food for a discussion with your broker or money manager.
Henry, should I sell AOL? [Price 96]
HW: You should have already sold it!
I will have too much capital gains to pay if I do....
HW: You can hold it to 70, but then why ask me?
I agree with you Henry I will probably sell it. HW:
What did you pay for it?
I have a 130 percent gain on it.
HW: Good - take it and be happy. [Friday AOL close was 84]
3. We have added a dedicated forum board for readers of Wall Street, Next Week. This forum is for the discussion of Financial Astrology, Stock Market Timing, and Global Stock Selection posts in Wall Street, Next Week.
4. ''The downside risk is extremely limited -- we can go down
from here, but not much farther to have to be at or near the bottom,''
said Foster, who expects gold funds to rebound ''when conditions are right
-- whether it's three months or 12 months, I don't know.'' Joseph
Foster, Van Eyck Gold Funds
HW: Yes!
SwiftTrade's Charles Kim says his company makes sure its traders are
prepared to lose it all. ''I tell people: 'Take 25 grand out of your account,
put in on your lawn, saturate it with gasoline, light a match, hold it
over the money and that's where you are when you begin to day trade.' ''If
you can't let go of that match -- don't trade.''
HW: I say: check your horoscope carefully BEFORE you light that match!
5. READER: in your 1999 stock market forecast--"good companies, good
horoscopes" LU is worth buying on serious market dips but not CSCO.
Therefore, after the crash, in terms of long-term investing, would you
say that LU's stock will perform better (or have better growth) than CSCO?
HW: First there may be more than one crash. Second, we recently downgraded
LU from out perform to market perform. I would prefer to buy IBM
on a serious correction to either LU or Cisco.
READER: Re: DJIA 10750-800 one stop, does this mean your thinking the
market may up after Aug. Eclipse before the BIG DIVE later this year?
And how do banking stocks look i.e. BANC ONE for a place to weather the
storm?
HW: Yes there could be lots of buying in front of 10,000. This
is natural if you believe the market will stay up forever. Banking
stocks should be in trouble as interest rates will rise and more people
will go bankrupt. However, if your bank is a take over TARGET (don't
think Banc ONE is such a candidate) that is different as M & A will
continue to rule for some time.
READER: Thanks for all the good information on IHI. Once IHI gets the
financing to pay for factory automation machinery, the machinery will have
to be installed. I am wondering if you can tell me what this "installation"
involves. To what degree have the details of the automation process
been worked out already? Has IHI tested this machinery in its use
for this purpose, with this particular technology? And, most importantly,
how long is it projected to take?
HW: The installation of the Robotics and concrete batching equipment,
etc., involves connections and calibration adjustments. The company informs
me the details of the automation process have been worked out and they
have tested the machinery.
There are different lead times on the equipment once it is placed on
order but the average is 6 months.
READER: Your intermediate target for the Dow was 8888 and year end target
7001. Now you are merely predicting a test of 10,000 in August. When will
the market reach the intermediate target? I presumed the August low would
be around 9000.... Is this all that you expect from the "mother of all
solar eclipses"?
HW: That phrase is NOT mine, but the words of another financial
astrologer. Currently my thinking is 9836. The big test is 10,000.
However that is hardly the last stop, just the key price point at which
investor concern and nervousness may turn into fear and panic. If
you are a trader we give daily market commentary highlighting the ups and
downs of the market. If you are an investor, then 7001.67 is the
number to keep in mind.
READER: I was wondering if Sun Health Care has found a new [exchange]
home. Also, good job on Saturn/Uranus.
HW: SHGE
is currently trading on the non-Nasd OTC.
READER: James U. Blanchard III's Gold Newsletter has published significant
articles highly recommending two gold stocks: Durban Deep (DROOY.Nasdaq)
and Harmony (HGMCY.Nasdaq ADR). What is your opinion on these two stocks?
HW: Currently not interested in South African stocks at this
time. Why take a country/country risk as well as a risk in the gold
market? If and when Gold moves, majors like ABX, NEM and HM will
appreciate significantly enough.
READER: With the upcoming solar eclipse on August 11, there has been
more discussion, lately, regarding the correlation between solar eclipses
and stock market crashes. A fascinating study was completed by Steven
Puetz showing that 8 of the 12 greatest stock market crashes in history
from the Holland Tulip Mania in 1637 to the Tokyo crash in 1990 fell within
a time frame of six days before to three days after a full moon (usually
also a lunar eclipse) that occurred within six weeks of a solar eclipse.
The odds of this happening by chance are estimated to be less than one
chance in 127,000 according to Peter Eliades, author of Stock Market Cycles.
HW: Yes the handwriting is on the wall and this week is one of several
possible 1999 dates ahead.
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