1. FALL MARKETS
2. DOW 36,000
3. SRI INVESTING
4. QUOTES
5. LETTER
On Wall Street, the pendulum of investor sentiment swings from greed to fear and back. But instead of being measured in months and years, the swings today are measured in days and weeks. 9/9/99's tech rally is a minor sample of what COULD happen, should Y2K not strike. However, that is far in the future, in the next millennium.
Will our forecast for a declining market be gentle like falling leaves or abrupt panic like a Meteor falling to earth? Will our 7001.67 trading target be seen by January 1, 2000 as originally forecast, or delayed? In order to be "on time", we need 10,000 to be an established ceiling as 11,000 is becoming. Ideally no later than circa 9/28, which is a Bradley high and also the time of 3rd Quarter window dressing. Once the Fed raises rates, either in October (our bet) or November, it "guarantees" a 15%+ broad market correction to 9500 or below. But then I said that with my forecast of oil reaching $22, and it is now $24+. As an aside, the price of Oil is another good reason to exit/short Japan and the Yen. Finally, don't forget that Clinton's 1999 Solar Return promises he will get what he deserves this year.
October scare time follows. November is likely to bring a good 2000 point, Y2K run to the exits. Will it happen? Only God knows for sure. It is the way to bet? YOU BETCHA!
KEY DATES: September 23, 28
DJIA:
10,750 Support/10,800 ResistanceTesting
JAPAN/YEN: SELL
2. "I was an extremely unlikely candidate to write a book with
a sensational title like "Dow 36,000" - a book that argues that "stock
prices could immediately double, triple, or even quadruple and still not
be expensive." Read Dow
36,000: The Case for a New Stock Market Model by James K. Glassman,
Washington Post.
HW: Read and Weep.
3. Since we believe most portfolios are going NOWHERE from Summer 99 to Summer 2000, why not start thinking about doing some good with your money? Begin to visit regularly our silver premium posts on SRI INVESTING, aligning your pocket book with the Cosmos.
4. "You need to prepare not for 200 point down days, but 2000 point
down months. In my own investing, I have taken my portfolio and diversified."
Jeff Seely
HW: Agreed, November IS coming soon!
"The Federal Reserve is unlikely to raise interest rates when it has
its next monetary policy meeting on Oct. 5....With inflation at its lowest
level in 33 years and world financial markets uneasy about possible year-end
computer glitches, Federal Reserve policy makers appear likely to leave
interest rates unchanged when they meet early next month." John Berry Washington
Post
HW: John, when it the last time you went to a gas station, ate out
or bought a house? 1966?
5. READER: Do you think that the public's fear over possible year 2000
problems will significantly affect the stock market?
HW: Absolutely. A one-two punch coming right after the annual October
scare. For a detailed view of the astrology of Y2K, please visit
our web site post 2000
Horoscope.
READER: If I short the Dow MOC, how do I place a stop to protect me
from crazy openings like today-9/3? 2ndly, if I bought the Dow this
morning would I have gotten the opening price or would I have gotten filled
over 11000?
HW: You cannot fully protect yourself from openings like Friday, September
3rd. You can greatly reduce the risk by not shorting ahead of a major
news day as that was.
Second, you will not get the opening price as there can be considerable
slippage on a wild day.
READER: I have been getting this burning desire to ask you why you might
feel everything looks so hunky dorey on Wall Street these days? Are
you still holding quick to your prediction of 7001.67? Some say that
if I were to stay in (rather than leave it in money market) I will do better,
even if things do bottom out. I'm not so sure that is true.... My
boss says that he feels there are enough 401K plans out there that will
keep the market afloat.
HW: Things do not look OK to me, but rather like the last desperate
hours. I would have lots of cash: up to 50%. And the stocks
I would continue to hold would have some real value.
READER: Why when Tuesday is a red marked day, is your risk showing as
medium to high? I am thinking of shorting before [US] tonight having made
use of Friday's run up and then hopefully taking profits the next day but
I am a little unsure why the risk is showing at what you have it at. I
thought with your system showing what it does for Tuesday it would be medium
low and change to high later in week.
HW: Risk is calculated separately. While the probability of a
correction is high on Tuesday, should the market not correct into Tuesday,
given Friday's move, we could have an attempt to break all time highs (short
squeeze) next week.
However, should the market retrace at least 1/3 as expected, then the
risk will be reduced to medium on Wednesday.
READER: Is CVD a buy at its current price or is this one of your very
rare mistakes?
HW: If you don't own it, I believe CVD is a very good value buy.
Given its recent trading history, however, I would use a 1 1/2 point trailing
stop.
READER: Did you hear any news from the folks in Florida about the progress
of their project while you were at the AGM in Vancouver?
HW: 1) Land secured in Orlando area and 2) Hurricane Floyd is a great
marketing tool :)
READER: How does one know when you are finished with the latest
alert? Or is it continuous? If one is short and gets stopped out (money
management or whatever), should one be short again if the market touches
the figure in your alert? For the less fortunate - assume working with
only one contract.
HW: That is a good question and generally the answer is yes.
However, our system is designed for working with 3 units, which we find
far more profitable than one unit. When to take profits or losses is covered
in our Daily Market Commentary. It is very difficult to make money trading
over the long term if undercapitalized. Even with two units, you
should be able to do much better. Alternately, you can just wait
for a reissue of a new WSNW alert and trade less often. Also you should
intersect our work with another pricing system such as Cadbury as a double
screening process.
READER: The problem with shorting this market I have come to realize
is it is betting against the greed of ten of millions of people. That is
an amazing force to move against. It seems to me only a major unseen event
can truly shake this market. And betting on that is really wishful thinking
HW: Y2K, interest rates increases, Saturn/Uranus, all of this
can be foreseen. However, there is no question there are a lot of crazy
and greedy people out there. I am more concerned with the "innocent
victims" who could lose a large portion of their life savings.
READER: Any news about the IHI stockholders meeting?
HW: Batch plant ordered and should be in production January.
If you are not on their list, contact investor
relations.
READER: Being so far away I need reassurance re IHI. What baffles
me is last time in May - well you know the price just ran up and I thought
this time we would see at least a 50% rise this week - something doesn't
make sense.
HW: In February, IHI had 250,000 visitors at the BC show. This
was a GM and 400 person shareholder factory party. I did expect
more as an important announcement was made. If you saw the factory progress,
you would be somewhat reassured, although remain impatient as we all are.
As one investor banker who has been with IHI since the beginning said "It
is almost here, and as to the stock-the sky is the limit." Most people
close to the company think the same thing.
READER: Last year we saw a tremendous amt. of sales over the Internet
for the holidays. Of course, one of the snags was delivery of products.
When the market takes a dive in Oct as speculated, I would like to have
explored and be prepared to invest in delivery companies, specifically
FedEx, UPS and some smaller, newer company. please advise.
HW: Transportation stocks will also be negatively affected by
higher oil prices. UPS stock will be the hottest IPO and likely double
or triple the first hour. Getting UPS stock BEFORE it trades is nearly
impossible. After it starts trading, it may be overpriced.
Buying UPS, FedEx and other companies depends on the price and whether
you like to trade story stocks. If you have a good history of such
things, no reason not to try again.
As to other Christmas plays such as retail, traditionally they often
work, but not so sure this year, especially factoring in potential Y2K
hoarding.
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Letters.
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