1. ASTRODATES
2. OCTOBER MARKETS
3 STOCKS
4. WHEN TO SELL
5. QUOTES
6. LETTERS
1. ASTRODATES
10/9 New Moon 7:34a
10/11 Jupiter Square Neptune
10/13 Neptune SD
10/23 Sun enters Scorpio 4:53p and Uranus SD
10/24 Full Moon 5:02pm
2. TAKE THE MONEY AND RUN.
Next week we have conflicting influences: October 5 FOMC Watch and
end of the quarter window dressing. We recommend approximately 50% cash
allocation for October. The big boys want to see the market hold
around 9500, a normal 15% pullback after 3 interest rate increases.
That is, IF all goes according to their plan. Once 10,000 is SOLIDLY broken,
I believe the buy and hold "long term" investors will begin to get cold
feet and approach the 9181 level relatively quickly.
I read that the U.S. international trade deficit in goods and services unexpectedly widened in July to a new high. I guess not enough key government officials are reading Wall Street, Next Week. Any how, October is yet one more opportunity to further diversify OUT of US Dollar assets. Something smart global money managers ARE doing at an increasing rate. Owning Gold shares intermediate term is one easy way for the average US investor to do this.
KEY DATES: October 5
DJIA:
10,000 testing
3. We are considering mild accumulation in some conservative portfolios and IRAs. A number of former stock of the month club picks are looking very tempting such as Covance (CVD) our one BIG "ouchie" this year, Ha-Lo (HMK) and Sunoco (Sun).
We are probably not going to have a September stock of the month club pick. I am not sure any of our picks will give us more than 15% in 12 months. However, on pullback, we do like Vivendi (VVDIY), and a number of "death" stocks such as Carriage Services, (CSV), HB (HILLENBRAND INDUSTRIES), and even bankrupt LWN (LOEWEN GROUP). As we have stated before, we do plan to buy Reit's after the next interest rate hike (October 5).
Despite falling from Springs highs (to be seen again in 2002 or 2008?), insane greed continues to rule the day for Internet stocks. Between now and November's Saturn square Uranus, stocks such as Yahoo should retreat far more than 25%. 50%+ would be no surprise before year end. However, there are a number of Internet stocks we may BUY on weakness. These include Verio (VRIO) , Star Media (STRM), the Dutch Equant (ENT) and of course our Canadian favorite: Stox.com (V.URL).
4. Even if you are a "long term investor", read HOW TO KNOW WHEN TO SELL A STOCK.
5. "It's the weakening in the dollar, the disaster in Taiwan,
it's Apple Computer, it's a record trade deficit. It's a lot of things,"
said Peter Coolidge, senior equity trader at Brean Murray & Co. "It's
just uncertainty and not knowing the situation that has the market jittery."
HW: The situation looks more and more certain to me! The trend
is down!
"In fact, a big number of stocks are below the highs made in the rip-roaring
days of the 1997 and 1998 bull market. The overall market has been in a
bear market since April 1998. Yes, that is right -- 1998," said Don Hays,
chief investment strategist for Wheat First Union in Richmond, Va.
HW: Funny that is when we told money managers to start exiting BIG
time.
"I would see a further Nikkei correction as a buying opportunity.''
Goldman Sachs strategist Kathy Matsui
HW: To 17,000? to 16,000? to 12,222?
6. READER: I agree with your pessimism about markets. It is only the
beginning and we have for months to BE frightened...
HW: It is the ONLY sane and logical response.
READER: I saw in your last "week" report that you stated the closer
we get to May 2000, the closer we get to the valuations that are reflective
of value. Have you backed away from your sense that a large correction,
20%ish, is going to happen between now and the end of 1999? It just seem
the sentiment is so bullish now everything is construed as glass half full.
Frankly, looking at the core numbers exclusively makes sense if food and
energy are so volatile. But they are not presently...... now they are just
going up.
HW: No, we are of the same opinion. For a while, we thought we
might have to wait until next year for our 7001.67 number, but it is beginning
to look like this major forecast is not being delayed. Stay tuned.
READER: I put about 1/3 of my relatively small portfolio into
CVD the day before it lost about a third. Since then it has been
slowly dropping. What is your 'gut' feeling on holding it through
the rest of the year, if necessary, anticipating a comeback? I am
in for short-term profits.
HW: We are looking to add to it intermediate term as we think the reaction
was far overdone. I advise a trailing stop. By the way, try
to divide your trading portfolio ideally into 10, but at least 5 units.
1/3 is far too much for any ONE holding.
READER: Will IHI just pull out Excalibur and over come all the obstacles
you foresee?
HW: It is astrologically fully capable of doing so, especially when
the Bermuda Horoscope becomes dominant. I still find the risk/reward
and probability of this speculative investment outstanding.
Reg Odgen of Canaccord came up with an interesting response for long
time IHI investors: When clients tell they have been waiting for
4 years for the stock to move up, he says: "Why go to the Olympics and
stop at the National Anthem?"
See our latest report on our web site under the IHI
Story, Part X
READER: Now that CVD has lost half of the value then when you
recommend it, do you still hold your 'buy' rating? How about SSS?
HW: We are holding and/ or average down depending on the portfolio.
SSS we continue to like, a definite hold and may buy after October 5, if
the FED raises rates and the stock goes down more.
READER: I recently bought some STOX.COM and I was wondering what
your latest thoughts are about the company since your recent trip to Canada.
HW: They are one of our very few favorite Internet plays. Stock wise,
even being on Vancouver, we expect more than a double before year end.
Astrologically it will be challenge for a month, then very positive in
November/December.
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