1. MARKETS
2. QUOTES
3. OIL, GOLD and IHI
4. WSNW SUBSCRIBER NOTES
5. LETTERS
The stock market has advanced about 50% since its first 1000 point correction. Will it regain 11,000 first, or simply return to 10,000? Either way our bet is an October close at 10,000 or below. The question then remains whether it will be a soft landing to 9500 (the big boys target) or below. We will be discussing that in a latter issue.
It is painfully clear that any disappointment in earnings forecasts
this month will be severely punished.
This is because we are entering a bear market phase in which even neutral
news is viewed as a cup half empty instead of half full. Hence the
market declines of Alcoa, Xerox and.... your stocks next? Why?
Because stock valuations are OUT OF THIS WORLD. If you are into value,
you SHOULD be afraid. While it is possible nothing "bad" will happen,
the odds are increasing every day that it will. Unless you are confident
your stock will beat forecasts, watch out!
This is options expiration's week. Our KEY DATE is Tuesday October 12, which is the next market marker day for us. [The last several have been highly positive or mixed.] It will show the investor zeitgeist of the next month(s) and how stocks will react in the absence of news and specific astrological influences. Our work points to November as a strong down month. It will be even more so if the zeitgeist points in the same direction. Observe October 12 carefully.
Jupiter/Neptune on Monday suggests buying opportunities in Oil. That reminds me that Jupiter and Neptune were last conjunct in January 1997. Jupiter (Bigger)/Neptune (Fool) is now further away than the next paradigm Jupiter/Saturn (common sense) of May 2000. Who will be the last to exit? Not me!
KEY DATES: October 12 November 5, 14
DJIA -> 10,200
GOLD:
S 325 P1 330 P2 340 P3
350
OIL:
Trading Buy
2. ''When the boom ends, it may not be a pretty picture.'' James
Parrott, chief economist and deputy director of the Fiscal Policy Institute.
HW: AMEN.
"So far, investors haven't panicked in the month-long stock-market slump.
But just in case they do, you should be ready with a list of stocks you
want to buy at lower prices. "John Dorfman
HW: We STRONGLY agree.
3. On Friday, we changed our Oil Asset Sector recommendation from distribute to accumulate. We find most Oil stocks are too expensive and do not like the drillers. Our favorite major continues to be Royal Dutch (RD), and we will be buying more Sunoco (Sun) - current Yield 3.9 at the 5.0 Yield or the 24-26 zone for a long term hold.
Gold nicely reached our P1 target of $325. While it is possible it may not go higher in the short term, our bet is on the long side that it will reach $340-$350 by month end. On the Stock side, rebuying of ABX and HM is appropriate.
As to IHI: the third leg of our physical asset play and the only one
not to have yet show its big upside potential this year. Given its
consistent undervaluation, we are on constant accumulation with this aggressive
speculative favorite. I am quoting from an investor subscriber's
letter whose astrological work confirms my own:
"By the way Re: IHI - I have been accumulating some more.
I recently returned from a 3 week visit to India to meet two of my
Hindu Astrology gurus for detailed study of various charts and to learn
therefrom. They so clearly and quickly explained from Roger's chart why
there have been delays and obstacles in his ventures, when the best "dashsa"
period is about to start which will make him a powerful figure, and even
a full physical description of Roger (down to his front two long teeth
with a slight gap in between!!) This and other information I learnt has
given me further confidence and encouragement to invest up to US$100K in
IHI and hold it for at least 4 years."
SILVER Subscribers: UP
STARS/DOWN STARS is being updated each weekend through November.
STOCK OF THE MONTH
selection will mostly be SSS or SLG- hopefully at 52 week lows. We expect
a POSITIVE 10-15% in 6 to 12 months. If you wish our standard 20-25%
in October, you are being forced to have a day trader mentality, e.g. picking
up Revlon below 10. One possibility, a (re) buy of Covance (CVD).
We also have a potential "hydrogen" aggressive speculation. Subscribers
will be emailed shortly with suggested entries.
GOLD Subscribers: While we are discretionary traders, given the high
volatility of the markets between now and December, we will offer a set
of conservative, money management attentive, end-of-day stops with all
trades. While we believe your own systems and parameters should be used,
in case of uncertainty, this new information may prove helpful.
We give 3 time unit stops. Usually this is next day, with the
second end of day at even or better, and
the third end of day locking in profits.
5 READER: Are you STILL betting on 7001 by year end? If so WHEN will
the 3000 odd point drop occur?
HW: Still my bet, I just hope it comes before December 31. This
would require a 500-1000 point drop to 9500-10,000 by end of October, 2000
points in November and 500-1000 the last week of December. Alternately,
a major crash on January 3 could make up the difference.
READER: I am looking for a symbol I could pull up on the computer...everything
they gave me came up with nothing. What do you use to get a look
at Stox?
HW: Its stock traders on the Vancouver Stock Exchange under the symbol
URL. On some computer systems, it is V.URL. Others V-URL or
URL-V etc. You can easily find it and all other Canadian stocks
at the Stox.com site itself.
READER: When you give numbers for the DJIA, are you referring to the
NY Dow, not futures? So if one trades futures, one should adjust
accordingly? Are you putting a stop anywhere?
HW: (1) When I give DJIA numbers, it for cash; when I want to refer
to futures, I do so with the SPZ.
(2) this depends on whether a day trade or a positional trade.
Generally speaking about 100 points will do; the next time unit either
50-75 and the third time unit 0-50. However, you may wish to wait until
after the news, so you are not taken out in a wild market.
READER: Have I read your 10/7 report correctly in saying you are saying
take profits at around 200 points down and get out because the market may
move up to 11000. I think I will cancel my 2nd order to short at 10690.
I am wondering if I have my thinking incorrect that there will be a decent
correction this month.
HW: Yes, I think over the next 30 days the market will correct "decently."
If you are running scared, only add to winners. Take only one position
and close it with a profit or small loss. Be calm.
READER: Bought Ashanti at $8.50. What do you recommend?
Buy, Sell, Hold.
HW: I think most of the damage is already done. If it gets close
to $7, Sell.
Would you hedge against losses by buying other gold mining stock?
If yes, what would you recommend?
HW: I continue to like ABX and HM at current prices.
READER: I just read a news item that seems to be an incredible example
of Saturn square Uranus and the constraints on technology. In The NY Times
there is an article quoting a worker at Intel that silicon chips may have
reached their limits!!! Symbolically that is a very powerful statement.
HW: Agreed.
Meanwhile Yahoo is scary stuff. Very hard to short the Internet powerhouses.
Because sentiment can become so insane that nobody cares if it has a 1000p/e.
Yes its crazy but that is this market.
Good call on gold.
HW: Only 1000 p/e? When it is 10,000 p/e, start to worry. PS
If already worried, buy more gold! :)
Subscribers please send your comments, questions and suggestions to
Letters.
"Can you afford NOT to have financial astrology
in YOUR future?"
Stop reading Wall Street, Next Week, last week: YES,
I WANT TO SUBSCRIBE
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