1. WILD AND CRAZY
2. 2000 FORECASTS
3. STOCK OF THE MONTH
4. QUOTES
5. LETTERS
With "no signs of wage inflation" US stocks soared to record highs Friday, a Bradley Turn date. Nonetheless, most Wall Street economists believe and I agree that the Federal Reserve will probably raise interest rates within a few months.
The EURO tumbled below $1 [Our 1999 P3 target] for the first time ever Thursday at 3:47 p.m. EST. Touting my own horn here to my mono-market critics, this was one great call. However, the Nasdaq is up 61 percent in 1999, having closed at 3520.62 and crossing the 3000 barely a month ago. If this is just 2000's January effect coming early, then no problem. But if this is the final stages of a manic market with increasing acceleration - Oh boy! "Staid" Blue chips are increasingly moving 6% and more a day. I find it very, very scary when Big Board stocks trade like emerging markets.
What lies dead ahead this week? Tax Selling? A new Japanese
shock?
Astrologically, December 8 to 14 is one [of 3] trigger activation of
the infamous Solar Eclipse of August 11, 1999.
KEY DATES: December 10, 13
DJIA:
Trending to Friday.
BONDS:
Yields rising - Sell/Hedge to 6.44+
EURO:
Continuous long-term accumulation .99 to 1.01
2. 10,000, 9500, 7000 or 11,000, 12,000, 100,000?
WSNW subscribers can preview our 2000
forecasts to be publicly released in January.
3. One possibility for December's Stock of the Month club is Laidlaw (LDW), North America's largest operator of school buses, ambulances, and intercity bus service. It is being dumped by Index funds who must buy Yahoo by Tuesday. We like the country/currency play, although I not over fond of the transportation industry due to rising fuel costs.
Another possibility are Cemetery stocks which are down 80-90% such as Service Corp. [SRV} or the even riskier Loewen [LWN] as we foresee constant demand. We may also choose a January small cap play, perhaps our new Internet client Stox.com [V.URL].
4. "It is the Goldilocks picture. There is strong growth without inflation."
Pierre Ellis, economist Primark Decision Economics
HW: A nice fairy tale Pierre.
''The Canadian economy is on a tear.'' Adrienne Warren, economist Bank
of Nova Scotia.
HW: See our Canada
report - the best yet to come. However, the horoscope of the new Canadian
Venture Exchange (CVE) is questionable. It has Scorpio rising, Sun-Pluto
conjunct in the First House, Venus opposite Jupiter, a Mars-Neptune South
Node conjunction along with a Mercury-Uranus-Saturn T square. I wonder
what their astrologer was thinking?
5. READER: Don’t you find it amazing how high the markets seem
to go – no end in sight!
HW: I used to before I realized people were acting greedy, stupid and
insane. That there WILL be hell to pay sooner or later I have no doubt.
READER: I have tried to hang in there but I feel stocks are getting
away and I think Y2K will not bring the market down since people have been
saturated with it for 2 yrs. I don't think they will panic....I was hoping
for the perfect opportunities with your prediction but now it seems
I have lost out and will have to capitulate. I hope you are correct
for everyone else's sake.
HW: I am just beginning to find undervalued stocks to buy. Time will
tell if buying them plus large cash holdings will outperform in 2000-2002,
but that is the way I choose to invest for my clients.
READER: I know you won't agree with me! I totally agree with you that
the market is overvalued and that inflationary pressures are not being
addressed. All year I have thought we would have a 1929 type correction
but we haven't. I now think we may even have a bullish tinge to the end
of the year-but so help the market when the Fed meets in February. Personally
I think your next years May date may be the bigger one, although all the
largest corrections have been in October.
HW: We are expecting one more rate increase before 1Qtr 2000. A surprise
change to tightening bias at the December 21 meeting is possible as REAL
inflation (Asset & Goods and Services) is continuing despite faulty
government reports. It remains my belief that time is between the
July 99 Solar Eclipse and May 20 Jupiter/Saturn. As you suggest, it could
take until May, as was the case with Gold this past October.
READER: With your expectations for the market to seriously drop, would
you sell or hold "gold stocks."
HW: Whether the market drops or not, we like GOLD stocks and are not
selling them as we consider Gold a core holding for 2000 as in 1999. However,
as the gold sector is no longer dead, it can now profitably be actively
traded, should one so choose.
READER: What's happen to the detailed forecasts made by JF Richard for
French markets?
HW: Unfortunately he is no longer posting on our web site. Subscribe
to his BOURSE ANTICIPATIONS
si vous lisez des Français.
READER: Re: IHI Story,
I just wondered if that was current?
HW: It was written 10/25 and we plan a year end update. Currently its
stock is being pressured by year end tax selling. IHI stock is close
to bottom levels and while the company's progress remains considerably
slower than we would like, this also creates an attractive long term buying
opportunity.
READER: Which IHI stock should I buy?
HW: It is the same stock and both markets track each other. The professional
way to enter an order is either by price limit or if a market order, then
direct it to "the cheaper of the two markets" OTCBB or CVE (VSE).
READER: Don't you take into account the transits of the Nasdaq? The
13 degrees of Uranus in Aquarius has been making a trine to Nasdaq natal
Uranus during half of NOV. til mid Dec. That's not too shabby is it.
I'd like to know IF YOU CONSIDER GOOD ASPECTS AT ALL.
HW: Probably less than I should, however remember, good aspects are
not always "good."
READER: You are correct in your assessment of the mkt being way overvalued.
The problem is, you can be correct and still lose out in this market. This
market has only 1 way to go and that is up. Even if we get a correction,
people will buy, and earlier than before, so the corrections will be shallower....
Finally, predicting a correction with January staring you in the face
sounds like desperation to me. I would love to see a correction, so I can
load up on stocks, but I don't see anything happening until after April.
By that time, Dow should be over 12000. A correction that brought
it down to 10,000 hardly seems noteworthy.
The real danger, it seems to me, is being out of the market - or worse,
being on the wrong side.
You may sell subscriptions based on your doom and gloom, but you cant
be making any money investing that way.
HW: I agree a correction to 10,000 would be nothing and the big money
timing for March would be late. Our stock picks and global allocation
historically outperform. This year may be the exception and be eclipsed
by aggressive Tech/Internet/Financial sector plays. As I am of "sound mind
and body," I cannot in good conscience even CONSIDER such investing practices.
READER: I saw Stox com- wow. Do you think 5 or 6 before Xmas?
HW: Perhaps, but before or just after, I will be happy either way.
READER: I'm not saying "I told you so" but see what's happening. The
bulls will not let this market go down and they have billions of dollars
to keep it up. And all the others, whether they think it is crazy or not
will not get out as long as the market zooms upward. So there's only one
way for it to go--up!
I now think that the cause-effect between the economy and market is
reversed--everyone is worried that a market crash will ruin the economy,
but I think the only way this market will stop rising is when the money
supply in the economy dries up. And that won't happen as long as Greenspan's
around.
My forecast: 12000 by Dec 31 and 15000 by end of next year. And by
the way, Y2K REALLY is not a problem anymore--even Yardeni is sounding
sheepish about the scare he created.
HW: For years, money supply has been overstimulated. Y2K reality
remains an open question. I also believe Y2K fears will appear at the last
minute, but even if they don't and nothing happens on January 1, it is
an unnecessary and avoidable risk for the prudent investor, i.e. sell the
Technology sector.
READER: Jupiter station conjunct progressed Sun this month times YHOO
joining the SPX. Uranus is on Yahoo's Moon so I would hold it and look
for 300 before the end of month! It will tank but not until January.
HW: Almost anything is possible these days. I believe it will correct
after joining SPX, that is why we did one short Friday at 255 (10-point
stop) and plan to do more by 12/9.
READER: Henry, now I am convinced you are a bear.
HW: GRRRH!
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