1. JUNE MARKETS
2. UP STARS/DOWN STARS
3. GOLDEN OPPORTUNITIES
4. QUOTES
5. ON THE WEB
6. LETTERS 

 
THE NEW 2009 MARKET ZEITGEIST
June 12 was a rather interesting and unusual day for a Market Zeitgeist.  Japan stated that it had “absolutely unshakable trust in US Treasuries”, not surprisingly, the US Dollar rallied, while commodities, especially gold and silver, fell. 
Pre-Ben, it was often said that one should not fight the Fed.  Be that as it may, it is still NEVER wise to fight the JCB (Japanese Central Bank)!
Stock markets began weak, and then very slowly and begrudgingly made an ever so slight gain.  So what is the new Market Zeitgeist?
Less Volatility and Market Cross Currents;
Stocks Meander slightly ahead and favor defensive plays. The US$ doesn't collapse and Commodities may not be needed as a safe haven panacea.

 
KEY DATES:    JUNE 15, 19
DJIA:                8776 PIVOT 9000 RESISTANCE
SPX:                943 PIVOT
NASDAQ:        1800 SUPPORT 1925 RESISTANCE
XAU:                145 PIVOT 137 SUPPORT 163 RESISTANCE
AUGUST GOLD:940 PIVOT S1 930 S2 920  S1 910  R1 960  R2 990  R3 1000
JULY SILVER:   1516. PIVOT 13.50 SUPPORT 16.25 RESISTANCE
XOI:                  820 PIVOT 900 RESISTANCE
DEC OIL:          75 PIVOT 60 SUPPORT 78 RESISTANCE  

The new Market Marker Sentiment has Less Volatility and Market Cross Currents.
Stocks Meander slightly ahead and favor defensive plays. The US$ doesn't collapse and Commodities may not be needed as a safe haven panacea.
2008 CLOSE:           DJIA   8776, SPX   903 & NASDAQ 1577
2007 CLOSE:           DJIA 13264, SPX 1468 & NASDAQ 2655
2006 CLOSE:           DJIA 12463, SPX 1418 & NASDAQ 2415
2005 CLOSE:           DJIA 10717, SPX 1248 & NASDAQ 2205
DJIA:                        8 ~ FV 3 UV; 7 offer 4%+ Dividends 4 offer 5%+ Dividends.
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK.
 

2. It was no surprise that GM and C were living on borrowed Dow Time.  We believe their DJIA replacements Cisco (CSCO) and TRAVELERS (TRV) were well chosen.
Note: These changes will involve some slight changes in our Dow valuation and price targets which we expect to complete shortly. 
WSNW subscribers can view our latest premium post revision at S: DOW JONES STOCKS (6/10/2009). 

BUSINESS & BANQUETS
We always enjoy NAREIT annual Investor Forum at the Waldorf Astoria in New York.   While the tone was serious and subdued, [“We are NOT at the bottom”], it is has been our feeling that our previous weighting of REITS – SECTOR AVOID, will be upgraded by or before 2010 to Slow Accumulate Underweight.

Our top three current picks there were all specialty REITS:

1. Entertainment Properties Trust (EPR) 12% Yield: The Theatre industry is very healthy and a majority of this trust’s revenues. Remember in the Great Recession both gold and entertainment were outstanding investments. - So too in the Great Recession?
2. Digital Realty (DLR) 3% Yield: There will be continued strong demand for data center facilities.
3. Plum Creek Timber (PCL) 4% Yield: Future upside includes biomass (alternate energy demand) and some oil/gas potential as well as rural timberland real estate sales. 

Three other yield REITS worth watching are BioMed Realty (BMR) (12% Yield), Hospitality Properties Trust (HPT) 20% Yield and Lexington Realty Trust LXP (16% Yield).
Warning: Remember US Real Estate has yet to bottom and has further to drop! 

3. John Embry Expects $1,500 Gold and Early Stage Hyperinflation by Year End 

Junior golds: the remarkable comeback 

Will Seasonal cycle work again this year- or will a weakened dollar and higher price oil drive precious metals this summer?  I don’t know the answer. However, I do foresee two more downside astrological tests for gold similar to Friday before the end of June.
Also, I believe gold and silver are currently overvalued. However, while some PM stocks are short term, some are not.
Our Current Fair Value for Gold is $920 and $13.50 for Silver as a commodity. Silver’s investment value ranges from $12 to $15.  

4. “What we find is that secondary-equity offerings frequently signal a view in management suites that prices are rich. Does that mean this is an interim top? Who knows, but it would be unsurprising.”
Robert Arnott, chairman, Research Affiliates 
HW:  The question is how high the short term top will be – under Dow 9000 or over to as high as 9600? 

“There will be a lot of negative commentary about interest rates and commodity prices that will be a headwind for stocks in the short run. Ultimately, both are indicating a stronger economic environment that will be positive in the long run.”
Eric Green, director of research, Penn Capital
HW:  That is so IF demand driven, but not if caused by perceived US Dollar weakness! 

"The question is: 'Can we get through the options expiration and hold onto these gains and maybe move a little higher?' I think prices have gone too high."

Paul Mendelsohn, chief investment strategist, Windham Financial Services

HW: I agree. 

5. Can bonds come back? 

Presidential cycle bullish for rest of year 

China’s Commodity Buying Spree

Shipping and commodity executives are questioning China’s motives as it piles up extra quantities of products. 

6. READER: Everyone thinks the market is going much higher so they are not concerned at all. This is due to the PMI number from China and they don't want to miss a return to S&P 1050.
HW:   How different they will think and feel by late Summer. 

READER: I understand Q1 through Q4. What is the definition of H, as in H2 etc.
HW: H1 First Half of the Year; H2 Second Half of the Year. 

READER: Good call on the metals. My puts are doing well on ABX, SLW, SU, and GG and acting as a buffer on core positions that remain. I took profits also prior to the downturn. You have the 12th as the next critical date. Do you see the downturn lasting until then and then extending further or possibly reversing.. That appears to be the big next turn up/down point as per the newsletter.
HW: Our advice is to lock in some of  your profits on the 12^th and  review or lock more by the end of June.