1. AUGUST MARKETS
2. UP STARS/DOWN STARS
3. GOLDEN OPPORTUNITIES
4. CHINA BUBBLE
5. QUOTES
6. ON THE WEB
7. LETTERS

READER: Two quick questions:  I was wondering if you are looking for a top possibly this next week?  More importantly, I have some things shaping up in my work (too much to bore you with) that appear very similar to 1987 – if so, then there could be a stealth decline in September.  Of course, there can be a stealth decline anytime; however, my work would indicate that September is the most likely time for such a decline.  In fact, I would think the decline could be of such a magnitude that you could have a low for the rest of the year in September if we have the decline I am expecting. 

I believe the final stock market low to this bear market is at least a year out, so the September expectation would just be some excitement along the way.  I respect your work and I was just wondering if your astrological research has any such possibility for a September massacre – also interested in the time period around August 6 or 7.
HW:  Yes. August 5 to 7 is one astrological timing for a possible market time [Lunar Eclipse 8.55pm ET 8/5.]  The week after is options expiration followed by the FOMC meeting August 11 and a 10 and 30 years US bond auction. Risk is almost everywhere you look.
The more serious market risk, regardless, is in September from an astrological viewpoint - SO TOTAL AGREEMENT.
READER: have great respect and appreciation for astrology (when the tea leaves are read by a true professional).  My work is technical and behavioral, so I have an interest in the astrology when I have major things coming up as I believe if the astrology confirms what I am looking at, the probability of being correct skyrockets.
 

 “Clearly there are a lot of issues in the marketplace, including unemployment and concerns about the future. From now until third-quarter earnings start to appear in October, the markets may see some additional lows. I would wait for a better buying opportunity which I think will come between now and October.”
Gordon Bernhardt, president, Bernhardt Wealth Management
HW: I agree.  Whether markets go higher or not short term, we believe they will be LOWER INTERMEDIATE TERM.
BOTTOM LINE: The Risk/Reward of owning most stocks Short Term is relatively meager to poor.
 

GUEST HYDE PARK SOAPBOX: Five Reasons the Market Could Crash This Fall 

With all this blather about “green shoots” and economic “recovery” and new “bull market,” I thought I’d inject a little reality into the collective financial dialogue.
 

 
KEY DATES:    AUGUST 13
DJIA:                9300 PIVOT 9000 SUPPORT 9600 RESISTANCE
SPX:                1000 PIVOT  970 SUPPORT
NASDAQ:         2000 PIVOT
XAU:                145 PIVOT  135 SUPPORT  165 RESISTANCE
DEC GOLD:      950 PIVOT S1 940 S2 930 S3 910  R1 960  R2 975  R3 990
SEPT SILVER:  15 PIVOT 14 SUPPORT 

XOI:                  940 PIVOT
DEC OIL:          ---->68  

Market Marker Sentiment until 2010 is Less Volatility with Market Cross Currents.
Stocks Meander slightly ahead and favor defensive plays.
The US$ doesn't collapse & Commodities may not be needed as a safe haven panacea.
7/21 PRE-ECLIPSE: DJIA   8915. SPX   954 & NASDAQ 1916
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:                        5 ~ FV 1 UV; 6 offer 4%+ Dividends 4 offer 5%+ Dividends.
THINK TRADITIONAL SWISS AND PRESERVE CAPITAL: FOCUS ON PROTECTING AGAINST DOWNSIDE RISK. 

2. While markets are not yet as overvalued as they were undervalued at DJIA 6600 (9600? 10,000?), we find an increasing number of stocks valuations increasingly distant from their economic fundamentals.  That doesn’t mean markets can’t go still higher on a combination of frenzied buying and/or short squeezes (Remember when Nasdaq was 4000 before a short squeeze to 5000), but it does mean if you wish to sleep soundly at night, place trailing profit stops, sell more stocks or take drugs! :) 

HOUSTON WE HAVE A PROBLEM-Companies continue to trim expenses
Many Oil majors, after cutting staff and exploration budgets, are now focusing less on the internal business and more on their network of product and service suppliers, which they believe are still charging too much despite sharply lower oil and gas prices from a year ago.
We believe this pattern of squeezing suppliers will be employed by more and more larger companies, and not just in the natural resource sectors.  From a fundamental view, this “profit squeeze” will show up in Q3 2009 or Q1 2010 earnings. 

3. Silver continues to out perform gold; however, above $15 we see it overvalued short term.  As for gold, while seemingly range bound; there remains short term more risk to the downside. 
If compelled to buy, we think quality gold and silver stocks represent better value.  Currently, our plan is to remain mostly on the sidelines until later in the Summer or the beginning of Fall. 

4. 'Bubble-Mania' in Shanghai Spreads to Global Markets 

CHINA BUBBLE: 

HSBC Returns to China Roots as Nation Prepares for Foreign Stock Listings
Letting foreign companies sell stock may help the securities regulator cool a stock rally that has fueled concern that a bubble is forming. The benchmark Shanghai Composite Index trades at 38 times earnings, compared with 17 times for the Standard & Poor’s 500 Index. 

READER: SOLAR ECLIPSE is not visible in USA like in China and India, do u think it will have effect in USA stock market?
HW: We live in a global world and remember that eclipse effects linger for up to one year! 

READER: More eclipse effects? People flee Chinese town hit by plague
HW: May be.

READER: It will be interesting to see the price action of the Chinese markets between September 10 and September 23^rd. Reference. Monday Shanghai Exchange 3266. http://afund.com/wsnw/090727.html 
The final frenzy usually doesn’t last. The turning points in China are often related to political calendar. Retail investors hold the popular belief that the government won’t let the market drop before October 1, the 60th anniversary of the PRC. Last time it was the 17th Party Congress in October 2007. The market tends to roll over around the time. If the past is of meaningful guidance, this wave will taper off before October. http://www.my1510.cn/article.php?id=e3fc777cdd24720a 
Interesting, seems your astrological prediction is supported by real life analysis.
HW: It should. There are many valid ways to discern the future, astrology’s virtue is that is a “First Alert”. 

5. “If you had sold in May and gone away, you’d be feeling pretty sore by now, People are so worried about missing the upside.”
Andy Lynch, money manager, Schroder Investment Management
HW:  I am not happy, but not greedy.  I don’t like to buy just because other people are madly buying. 

"There still remains much uncertainty over the timing and magnitude of any real economic recovery."
Nimit Khamar, analyst, Sucden Financial Research
HW: You betcha and remember markets HATE uncertainty. 

“The market has been over-optimistic about a robust recovery. Most of the earnings we’re seeing are mathematically easy because last year was so bad. Most cyclical companies, including technology, you’re getting inventory stocking. There isn’t much demand to drive revenue.
David Pearl, Managing Director, Epoch Investment Partners
HW: Outside of government spending and hiring that is largely true.  When this realization hits, markets will correct. 

6. Time to Get Conservative? 50 Ideas for a Summer Sell-Off 

Will China's Accounting Cause a U.S. Stock Correction? 

Are There Bright Spots Amid the Global Recession?
A snapshot of the better economies. 

7. How long could a short squeeze like this last?
HW: It may have ended Friday, wait for the next FOMC meeting, or at most, last until the upcoming September correction. 

READER: As you say very interesting this also fits with the Bradley model low end of September.
As regard to the 6th/7th August I expect a top on the 5th are you saying these 2 dates 6th/7th begin the steep decline ?
HW:  A lot of astrological analysts have dates starting around August 5^th.  Given current lofty market valuations, this is an attractive risk/reward short trade.
I would think September is a (very) STEEP decline, ESPECIALLY if markets haven’t corrected by then. 

READER: Gloomy in August, Gloomy in September.  Let me know when to cheer up :-P .
HW: I’ll drink to that.

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