WALL STREET, NEXT WEEK

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Wall Street, Next Week November 2, 1998
 
 1.  FULL MOON AHEAD
 2.   US STOCK MARKET DATA
 3.  SHHHHH
 4.  QUOTE
 5.  LETTERS
 
A lot of big money managers believe the worst is almost over and are willing to so bet with their pocketbooks.  Still we urge you to wait.  Watch Monday, November 2, which is the marker day for the November US stock market.  Our guess is that the morning session will be down, followed by an up afternoon.  But we are willing to let both the market guide us as well as Tuesday's election results before committing major cash.  Our plan is to close aggressive short positions by mid month and start using a more balanced approach, i.e., 50% long strong stocks and 50% short weak stocks.  Also to begin buying more small caps in advance of January. Anyway we don't think Wednesday's Full Moon on November 4 post US midterm elections will be dull and we would buy volatility.
 
Key dates:   November 2, 4
 
Over the next few weeks, I will be preparing my 1999 forecasts.  I will be posting these forecasts in our premium area by December 7, and then on our general web site in January.  At first glance, they are none too pretty for the world economy and stock markets. However, big money managers are routing for one final blow off and the market could attempt to reach new highs.  Be that as it may, if so, that will be IT FOR THE CENTURY!
 
2.  I am often asked which horoscopes I use for the US Market.  This is not public information.  However, for another view, Carol Mull [Fax 13173536246], author of a forthcoming major primer on financial astrology, has kindly responded as follows:
 
 "The NYSE chart is like the U.S. chart.  Everyone has a different chart and none of them work very well.  The two most popular are May 17,1792 at 10:10 a.m. with ascendant at 11:39 Leo and MC at 00:40 Taurus and May 17, 1792 at 8:52 a.m. with 26:13 Cancer and 09:47 Aries.
 
Some people use the re-organization chart, which is May 11, 1869, NY at 10:26 a.m. EST, ascendant at 10:26 Leo and MH at 29:03 Aries.  This is when the NYSE began to function in its present form and for its present purpose.  The new organization that was formed in 1869 was a combination of the old Stock Exchange, the Open Board of Brokers, a competing organization, which began trading on the sidewalks of Lower Manhattan in 1863, and the government bond department, which had been organized in 1867.  The new constitution was effective Saturday, May 8th, 1869, May 9th was a Sunday, and May 10th a national holiday, especially declared for the linking of the Union Pacific and the Center Pacific Railways in Utah.  So, Tuesday, May 11th 1869 was when operations began.
 
Now, I am telling you none of the above works worth a darn... What I use are some of the index charts, which work beautifully...  
3. Earnings Whispers A comprehensive source for whisper numbers on the Internet!
 
4.  Psychoanalyst John Schott on bear markets:
 "The earliest stage is characterized by denial, increased anxiety and fear.
 The second stage is panic.  People suddenly say, 'I've got to sell.'
 The third phase is despair, people stop buying stocks."
 
5. Q: Can you please tell me when CBS is running the special for Unsolved Mysteries about Financial Planning using the stars?
A:  We are not sure at the time of this writing. Our best guess is this coming Friday, November 6.  9pm ET. Please check with your local TV guide.
 
Q: I see my retirement Mutual funds have lost money, should I move the money elsewhere? Where? CK told me about IHI stocks earlier this year.
A:  This must be addressed individually with your financial advisor. In general we recommend CAPITAL PRESERVATION over capital growth for the next 18 months.  As to IHI, welcome to the club. Perhaps we will see you in Vancouver, BC, August 15, IHI day?

Q: What are your near term predictions on the Nasdaq and small caps? Has their time truly come, or will they retest their lows in the near term?
A:  Selected stocks have rallied quite a bit already in anticipation of the annual "January effect".  We have two more possible retests coming up, then it is time again for the mad bulls.
 
Q: Should I consider professional money management?
A: It is my bias to use experts, whether for the law, medicine or finance.  However, one should learn the basics of good civics, health and money management respectively.  Understand there is a learning curve and skills are required. Giving a person a pencil doesn't quality him or her as a writer or illustrator. Good money management is a near full time job for specialists. See AFUND MONEY MANAGEMENT for our approach.
 
Re: WSJ Interactive story on financial astrology,  I cannot believe Astronomers do not fall in sync with Astrologers. Has this rivalry always existed?
A: No, in the old days - pre the age of Discovery, astronomers were the lowly calculation back office.  They are just trying to get their revenge.  But most ironic was the Harvard astronomer who said it was silly to use financial astrologers. Would it be better to use Harvard trained professors who lose 90% of your money in LTCP no doubt?
 
For any international traders like myself it is hard to always gauge other markets when so far away, although we in New Zealand always take our lead from Wall Street, so it makes it a lot more helpful to have the help of an expert such as yourself. My only regret is that I hadn't heard about you earlier. I lost a lot of money in the October 97 crash and reading your 1997 outlook I can see I would have saved a lot money.
A:  We will again begin to nibble on NZ40 below 1700. Then add more buying in the 1500 -1600 range.  Of course if we see 1200 again, then you should buy, buy buy!
 
I'm not exactly sure what you're seeing on your charts for this weeken, but I just wanted to comment that the crash protection team has been active in propping up this market lately, and I think it's highly unlikely that any serious decline will be allowed to develop before the elections next week.
HW: Yes, they seem to have done a wonderful job for their boss. Still, from a trading perspective, I believe a closing short is the way to bet - the "right" risk/reward.

Q: How do you explain the difference between 1000 points down and 1000 up?
A:  More sellers than buyers or a squeeze of the bulls or bears respectively.  Characteristic of bear markets was a short squeeze as we had the week of October 10.  As we mentioned earlier, there will be one more big move up, at which time/place we REALLY become astro-bears. As to the astrology of this, read my forthcoming TRADING BY THE STARS (2001 pub).
 

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