1. Xmas RALLY TO COME?
2 1999 AFUND FORECASTS
3. INVESTORS ALERT
4. LETTERS
Have we missed the Xmas rally or is it just beginning? Has the market made a double top at 9300 or is 10,000 an inevitable target. Astrologically, much of early next year is positive (except February). The latter half is downright disturbing and may be anticipated earlier.
This week the critical fight zone is whether the market can sustain 9300 and whether 9200 is support. Either way, a test of 9000 is likely, if we are to see 9500 this year. Fortunately, there are safer investments elsewhere.
Key dates: December 2,3
DJIA:
S1 9200 R1 9300
2. INVEST IN EUROPE
TRADE THE UNITED STATES
BARGAIN HUNT ELSEWHERE
Capital Preservation should be the number one priority for global investors in 1999 and 2000. Our 1999 forecasts have been released on our premium channels. and will be posted in the free area January 1, 1999. Note: if you receive WSNW by fax and do not have access to the internet, fax us for a copy of this report.
3. Our November 23 WSNW Alert 35A is worth re-reading:
Unless you are a mad bull, the stock market above 9300 is unsustainable.
We are urging all our clients to exit US INVESTING positions and traders
to re-institute shorts, Holiday or no.
We feel this is an important decision point in the market. If you are holding and not taking ANY profits (or protecting them), you are betting the market is DEFINITELY going to 10,000. That may be, but we have been calling clients to recommend to exit remaining intermediate term positions or at least take some profits or protect with a stop loss. As one broker client wrote today: "Websters is taking the word value out of the dictionary".
Conservative investors can still find pockets of value. If you
do NOT own gold in your portfolio, THIS IS THE TIME to buy!!! Try
Homestake (HM) or see our GOLD posting area.
You can also begin selectively to look at some of the higher paying
dividend Reits like S.L. Green Realty Corp. (SLG) with 6.6% Yield, and
shortly the energy sector. There are islands of value and sanity.
4. I do have doubts about this being a bear market rally. I think
that the recent drop was a bull market correction. We shall see....My
forecast is also DOWN; however, it has been down for several weeks!
HW: Either way, a TRADERS market for sure.
Could you let me know if you are likely to let us know a suggested entry
price for Placer Dome or Homestake or am I to take it that at current levels
today you would consider a good entry price? The chart of Homestake
definitely looks like it has more upside potential.
HW: We must be in BEFORE December 7. Our price for HM is
10 1/2 OB and for PDG 14 1/2 -15. We are recommending buying HM (better
value) and perhaps PDG call options (faster action). Note; I issued
a preliminary alert ahead of Friday to give everyone time to investigate
on their own whether this is for them.
I appreciate your alert today, but value hasn't been driving this market
for quite some time. Yet it continues to rise. Today is the direct effect
of Greenspan's (political) decision to lower rates again despite the obviously
brewing resurgence of irrational exuberance. Now he can sleep in the bed
of his own making while the mania continues unabated. The market needed
a pull back from the old highs for an orderly advance. I know he's not
happy with this, and the Piper will have to be paid eventually. We all
know now that the market will correct again and perhaps violently so, yet
there is also no reason why it should have to do so imminently. It can
just get more over-valued.
I am concerned that you are no longer reading the market, but trying
to impose your own view of what it "has" to do. I did that for years during
the Bull's advance and thus lost much money and opportunities both. Better
take a fresh look, since your recommendations are losing us money at this
time. Thanks.
PS Note that I said "at this time". Your call to short at 8600 was
wonderful and much appreciated. Currently tho you are in a rut, and I have
lost money in shorting the market, as well as losing great opportunities
in not going long during this recent 2000 point rebound. That's an awfully
big move to miss. I am currently underwater with the Yahoo short at 197
today- granted an unbelievable move today.
HW: These are strong concerns of a number of readers, but note
the following:
1. A 2000 point move is not what it used to be. This is
one or two market times - there are 6-8 per year. It is however,
one hell of a trading opportunity to miss. I personally regret not buying
Motorola at 39 as our October Stock of the Month club pick and selling
it above 60.
2. Globally, the world is still an economic mess, IMF bandaids
notwithstanding. China, Japan, Brazil, etc. are ticking time bombs.
I am not comfortable with the RISK/Reward.
3. As you know from our 1999 reports, we are basically trading
the US markets, not investing here very much, with a few fallen angel and
small cap exceptions. We expect many more such opportunities on both
the up and down side for traders. As to your Yahoo move, it was after
two successful (profitable) counter-trend trades on Yahoo. To me,
it makes sense to keep trying, but of course exiting often.
4. As for investors, we recommend setting a profit price
target for each element of their portfolio, whether it be 10%, 20% or 50%
and then stop-lossing or exiting. Aside from taxes, there is little
to prevent you from buying again. At the end of next year (DJIA
7000), buy and hold will not have seemed as good an idea as buy,
hold and sell.
I would like to submit a paper for the conference. ? Email or snail
mail? The format ? like a PHD research paper or an article? Sorry I didn't
see the first call.
HW: An outline by email is fine. These are for short presentations
or panels at the May 14-16 1999 ISBA Conference in NYC.
Please send your comments, questions and suggestions to Letters.
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