1. MARKETS
2. DJIA
3. JANUARY STOM PICK
4. SAGE ADVICE
5. STOPS PART II
6. LETTERS
As is well known to readers of WSNW, I believe the US market is going to 8400 and then 7000 whether or not it reaches 10,000 first (only Alan Greenspan knows that for sure). There is no denying we are in a profits recession. Our basic approach (as investors) is to wait for the bad news and then buy e.g. BA or CAT for the long term. We look to buy beaten up sectors such as oil services, energy, gold, paper and housing LONG TERM. Of course we are NOT in any rush. Best trades are obviously potential M & A situations.
As to the Nasdaq astrologically, investors will continue to show no fear for several more months. However, from the Summer on, financial astrologers expect the long expected (and overdue ) slaughter.
On a non-astrological footnote to this Clinton weekend vote:
In NYC anti-war demonstrators carried a sign reminiscent of the 1960's:
BILL CLINTON:
MAKE LOVE, NOT WAR!
Next week is the Winter Solstice and FOMC Tuesday.
Key Dates: December 21, 22
2. Two DJIA stocks have reached value target, Boeing (BA) and Caterpillar
(CAT) - 28 to go! However, there is no rush to buy them unless
you are a money manager with a mandate to stay invested. We recommend
checking our rating system in addition to the our value price.
Ideally, one buys at a value price or better, stocks with our 1 or
2 rating. In our view, one should NOT buy price alone. If a
stock were priced at fair value but had a 4 or 5 rating, it would be best
to avoid or under-weight. However, if a stock were well below our
value price AND it has a 3 or better rating, our forecast would be for
a profitable trade or good investment. Remember, unless we are your
personal money manager, ALWAYS use our ratings IN COMBINATION with your
own research or those of your financial advisor or broker.
3. We are pleased at the success of our November pick: BRYO (up 100% in 2 months). Our January Stock of the Month pick is likely to be the biotechs BIOMF or internet technology stock IDTC. For some time, Nasdaq investors will continue to show NO FEAR.
4. Charles E Merrill, founder Merrill Lynch & Co, Time Magazine
In a letter to customers just before the 1929 stock market crash:
"We do advise in no uncertain terms that you take advantage of the
present high prices."
5. The use of stops varies with each trader and investor.
Just as you should have a trading and investing plan for each purchase
IN ADVANCE, so too should you have a defined EXIT strategy.
Because I am usually staring at market screen from 8:30 to 4:15 pm,stops
are mostly WARNINGS points for me to question my trade. I re-ask
"would I buy this position NOW?" If yes I hold, if no, I exit or
closely stop depending on my "feel" of the day's market activity.
FLUID VS FIXED STOPS: Mine are fluid, this is the time I begin
to worry about my position.
EOD VS INTRADAY: My stops are usually end of day. They
can be executed intraday if I project the EOD position to be more costly
than a current exit.
SYSTEMATIC VS DISCRETIONARY: I am primarily a discretionary player,
and can overide a stop one time period (overnight) if my projection for
the next stay is STRONGLY in the direction of my trade.
6: Q: What's wrong with IHI! It is not behaving as it should.
A: How should it behave? It was up 25% in the past two weeks,
then year end tax selling sold it back and then bargain hunters stepped
in. We expect to see $1.10 before February (IHI show house publicity)
and then $1.50. Is this not the right direction? Besides, last
night I dreamt IHI was $10 and I had to decide whether to sell any IHI
stock. I was going to sell 1000 or 2000 shares, but then......
I am a subscriber to your Gold service and would like a password to
access your 1999 Forecasts. Keep up the good work, we can't all be
right, all of the time. I'm sure that the continued good publicity and
banging the drum will earn astrology more and more followers.
A: Thank you.
Hi Henry do you have price targets for the new stocks on up/down stars
Imclone systems (IMCL) & Biomira (BIOMF) thanks.
A: They are not yet into the system, this is preliminary for
people to familiarize themselves with it in case they are interested,,
if they do not have a date or a price, it is just a watch not yet a buy!
Currently my thinking is 3 for IMCL and 8 OB for BIOMF.
Q: Is subscribing to your newsletter tax deductible??? Please
explain.
A: For a number of our subscribers who are professional investors
and traders it is a business expense. Naturally, you must check with your
tax advisor whether this applies to your individual situation.
Q: Have you started the $50,000 managed account yet?
HW: NOT at this time' our minimum remains 100K for 1999. However,
we are still trying to get a fund up and if so, our minimum will be 10K.
I think I will do an XAU call the end of Dec. for Jan.---and then
maybe in Jan. for Feb. etc. I bought HM at 10-1/2. Also do
you plan to sell some of your IHITF, or wait the several years?
HW: Personally I would prefer to buy one February call and exit
if not profitable in early January. There are good times for traders
to sell any stock e.g. key resistance areas, (For IHI, $1.15, $1.60, $2
- for IHITF .75, $1 etc. ) but I rarely sell IHITF as this is for me a
long term investment.
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