1. TIME IS RUNNING OUT
2. LUXEMBOURG
3. PORTAL INTERVIEW
4. QUOTE
5. LETTERS
1. THE END IS NEAR, despite record money inflows. We were bemused to see the top of our trading range DJIA 10,500 reached (another automatic sell signal for us), but this was in the context of a weakening and rotating market.
On our market marker day, the DJIA was up, while the OEX and SP were down. As we interpret this, expect to see a flight to quality, but between now and the summer, many will fall. Compaq dropped more than 50% from its highs: that was a MARKET CRASH for Compaq stock holders. I believe if you continue to "Buy and Hold" US equities, instead of trading them, you can expect this more and more. Investor hopes for low interest rates, slow inflation and rising corporate profits are pipe dreams, not a realistic assessment of the future direction of the US economy.
A CAUTIONARY TALE: PRICELINE.COM (PCLN)
PCLN allows customers to name their own price for airplane tickets
on the web. After less than one year in business, during which it lost
$114 million selling $35 million worth of airlines tickets, Priceline.com
is valued at 10 billion - more than the combined worth of UAL (United airlines,)
NWAC (NorthWest airlines) and Continental airlines!!!
ADVICE TO INVESTORS: Divide your stock portfolio into 4 categories:
Those most likely to drop 25%, 38%, 50%, and 68% or more in the
event of a 20%+ stock correction.
Then start selling the most risky to achieve a 40% cash portfolio allocation.
Next week will be highly pivotal: War watch Monday, Tuesday the Sun enters Taurus and Wednesday is Earth day.
KEY DATES: April 20, 21, 22
DJIA:
S1 9800 S2 9500 S3 9000 R1 10,000 R2 10,300
R3 10,500
FYI: The AFUND 1999 UIT is up more than 21% (after expenses) compared to 14% for the DJIA and 7% for S/P 500.
2. Last week I visited Luxembourg, the future banking home for our European clients. As all tourists know, the restaurant food is superb and the surrounding countryside quite lovely. Of course, the weather is far from ideal. Yet in this way, they are lucky. Otherwise, with all of Luxembourg's charms and high quality life style, the addition of good weather could cause them to be overrun with foreigners wishing to relocate. :)
After four years delay, I have finally visited IHI's first show home and was indeed fully impressed. For details of this and the latest information on IHI, please see our latest post IHI Luxembourg.
3. My Portal Interview. Portal is a the new online magazine which features Astrology; Feng Shui; Natural Therapies; Dreams; Shamanism; Magic; Ancient Mysteries....and not so Ancient Mysteries. In their first issue, I am pleased that The Portal interviewed noted New York astrologer Henry Weingarten about how the planets influence your investments.
4. April 10 (Reuters) - Doing basic research before investing in a company is the best way to win in the stock market, and is even more important as an economic slowdown looms, investment guru Peter Lynch said on Saturday.... Lynch, warned investors a bear market would likely happen in the next few years and that investors should start planning for that now.
``We've had 15 periods of declines of 25 percent or more (this century)
and we'll have more of those...you need to say to yourself what am I going
to do, and if the answer is 'I'm getting out,' you ought to get out now,''
Lynch told Reuters after addressing the crowd.
HW: Italics emphasis mine!
5. Reader: 1000 DJIA point drop July 4th 1999.
HW: Happy Birthday USA eh? I am curious how that could
happen on a Sunday when the market is closed?
READER: You mention the Financial
Trader program which I am considering at the moment. However you say
you personally don't use it. What do you use and why?
HW: Because I was a professional astrologer for twenty years before
starting to research Financial astrology, I already had a successful forecasting
practice and adapted these techniques to my stock market investigations.
READER: What is the difference between the silver and platinum subscriptions?
HW: Silver subscribers have access to our investing channels only,
while Platinum is for market professionals or money managers. Platinum
subscribers have full access to our investing (silver), trading (gold)
and platinum channels.
Reader: Re: WSNW Alert 37C, I am maximum short via OEX puts (May).
This is the largest short position I have had in years!
HW: Remember to use good money management.
READER: I saw that previously they compared Priceline to Delta saying
that PCLN was worth more than the company that actually produces the tickets.
You don't have to convince me. I just hope the pain isn't as bad as it
may be.
HW: "Those who do not study history, are condemned to repeat
it."
READER: Congratulations on your IDTC pick - I was stopped out
one day at $17.09 and then put my rebid in 5c too low and it got away on
me- infuriating! I wish I had put a stop loss on the BAANF and wish I had
not put one on IDTC!
HW: Your mistake was to mix up a stop-loss stop with a profit-protecting
stop. The first is more for money management, the second is more
for a moving recalculation of risk/reward. Read my forthcoming TRADING
BY THE STARS (2001).
READER: XX DID THE 20% YOU SAID IT WOULD. DO WE SELL NOW?
THANKS
HW: Depends on your total portfolio. I am selling into
the current highs; you could sell or place a tight stop.
READER: I'm heavily margined on Microsoft. when should I get out?
HW: Yesterday! First, reduce ALL margin on computer stocks.
Second, reduce holdings. Could you afford a MSFT drop similar to
CPQ with your leverage? We foresee that any MSFT surprises will be
bad ones.
READER: I guess I am just surprised that this market is so confounding
that the date you seem to feel will be the low point keeps moving.
HW: Yes, but at least it drops first and each time the R/R improves.
While there is some green in April and May, June on is RED! Translation:
There are some positive April/May influences which could be the final blowout.
However, I will continue to ignore then or underweight them.
READER: I also found it interesting that you singled out 4/13
as a directional date for the market. I suppose you mean that if is a neutral
day the market will meander, if it is strong the market will rise and if
the day is a downer the market may have a "correction".
HW: Yes that is what it means.
READER: The result of this turning period seems to be sell S&P 500
and buy Russell 2000 on a sector rotation. Natural resource equities
and REITs have done exceptionally well following this period as institutions
bail out of overpriced big cap technology shares. On the macro front,
there is increasing evidence that demand is coming back in Southeast Asia
which puts a bullish spin on the deflation/ inflation debate.
HW: I have nothing to add.
Can you AFFORD NOT to have FINANCIAL ASTROLOGY in your future?"
Subscribers please send your comments, questions and suggestions to
Letters.
"Can you afford NOT to have financial astrology
in YOUR future?"
Stop reading Wall Street, Next Week, last week: YES,
I WANT TO SUBSCRIBE
Subscriptions investing edition are $300 one year; $500 two years;
new subscribers 3 month intro $99.
Subscription rates trading edition are $500/annual; $150/Quarterly.
************************************************************************************