1. FED MARKETS
2. FOUR RULES OF SPECULATION
3. WEB SITES
4. QUOTES
5. PRICE INCREASES
6. LETTERS
In our May Market update, we noted that we are looking to buy fallen
angels that are 90% down from 52 week highs, or at 104-lows. Some Portfolio
2000 stocks, however, we will consider at JUST 52 week lows. Examples include:
IBM at 53, JNJ at 67 and SNE at 61. We may also buy some more REITs
and/or Convertible Bonds in July.
Will it take as long as to the June 29/30 FED meeting to correct US markets below 10,000? Our magic July 1 date falls just AFTER the June 29-30. FED meeting and just BEFORE Rubin's official resignation.
When US interest rates rise, there may be a reactive dollar high. Use it for a first (or second) investing buy of the Euro which can remain under pressure this summer especially in August (parity attack). By 2002, the Euro will be back to its offering price!
The Japanese rally last week to a 5 month high was noteworthy for increased construction spending (Jupiter/Saturn) was high on the list. Of the Japanese top four construction companies, profitable Taisei is the conservative play, while Shimizu and Kajima are more aggressive buys. However, don't buy now but later in the Fall, as Japan Inc. is a major sell.
Key dates: June 16, July 1
DJIA: S1: 9800 S2 10,000 S3 10,150 R1:10,400 R2:10,555
R3:10,680
EURO: Buy at 102.4
OB
JAPAN: Sell 17,000 OB
3. BEFORE YOU ENTER INTO ANY TRADE, DETERMINE IN ADVANCE:
1. HOW MUCH MONEY YOU ARE WILLING TO RISK LOSING
2. WHAT TIME FRAME YOU ARE TRADING
3 YOUR PROFIT TARGET
4. WHETHER THE RISK/REWARD AND PROBABILITY IS ACCEPTABLE
4. Track Presidential approval ratings at CLINTON JOB APPROVAL.
Chartists will note positive momentum has been broken and is now choppy.
Factoring in his summer transits, we expect to see it potentially below
50% by August.
5. "Up to six Dutch companies, including Fortis Group, could seek a
listing either on the NYSE or on NASDAQ this year," said Bank of New York
senior executive vice president Joseph Velli.
HW: I have the cash ready, and will buy if they time the ADR listings
right. Note: Thursday one of the AFUND Dutch 10 Dutch Supermarkets
group Ahold <AHLN.AS> reported a 32 percent jump in first quarter profit,
and stuck to its forecast of a 15-20 percent rise for 1999.
Charlie Crane, chief market strategist at Key Asset Management said
the market is ripe for a steep retreat. "The Dow has tacked on a couple
hundred points in the last few sessions for no reason other than a higher
degree of confidence that the Fed will raise rates, eliminating uncertainty,''
said Crane. "That's a pretty weak reason to buy stocks in my book."
HW: AMEN
6. Platinum subscriptions are increasing from $3500 to $5000 at the end of the month. Current and prospective subscribers may renew or extend at the old rate until then. Silver (investing) subscriber rates will be unaffected. Gold (trading) subscriber rates are being raised, as previously mentioned, to $1000 a year at the same time.
7. READER: I guess I'm a doubter, being a very new subscriber.
Are puts still recommended for July & September, and if so on what
type stocks?
HW: If you are not experienced at option buying, be very cautious.
The best shorts are Internet stocks but they have much too rich a premium
on most options. If you are a novice, it may be better to go slow
and buy a quiet stock like GE which has less premium and will only go down
if the market goes down. This would act like an OEX put but be much
cheaper. Or look to a tech stock like HWP which has zoomed beyond
value recently. I will have to check the astrology of that one [HWP] before
playing it. Alternately, one could buy into a bear fund.
READER: Goldman Sachs is now issuing Amazon call warrants, to be quoted
on the Swiss market. The symbol ticker for the 150$ strike with expiry
August 2000 is, and I am not making this up, "AMEN"
HW: Amazing!
READER: What do you think of TAX-FREE MUNIS as a place to keep cash?
HW: They are fine. The important point is to have cash - liquid
and non-stock holdings.
READER: Regarding OEX puts, you want us to take loss now and get out.
You said in later part of the year, tech sector is going to take
down turn. What about oil sector, cyclicals and pharmaceuticals?
HW: We like those sectors in this order: Oil first, pharmaceuticals
second and cyclicals third. Remember, we do not intend on paying
current high pricing.
As to OEX, you must use your OWN loss parameter. This depends
on what puts June/July? What strike price? What function (Hedging
or Speculative?) etc. We have clients and subscribers across the
board. In general we are holding but each day, if the market does not trend
down, we consider reducing or exiting.
Reader: I bought YHOO at 171, ATHM at 128 and USWB (US Web) at 26.
I am getting anxious that July is getting closer. What's your suggestions?
HW: I do not LIKE any Internet stocks at current pricing. If
you
were a client of mine I would sell them immediately. However, it
all depends on (1) WHY you bought them - a trade or an investment; (2)
WHAT your profit goals were and (3) YOUR stop loss decision when you bought.
If you have market discipline, stick to the original plan. If you
made no plan however, then I would just sell.
READER: Congratulations Henry on your last short call-The Ralph Alcamporas
of this world will now be feeling slightly embarrassed! I read his latest
research the other day feeling quite incredulous as he now forecasts 10,000
being a floor not a ceiling.
HW: THAT IS THE NEXT BIG FIGHT TO COME.
READER: Why do you think IHI is so low? It is a mystery.
HW: Primarily because of too many past delays. Any new company in the
same stage of development would be 6X the price. However, they continue
to move forward albeit somewhat slowly and therefore will eventually make
it.
Another negative is, in the past, there were too many cheap private
placements of stock. Again in defense of management, their only alternative
was to give up control, something I would not have personally done either.
The final negative is the need to change to the Bermuda (super) horoscope.
That also will be done in time.
READER: If possible, can you please send out an 'alert watch' or something
before 10 a.m. ET? That's 10 p.m. my time. This would be helpful
just to let everyone know something is in the wind.
HW: We can only issue when the market action confirms our forecast.
You are always prealerted that something is in the wind in our Daily Market
Commentary, but we cannot issue a WSNW Alert ahead of market confirmation.
Sorry but when we have, we have not had the best results.
READER: I have been accumulating gold stocks for the last month on the
dips, with the continued drop in gold prices do you still think they are
going to take off this summer, also has oil run its course or do you feel
there is more upside.
HW: Yes I continue to think so. Gold falling to 20 year lows
is a classic contrarian buy signal, but we will know better after the July
6th BOE sale. So far XAU is holding 60 support, otherwise next stop 50
:(.
Oil/Energy we like and is one reason our June Stock of the Month Club
pick is a member of this sector. However, most oil stocks we find
too pricey and would only buy on big dips.
READER: On the price chart it looks like support for IHI comes in at
.78 ish.
On the horoscope (White Horse original Inc.) Jupiter aligns with Mars
in next few days. Jupiter unpredictable. You'd think he throws money in
your lap every time he comes around, but can knock you down as often as
boost you up in a corporate 'scope. Jupiter may bring a bottom area to
this retracement, with a little sideways motion after mid-late June. I
see the real payoff in 2003-05.
HW: I see support at $1CD and I hope the real IHI payoff is sooner!
READER: Could you recommend some brokerage houses to trade futures in
S&P 500, DOW as well as options! With advice?
HW: While I don't personally recommend brokers, you can begin your
research at FUTURES WEB.
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