FINANCIAL CYCLES WEEKLY UPDATE #0346 – November 16-22, 2003 with TIM BOST

COMMENT: For some reason, every time there seems to be a light at the end of the economic tunnel, another one of the economy’s light bulbs burns out and things get a little darker. A couple of weeks ago government officials were cheering about the economy’s remarkable turn-around, but then last week the big corporations who were reporting earnings added a dose of reality to the mix.
A key company that reported was Wal-Mart Stores (WMT), which admitted to earnings that were short of Wall Street analysts’ expectations. In late September, the company had announced that its earnings would be “at a midpoint” between 45 and 47 cents a share, and its profits in fact turned out to be 46 cents for the quarter. Some over-optimistic analysts, however, had estimated that the company was actually going to earn 54 cents a share, so it was a big disappointment when the reality matched the company’s forecast instead. The WMT stock price dropped nearly 5 percent in a single day’s trading on Thursday, pulling much of the market down with it.
The real story behind the news, however, was what the Wal-Mart numbers had to say about the bigger economic picture. Oh, sure, 46 cents was higher than the 41 cents a share the company earned in the corresponding quarter last year, but things were extremely grim last year and that wasn’t much of a benchmark. What was more interesting was the reason behind the disappointing profit picture. In commenting on the current trends in consumer spending, Wal-Mart President Lee Scott said that “I don’t see the strength that many of you in the investment community appear to see. We’re still seeing a cautious customer who is buying at opening price points and who is timing their expenditures around the receipts of their paychecks, indicating liquidity issues.”
In other words, a lot of the Americans who do have jobs are living from paycheck to paycheck, they’re feeling a big pinch in the pocketbook, and when they do spend money, even at Wal-Mart, they’re looking for the lowest possible prices. That gloomy outlook was echoed in the Commerce Department’s report on U.S. Retail Sales, which showed the spending rate dropping for the second month in a row. The last time we saw back-to-back months of declining Retail Sales was in December 2001 and January 2002.
The disturbing economic news wasn’t limited to the home front, however. The World Trade Organization issued a final ruling last week stating that the steel tariffs President Bush imposed in March, 2002 are in violation of global trade regulations. The tariffs, which were put into place to help the domestic steel industry and to protect jobs in the swing-vote states of Ohio, West Virginia, and Pennsylvania, will now have to be removed unless the president wants to risk an all-out trade war—the European Union, along with Norway, Switzerland, China, Brazil, Japan, Korea and New Zealand, have issued a statement in support of the WTO decision, saying that it “leaves the United States with no other choice but to terminate” the illegal tariffs.
And then there’s gold. The precious metal zoomed to $399.40 an ounce for December delivery during Friday’s trading session, before closing at $398.00, up $3.70 an ounce. This puts gold at its highest price level since March, 1996, and a penetration of the $400 mark is virtually inevitable. The story here, of course, is not that the metal itself is suddenly worth more—it’s that the dollar is worth significantly less. The dollar had its worst week in six months last week, falling to $1.1780 against the euro.
As usual, though, the war provides an opportunity to distract attention away from the economy. The daily death toll in Iraq is rising to new highs, and the U.S. is intensifying its attacks against Iraqis, without much to show for it so far. To complicate matters even more, the Center for Strategic and International Studies reported last week that according to CIA briefings, U.S. intelligence has found “no evidence of any Iraqi effort to transfer weapons of mass destruction or weapons to terrorists.” This admission, along with increasing congressional protests about the mismanagement of the war, suggests that the hostilities in Iraq may have a limited life span in terms of their ability to keep the American people distracted. That leaves the Bush administration with two basic choices: either shift economic realties in a way that makes a significant difference to the Americans living from paycheck to paycheck (or trying to survive on no paycheck at all!), or get another war started right away.
None of this means that the opportunities in the stock market are going away, however. Long term, buy-and-hold strategies continue to be extremely dangerous in this environment, but there are still profits waiting for astute traders, especially for those of us who add astrological insights to our market analysis. The possibility of a “sharp market correction” that we mentioned last week is getting stronger and stronger right now, and as far as we’re concerned a trend reversal would be quite welcome. Trending markets are always easier to trade than stagnant ones, and we are always ready to explore new opportunities!


THE WEEK AHEAD

The Q3 earnings season is starting to wind down this week, but there will be a few important earnings reports to keep an eye on, most notably Walt Disney (DIS), Lowes (LOW), The Home Depot (HD), Agilent (A), Hewlett Packard (HPQ), Staples (SPLS), Analog Devices (ADI), Intuit (INTU), The Gap (GPS), and Limited Brands (LTD).
The week’s economic reports will include September Business Inventories, the October Consumer Price Index, October Housing Starts and Building Permits, the October Treasury Budget report, the November Empire State Index, the November report from the Philadelphia Fed, and the Conference Board’s Leading Indicators for October.
Astrologically, of course, we are on our way to next weekend’s solar eclipse, and in the meantime, the hits just keep on coming! Venus conjoins Pluto this week, late on Monday in celestial longitude and mid-day on Tuesday in right ascension. This is a powerful trigger of big stock market moves, suggesting that it’s time to take profits and get ready to explore more short positions, particularly since there’s an eclipse trigger on Monday as well.
We’ll be stepping back and watching the dust settle during most of the trading day on Wednesday, thanks to an extended Void-of-Course Moon. On Thursday, following another eclipse trigger, we have a Mars/Jupiter opposition in play. This is typically an indicator of a market crest, which reinforces the notion that short positions are appropriate. The closing bell on Friday will come with another lunar Void-of-Course period in the works, so take any last-minute market action with a big grain of salt. Have a great week!

GLOBAL EQUITIES MARKETS LAST WEEK

Stock markets around the world headed into negative territory last week, with the Pacific Rim and the broad-based U.S. averages taking the biggest losses. Stocks in Germany, France and Great Britain managed to tread water for the week.

Dow Jones Industrial Average – down 0.42%
Dow Jones Transportation Average – down 1.73%
Dow Jones Utilities Average – down 0.58%
S& P 500 – down 0.27%
NASDAQ Composite Index – down 2.05%
Russell 2000 – down 1.84%
London FTSE-100 – up 0.46%
Paris CAC-40 – down 0.13%
Frankfurt DAX – up 0.39%
Sydney All Ordinaries – down 1.53%
Tokyo Nikkei – down 4.35%
Hong Kong Hang Seng Index – down 0.09%
Singapore Straits Times Index – down 1.83%


FINANCIAL CYCLES MODEL PORTFOLIO


POSITIONS CLOSED DURING THE PREVIOUS WEEK: CCBI, QLGC, PETM, INFA, AMTD.

We closed five portfolio positions during the previous week, with two winners and three losers producing a net profit of $1,150.00.

On November 10 we sold 600 shares of Commercial Capital Bancorp (CCBI) at 18.70, taking a profit of $930.00 (an 9.04% gain in 15 trading days).

On November 10 we sold 200 shares of Qlogic Corporation (QLGC) at 56.10, taking a profit of $990.00 (a 9.68% gain in 19 trading days).

On November 11 we bought to cover 400 shares of Petsmart Inc. (PETM) at 26.55, taking a loss of $320.00 (a 3.11% loss in 6 trading days).

On November 12 we bought to cover 1,000 shares of Informatica Corporation (INFA) at 10.95, taking a loss of $250.00 (a 2.34% loss in 7 trading days).

On November 14 we sold 800 shares of Ameritrade Holding Company, Inc. (AMTD) at 12.25, taking a loss of $200.00 (a 2.00% loss in 7 trading days).

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POSITIONS ADDED TO THE PORTFOLIO DURING THE PREVIOUS WEEK: AACE, CYPB, LSTR, PTEK, AKAM.

We bought 500 shares of Ace Cash Express Inc. (AACE) at 20.02 on 11/10/03, setting our initial stop at 17.65.

We sold short 600 shares of Cypress Bioscience Inc. (CYPB) at 14.00 on 11/10/03, setting our initial buy stop at 14.32.

We sold short 200 shares of Landstar System Inc. (LSTR) at 75.00 on 11/10/03, Setting our initial buy stop at 77.04.

We sold short 1,000 shares of PTEK Holdings Inc. (PTEK) at 9.25 on 11/10/03, setting our initial buy stop at 9.87.

We sold short 1,000 shares of Akamai Technologies Inc. (AKAM) at 11.75 on 11/14/93, setting our initial buy stop at 12.00.

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YEAR-IN-REVIEW MODEL PORTFOLIO ACTIVITY

Since the beginning of the year we have had a total of 148 completed trades, with 85 winners and 63 losers bringing us a total net profit of $49,421.00. The largest profit for a single trade has been $9,240.00; the largest single-trade loss has been $900.00; the average profit per trade has been $333.93. The mean duration of our trades has been 10.5 trading days.

During 2002 we had a total of 195 completed trades, with 119 winners, 74 losers, and 2 break-even trades bringing us a total net profit of $50,956.00. The largest profit for a single trade was $5,100.00; the largest single-trade loss was $1,055.00; the average profit per trade was $261.31. The mean duration of our trades was 12.7 trading days.

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CURRENT POSITIONS IN THE MODEL PORTFOLIO

Ace Cash Express Inc. (AACE) – bought 500 shares at 20.02 on 11/10/03; currently 20.45. Raise stop to 19.97.

Akamai Technologies Inc. (AKAM) – sold short 1,000 at 11.75 on 11/14/93; currently 10.97. Buy stop set at 12.00.

American Power Conversion (APCC) – bought 500 shares at 20.50 on 11/03/03; currently 21.43. Raise stop to 21.25.

Cypress Bioscience Inc. (CYPB) – sold short 600 shares at 14.00 on 11/10/03; currently 13.77. Lower buy stop to 14.26.

Landstar System Inc. (LSTR) – sold short 200 shares at 75.00 on 11/10/03; became 400 shares at a cost basis of 37.50 following 2-for-1 split. Currently 36.78. Lower buy stop to 38.12.

PTEK Holdings Inc. (PTEK) – sold short 1,000 shares at 9.25 on 11/10/03, setting our initial buy stop at 9.87; currently 8.83. Lower buy stop to 9.55.

Staples, Inc. (SPLS) – sold short 400 shares at 27.25 on 11/03/03; currently 25.46. Lower buy stop to 26.81.

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STRONGEST MARKET SECTORS LAST WEEK

Silver; Long-Term Care Facilities; Major Drug Manufactureres; Specialized Health Services; Medical Practitioners.

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WEAKEST MARKET SECTORS LAST WEEK

Computer Based Systems; Music & Video Stores; Internet Information Providers; Internet Software & Storage; Data Storage Devices.

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KEY ASTROLOGICAL EVENTS THIS WEEK

November 16
Mercury semisextile Poseidon 01:22 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Venus 01:35 EST
Mars in 24th harmonic to Uranus 04:55
Heliocentric Mercury in 24th harmonic to Heliocentric Pluto 07:19 EST
Venus square Mars in right ascension 10:32 EST
Heliocentric Venus semisextile Heliocentric Pluto 11:48 EST
Sun semisquare Apollon in right ascension 13:36 EST
Heliocentric Mercury trine Heliocentric Jupiter 16:01 EST
Heliocentric Mercury sextile Heliocentric Poseidon 17:41 EST
True Lunar Node direct station 22:06 EST

November 17
Heliocentric Mercury sesquiquadrate Heliocentric Admetos 03:24 EST
Heliocentric Venus sesquiquadrate Heliocentric Jupiter 03:55 EST
Hades semisextile Vulcanus 06:31 EST
Void-of-Course Moon 07:38 – 09:36 EST
Venus square Jupiter in right ascension 08:15 EST
Heliocentric Mercury square Heliocentric Zeus 08:20 EST
Uranus trine Kronos in right ascension 08:27 EST
Mercury sesquiquadrate Vulcanus 09:34 EST
Sun quincunx Hades in right ascension 09:59 EST
Mercury contraparallel Kronos in right ascension 10:35 EST
Sun conjunct 05/16/03 Lunar Eclipse Point 11:04 EST
Mercury conjunct Cupido 11:25 EST
Mercury contraparallel Kronos 11:37 EST
Sun semisquare Zeus in right ascension 12:08 EST
Mercury sextile Zeus 12:51 EST
Heliocentric Mercury opposition Heliocentric Saturn 13:01 EST
Mercury semisquare Apollon 14:41 EST
Heliocentric Mars parallel Heliocentric Uranus 16:04 EST
Heliocentric Mercury semisextile Heliocentric Cupido 16:08 EST
Mercury conjunct Cupido in right ascension 18:41 EST
Mercury semisquare Apollon in right ascension 19.26 EST
Mars sextile Chiron 20:41 EST
Venus conjunct Pluto 20:50 EST
Heliocentric Venus trine Heliocentric Admetos 23:47 EST

November 18
Venus quincunx True Lunar Node in right ascension 00:47 EST
Mercury opposition 05/31/03 Solar Eclipse Point 06:14 EST
Heliocentric Venus opposition Heliocentric Vulcanus 06:31 EST
Heliocentric Venus quincunx Heliocentric Hades 07:56 EST
Mercury sextile Zeus in right ascension 09:53 EST
Venus conjunct Pluto in right ascension 12:00 EST
Heliocentric Earth sesquiquadrate Heliocentric Mercury 12:58 EST
Venus semisquare Poseidon in right ascension 13:30 EST
Heliocentric Venus square Heliocentric Apollon 14:32 EST
Heliocentric Earth semisextile Heliocentric Mars 16:03 EST
Heliocentric Venus semisquare Heliocentric Cupido 22:46 EST

November 19
Mercury sextile Neptune 02:44 EST
Venus quincunx Admetos in right ascension 03:03 EST
Venus quincunx True Lunar Node 03:30 EST
Heliocentric Jupiter sextile Heliocentric Poseidon 06:19 EST
Void-of-Course Moon 09:15 – 14:42 EST
Venus semisquare Poseidon 15:27 EST
Sun trine Vulcanus in right ascension 16:54 EST
Mercury sesquiquadrate Vulcanus in right ascension 19:53 EST
Mercury parallel Venus in right ascension 22: 41 EST
Mercury parallel Venus 22:51 EST

November 20
Mercury conjunct 12/04/02 Solar Eclipse Point 00:35 EST
Mars oppositon Jupiter in right ascension 00:39 EST
Sun sesquiquadrate Saturn 04:52 EST
Venus quincunx Admetos 07:39 EST
Mars opposition Jupiter 08:57 EST
Mercury quincunx Saturn 11:24 EST
Heliocentric Mercury semisquare Heliocentric Uranus 12:49 EST
Venus sextile Apollon in right ascension 17:14 EST
Cupido semisquare Apollon in right ascension 21:11 EST

November 21
Venus direct station 1-year anniversary
Heliocentric Mercury conjunct Heliocentric Chiron 00:47 EST
Sun in 24th harmonic to Mercury 02:01 EST
Venus opposition Hades 04:30 EST
Venus quincunx Vulcanus 05:13 EST
Venus opposition Hades in right ascension 06:40 EST
Mars sextile True North Node in right ascension 09:25 EST
Venus in 24th harmonic to Cupido 09:57 EST
Heliocentric Venus in 24th harmonic to Heliocentric Neptune 10:43 EST
Heliocentric Mercury semisextile Heliocentric Pluto 11:49 EST
Sun square Uranus 12:14 EST
Venus sextile Apollon 12:50 EST
Void-of-Course Moon 14:44 – 16:24 EST
Mars contraparallel Jupiter 18:17 EST
Heliocentric Venus square Heliocentric Mars 18:29 EST
Mars contraparallel Jupiter in right ascension 18:29 EST
Mercury sextile Neptune in right ascension 20:32 EST
Pluto semisquare Poseidon in right ascension 22:07 EST
Heliocentric Mercury sesquiquadrate Heliocentric Jupiter 22:58

November 22
Mercury semisextile Chiron 02:08 EST
Mercury quincunx Saturn in right ascension 03:29 EST
Heliocentric Mercury trine Heliocentric Admetos 06:29 EST
Heliocentric Mercury opposition Heliocentric Vulcanus 10:01 EST
Heliocentric Mercury quincunx Heliocentric Hades 10:48 EST
Sun enters Sagittarius 12:43 EST
Sun semisquare Chiron 14:11 EST
Heliocentric Mercury square Heliocentric Apollon 14:11 EST
Sun square 04/19/04 Solar Eclipse Antiscion 17:04 EST
Heliocentric Mercury semisquare Heliocentric Cupido 18:30 EST
Mercury square Jupiter 22:10 EST

November 23
True Lunar Node retrograde station 00:19 EST
Venus quincunx Vulcanus in right ascension 01:19 EST
Heliocentric Venus enters Aquarius 01:38 EST
Heliocentric Mars parallel Heliocentric Saturn 02:23 EST
Mars sesquiquadrate Poseidon in right ascension 02:41 EST
Mars square Pluto in right ascension 04:24 EST
Sun sesquiquadrate Saturn in right ascension 04:41 EST
Heliocentric Earth semisextile Heliocentric Kronos 05:33 EST
Venus semisquare Neptune 08:37 EST
Mercury semisextile Chiron in right ascension 10:47 EST
Heliocentric Venus quincunx Heliocentric Kronos 12:24 EST
Void-of-Course Moon 14:27 – 16:02 EST
Cupido sextile Zeus 16:00 EST
Sun quincunx Kronos 16:01 EST
Solar Eclipse New Moon 17:48 EST
Mercury square Mars 22:15 EST


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STOCKS TO WATCH: CRDN, MRBA, STRA, USNA, WITS.

Ceradyne Inc. (CRDN)
First Trade Date: 07/18/1984; 10:00 a.m.
Trading Strategy: With Jupiter crossing the CRDN First-Trade Ascendant, our expectation is for a furthur price run-up to add to this stock’s already dramatic gains. With the transiting True Lunar Node square the CRDN First-Trade Mercury, this stock clearly has quite a following—but transiting Saturn is conjunct First-Trade Vulcanus, so we may see some surprising volatility! If we get a close above the Saturn line at 46.37, it will be very bullish for this stock and we will add a long position, setting our initial stop on the Uranus line at 32.91 before tightening and trailing it. If CRDN doesn’t break 46.37, however, we will short this stock near the end of this week, setting our initial buy stop at 48.51.

Marimba Inc. (MRBA)
First Trade Date: 04/30/1999; 09:30 a.m.
Trading Strategy: Here’s a pretty straightforward story: a stock that is exploding upward as Jupiter crosses the First-Trade IC, with Mars moving over the Midheaven as an added kicker. These transits won’t last long, and we don’t see much else going on to hold it up. We plan to sell this stock short this week, setting our initial buy stop at 6.01.
Strayer Education Inc. (STRA)
First Trade Date: 07/25/1996; 09:30 a.m.
Trading Strategy: STRA has Jupiter crossing its First-Trade Ascendant this week, adding extra power to an already powerful performance. We can anticipate some price pull-backs for this stock in the coming weeks, but there’s one interesting factor that should serve to sustain the upward trend for STRA—transiting Jupiter is forming a sesquiquadrate to its First-Trade Uranus. We’re looking for some extra volatility here, and we suspect that the upside potential is strong enough to warrant a long position this week. We will set our initial stop at 100.15.

USANA Health Science Inc. (USNA)
First Trade Date: 07/25/1996; 09:30 a.m.
Trading Strategy: Here’s a little déjà vu—USNA has the same First-Trade horoscope as STRA! These are clearly different stocks, however, and USNA is trading at about one-third the price that STRA is. Probably because they are in different industries while boasting the same First-Trade chart, the two stocks behave very differently. In this case, we’re looking for a short-term price run-up during the next couple of weeks. We’ll put on a long position, but we will trail our stop very closely if the trade goes in our favor. Our initial stop will be set at 30.25.

Witness Systems, Inc. (WITS)
First Trade Date: 02/10/2000; 09:30 a.m.
Trading Strategy: Saturn is moving over the WITS IC right now, but the price of the stock has just spiked upward very boldly. If Saturn provides some solid support here, it’s worth a long position, although we may have to take profits rather quickly. A geocentric Saturn line set to reflect the current transiting position at 10.275 defines the trading action for this stock precisely, so we will set our initial stop correspondingly at 7.17.

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FINANCIAL CYCLES (ISSN 1055-8527) is published by Taylor-Bost Consulting and edited by Tim Bost at Post Office Box 1657, Sarasota, FL 34230-1657 USA. Phone: 941-953-3545. Fax: 941-953-3732. Email: timbost@pipeline.com. Entire contents copyright 2003 Timothy L. Bost. No portion of this Weekly Email Update or its printed version may be reproduced without the publisher's written permission. Subscriptions to FINANCIAL CYCLES are $39.00 per month for weekly updates by email or fax, payable by monthly billing to a major credit card. Advance payment options (by credit card, check, or money order) are $228 for 6 months, $432 for 1 year or $815 for two years. All subscriptions are payable in US funds only— Visa, MasterCard, American Express, Diners Club, and Discover/Novus accepted; please make checks or money orders payable to Taylor-Bost.

By providing a source of independent market analysis, the purpose of FINANCIAL CYCLES is to foster the growth of person-centered business and investment astrology; to enhance the development and dissemination of financial literacy and prosperity consciousness; and to explore the use of technical analysis and financial astrology in promoting an esoteric spiritual understanding of economic trends, geocosmic cycles, geopolitical events, and market movements. FINANCIAL CYCLES is a general interest publication which is prepared from astrological information, news reports, cycle projections, and market observations which are believed to be accurate and reliable, but which cannot be guaranteed. Portfolio and trading reports in this publication do not include taxes and transaction fees, which should be taken into consideration by prospective traders and investors. Even with accurate information, past performance is no guarantee of future results. Speculation in securities and commodities involves considerable financial risk, and readers who plan to invest or speculate in securities or commodities mentioned in FINANCIAL CYCLES have the complete responsibility for making themselves fully aware of all the risks involved before they invest. The editor may or may not have positions in the securities and commodities discussed in this newsletter, and the information in FINANCIAL CYCLES should in no way be understood or construed as a solicitation or an offer to buy or sell any products or securities, nor should the material published in this newsletter be considered buy/sell advice.

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posted by Tim Bost @ 11/16/2003 11:39:08 PM