FINANCIAL CYCLES WEEKLY UPDATE #0350 – December 14-20, 2003 with TIM BOST

COMMENT: Sometimes the language of astrology is so obvious that we tend to overlook it or dismiss it altogether, focusing instead on more obscure phenomena or interpretations and failing to see the forest for the trees. At least we overlooked the obvious this weekend, when Venus met Uranus for its annual heliocentric conjunction. We didn’t give it much attention in our forecasting and projections, but this particular celestial event nevertheless set the tone for events in the markets and in the world at large.
Traditional astrology tells us that Venus is associated with refinement, peace, beauty, and financial well-being—in short, good things and improvements in general. Uranus, on the other hand, is all about surprises—events that are explosive, unusual or simply unexpected. So the simplest way of talking about the Venus/Uranus conjunction is just to say that it marks a time in which things seem surprisingly good for a change. And that’s exactly what happened.
There was surprisingly good news in the markets, with the Dow Industrials closing above the 10,000 mark for the first time since May, 2002 as the blue chip index plugs along toward its first positive year since 1999. Coca-Cola (KO) announced that it is “poised for a strong year in 2004,” with earnings growing by as much as 12 percent. Even the NASDAQ managed to post a modest gain for just the second time in five weeks. The winter weather sent oil futures higher, too, with crude breaking above the $33 per barrel mark and oil-related stocks gaining momentum.
The upbeat mood prevailed in many foreign markets, too, with Hong Kong’s Hang Seng and the Frankfurt DAX both hitting new highs for the year. The euro broke above the $1.23 mark against the dollar, and gold closed above $400 an ounce, setting a new 7-year high.
And, of course, the capture of Saddam Hussein in Iraq was a big positive surprise, too. Although it certainly doesn’t mean that the war and terrorism concerns will go away, it provided a much-needed boost for the Bush Administration. It’s likely to be a boost for the markets, too, not only in the U.S. but around the globe as well.
A word of caution is appropriate here, however. Although the enthusiasm for equities is likely to continue through the end of the year and into early January as well, too much of a speculative bubble now could make for an extremely treacherous trading situation, demanding well-thought-out trading plans and a lot of circumspection. And, we might add, not all of last week’s surprises were particularly positive ones.
The Consumer Confidence figures from the University of Michigan were a notable case in point. The index stood at 93.7 in November, and analysts were expecting the December number to hit 96.0 or even higher. Instead, the December index plunged to 89.6, with the Current Conditions Sentiment component diving from 102.5 in November down to 93.6. The bottom line here is that even though the pundits can see some increasingly plausible signs of economic improvement, the general public doesn’t believe it yet, and are thus likely to keep a tight reign on their spending. And with the dollar in a nose-dive, the prices for foreign-made goods are starting to edge up, suggesting that inflation problems may not be far behind.
Speaking of inflation, it was amusing to watch reaction to the Federal Reserve’s meeting last week. In our last issue we had noted that “The Federal Reserve’s Open Market Committee meets on Tuesday with Mars semisquare Neptune, so any actions it takes are likely to provoke more confusion than confidence. The consensus is that the Fed will leave short-term interest rates unchanged, but as usual the innuendo and implications will be given far more weight by the pundits than they actually deserve. Look for the sages and spin doctors to have their say Tuesday evening, but with a void-of-course Moon at work then it will be wise not to take their pronouncements too seriously.”
The Open Market Committee did leave rates unchanged, of course, but exactly what did that mean? The Chicago Tribune told its readers that the ”Fed Holds Rates But Alters Attitude,” thanks to the language that was used in Tuesday afternoon’s statement. The Los Angeles Times confirmed that the “Fed Keeps Low Rate, Hints at Shift Coming,” with a shift presumably meaning higher interest rates in the future. The New York Times agreed, printing its story on the Fed’s actions under a headline reading “Fed Keeps Rates Steady but Paves Way for Rise.” If you read the Washington Post, however, you might have gotten a different impression, since the headline there said the “Fed Indicates Boost In Rates Is Unlikely.”
Apparently more traders read the Washington Post than the other papers, since Wall Street’s consensus by the end of the week was that the Fed had done a good thing. But as we were saying, it’s wise not to take any of these pronouncements too seriously.


THE WEEK AHEAD

There’s a lot of action in the week ahead that should command attention from the markets. Only about 220 companies will announce earnings, but with names like Best Buy (BBY), General Mills (GIS), FedEx (FDX), Nike (NKE), and Oracle (ORCL) on the list, a surprise from any of them could be enough to shake the cage for traders. On the economic front, we’ll get the Consumer Price Index for November, Housing Starts, Building Permits, Industrial Production, Capacity Utilization, and the Leading Indicators from the Conference Board. We’re also starting to see an increasing flow of IPO’s.
The week’s astrology brings us two planets changing signs (Mars into Aries on 12/16; Venus into Aquarius in right ascension on 12/19 and in celestial longitude on 12/21) and a void-of-course Moon on Tuesday afternoon that should confuse trading a bit. The big event, however, is the Mercury retrograde station in the middle of the trading day on Wednesday. The next three weeks of the Mercury cycle could set up a short-term counter-trend to the downside, although the market has so much forward momentum now that it’s hard to imagine too much of a correction at this point. Even if a correction doesn’t come, however, the trading activity around the Mercury station on 12/17 should be particularly volatile.
Have a great week!


GLOBAL EQUITIES MARKETS LAST WEEK

Except for London and some of the Pacific markets, stocks moved higher around the world last week. Hong Kong saw a particularly impressive upward move, and the Frankfurt DAX set another new high for the year.

Dow Jones Industrial Average – up 1.82%
Dow Jones Transportation Average – up 2.50%
Dow Jones Utilities Average – up 0.17%
S& P 500 – up 1.19%
NASDAQ Composite Index – up 0.58%
Russell 2000 – up 1.59%
London FTSE-100 – down 0.70%
Paris CAC-40 – up 0.39%
Frankfurt DAX – up 0.48%
Sydney All Ordinaries – down 0.49%
Tokyo Nikkei – down 1.96%
Hong Kong Hang Seng Index – up 2.27%
Singapore Straits Times Index – down 0.30%


FINANCIAL CYCLES MODEL PORTFOLIO


POSITIONS CLOSED DURING THE PREVIOUS WEEK: AMKR, CMTL, USNA, WITS, SGMA, KOSP.

We closed six portfolio positions during the previous week, with three winners and three losers producing a net loss of $476.00.

On December 8 we sold 500 shares of Amkor Technology, Inc. (AMKR) at 18.76, taking a loss of $120.00 (a 1.26% loss in 7 trading days).

On December 8 we sold 300 shares of Comtech Telecommunications Corporation (CMTL) at 30.93, taking a loss of $546.00 (a 5.56% loss in 3 trading days).

On December 8 we sold 300 shares of USANA Health Science Inc. (USNA) at 33.50, taking a profit of $75.00 (a 0.75% gain in 14 trading days).

On December 8 we sold 1,000 shares of Witness Systems, Inc. (WITS) at 9.06, taking a profit of $1,060.00 (a 13.25% gain in 14 trading days).

On December 9 we bought to cover 300 shares of Sigmatron International Inc. (SGMA) at 33.75, taking a loss of $1,170.00 (a 13.07% loss in 6 trading days).

On December 10 we sold 300 shares of Kos Pharmaceuticals Inc. (KOSP) at 43.00, taking a profit of $225.00 (a 1.78% gain in 11 trading days).

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POSITIONS ADDED TO THE PORTFOLIO DURING THE PREVIOUS WEEK: ROAD, XICO, RFMI.

We bought 200 shares of Roadway Corporation (ROAD) at 52.75 on 12/08/03, setting our initial stop at 50.71.

We sold short 1,000 shares of Xicor Inc. (XICO) at 11.25 on 12/09/03, setting our initial buy stop at 13.33.

We bought 1,000 shares of RF Monolitihics Inc. (RFMI) at 9.25 on 12/11/03, setting our initial stop at 8.25.

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YEAR-IN-REVIEW MODEL PORTFOLIO ACTIVITY

Since the beginning of 2003 we have had a total of 166 completed trades, with 95 winners and 71 losers bringing us a total net profit of $51,080.00. The largest profit for a single trade has been $9,240.00; the largest single-trade loss has been $1,170.00; the average profit per trade has been $307.71. The mean duration of our trades has been 10.3 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

Aspect Communications (ASPT) – sold short 500 shares at 14.25 on 11/26/03; currently 14.09. Lower buy stop to 14.55.

Celegene Corporation (CELG) – sold short 200 shares at 47.50 on 12/01/03; currently 45.59. Lower buy stop to 46.00.

Packeteer Inc. (PKTR) – sold short 500 shares at 21.50 on 12/01/03; currently 18.02. Lower buy stop to 19.55.

RF Monolitihics Inc. (RFMI) – bought 1,000 shares at 9.25 on 12/11/03; currently 9.40. Raise stop to 8.95.

Roadway Corporation (ROAD) – bought 200 shares at 52.75 on 12/08/03; currently 53.35. Raise stop to 52.20.

Xicor Inc. (XICO) – sold short 1,000 shares at 11.25 on 12/09/03; currently 11.26. Lower buy stop to 11.82.



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ECLIPSE PORTFOLIO

Our Eclipse Portfolio is an experiment in longer-term positions in the stock market, as opposed to the more active trading positions in the Financial Cycles Model Portfolio, which we are currently holding for an average of 10.3 trading days. Although a long-term, “buy and hold” strategy leaves us very concerned about capital preservation and portfolio safety given the current market conditions, we are always seeking profitable investment strategies requiring less time and energy than an active approach to trading.
The stocks in the Eclipse Portfolio all have First-Trade horoscopes featuring a Sun that was directly impacted by the November 23, 2003 solar eclipse. The portfolio includes only long positions, with stop-loss points set liberally to allow for broader price fluctuations while providing a safety net to protect the capital in the portfolio. When positions in the Eclipse Portfolio become sufficiently profitable we raise our stops to lock in profits accordingly, but our intention is to let our winners run as long as possible.
All the stocks in the Eclipse Portfolio were purchased on November 24, 2003, with a total initial investment of $21,345.00. On December 9, 2003, we closed two losing positions that hit our stops—Network Appliance, Inc. (NTAP – bought at 22.25; sold at 19.65) and Silicon Storage Technology, Inc. (SSTI – bought at 13.00; sold at 11.87). In closing these positions, we took a net loss of $859.00 on the trades and added $7,491.00 cash to the portfolio.
The current equity in the Eclipse Portfolio is $21,116.00, for a loss of 1.07% since the portfolio’s inception.

J. B. Hunt Transportation Services, Inc. (JBHT) – bought 200 shares at 25.25 on 11/24/03; currently 26.40. Stop set at 25.75.

Medtronic, Inc. (MDT) – bought 100 shares at 44.25 on 11/24/03; currently 48.05. Stop set at 45.00.

Teledyne Technologies, Inc. (TDY) – bought 200 shares at 17.60 on 11/24/03; currently 17.70. Raise stop to 16.75.

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STRONGEST MARKET SECTORS LAST WEEK

General Entertainment; Recreational Vehicles; Diversified Entertainment; Steel & Iron; Synthetics.

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WEAKEST MARKET SECTORS LAST WEEK

Internet Service Providers; Auto Parts Stores; Toys & Games; Long Distance Carriers; Integrated Circuits.

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KEY ASTROLOGICAL EVENTS THIS WEEK

December 14
Venus contraparallel Kronos 00:12 EST
Venus contraparallel Kronos in right ascension 02:17 EST
Heliocentric Mercury semisquare Heliocentric Venus 02:34 EST
Jupiter square Pluto in right ascension 03:48 EST
Heliocentric Mercury square Heliocentric Chiron 04:45 EST
Mars sesquiquadrate 11/09/03 Lunar Eclipse Antiscion 05:41 EST
Heliocentric Earth semisextile Heliocentric Admetos 05:48 EST
Venus trine Admetos 07:01 EST
Saturn quincunx Neptune 07:47 EST
Heliocentric Mercury trine Heliocentric Pluto 09:18 EST
Heliocentric Venus semisquare Heliocentric Chiron 09:54 EST
Heliocentric Mercury parallel Heliocentric Venus 11:38 EST
Void-of-Course Moon 15:05 – 16:07 EST
Heliocentric Earth semisextile Heliocentric Vulcanus 16:12 EST
Sun sextile Apollon in right ascension 18:58 EST
Heliocentric Earth conjunct Heliocentric Hades 19:12 EST
Heliocentric Mercury semisextile Heliocentric Admetos 19:15 EST
Sun opposition Hades 19:20 EST
Sun opposition Hades in right ascension 20:45 EST
Heliocentric Mercury square Heliocentric Vulcanus 21:11 EST
Heliocentric Mercury sextile Heliocentric Hades 21:45 EST
Heliocentric Earth sextile Heliocentric Mercury 22:20 EST
Heliocentric Mercury sesquiquadrate Heliocentric Jupiter 22:44 EST
Heliocentric Mercury opposition Heliocentric Apollon 23:33 EST

December 15
Venus opposition Vulcanus in right ascension 00:34 EST
Sun quincunx Vulcanus 00:56 EST
Venus quincunx Hades 01:30 EST
Heliocentric Mercury sesquiquadrate Heliocentric Cupido 02:10 EST
Sun parallel Venus 02:37 EST
Heliocentric Earth trine Heliocentric Apollon 04:49 EST
Venus opposition Vulcanus 06:09 EST
Mars semisextile Uranus 10:32 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Mars 16:40 EST
Heliocentric Venus trine Heliocentric Poseidon 17:27 EST
Sun sextile Apollon 21:10 EST
Pluto quincunx True Lunar Node 22:05 EST
Venus square Apollon 22:51 EST

December 16
Mars enters Aries in right ascension 01:57 EST
Sun in 24th harmonic to Cupido 03:15 EST
Venus semisquare Cupido 03:52 EST
Heliocentric Mercury enters Taurus 05:58 EST
Sun semisextile Venus 06:35 EST
Mars enters Aries 08:23 EST
Heliocentric Earth in 24th harmonic to Heliocentric Saturn 09:02 EST
Heliocentric Mercury sextile Heliocentric Kronos 09:12 EST
True Lunar Node trine Chiron in right ascension 09:35 EST
Void-of-Course Moon 12:49 – 22:46 EST
True Lunar Node direct station 13:01 EST
Heliocentric Mercury sextile Heliocentric Uranus 14:46 EST
Heliocentric Venus sesquiquadrate Heliocentric Vulcanus 17:38 EST
Heliocentric Venus quincunx Heliocentric Zeus 20:04 EST
Heliocentric Mars square Heliocentric Neptune 21:30 EST

December 17
Heliocentric Venus opposition Heliocentric Jupiter 01:23 EST
Heliocentric Venus sesquiquadrate Heliocentric Apollon 01:44 EST
Heliocentric Mercury sesquiquadrate Heliocentric Pluto 02:11 EST
Sun quincunx Vulcanus in right ascension 05:43 EST
Mercury contraparallel Kronos 06:27 EST
Heliocentric Mercury opposition Heliocentric Poseidon 06:40 EST
Mercury contraparallel Kronos in right ascension 07:47 EST
Heliocentric Jupiter semisquare Heliocentric Apollon 08:41 EST
Heliocentric Venus square Heliocentric Cupido 10:50 EST
Mercury retrograde station in right ascension 10:54 EST
Mercury retrograde station 11:02 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Admetos 11:31 EST
Heliocentric Mercury semisquare Heliocentric Hades 13:52 EST
Heliocentric Mercury quincunx Heliocentric Zeus 13:59 EST
Sun parallel Mercury 14:36 EST
Heliocentric Mercury trine Heliocentric Jupiter 15:36 EST
Heliocentric Mercury quincunx Heliocentric Cupido 17:59 EST
Mars square Kronos 19:11 EST
Mars square Kronos in right ascension 20:29 EST
Heliocentric Venus trine Heliocentric Saturn 20:37 EST
Heliocentric Mercury sextile Heliocentric Saturn 20:37 EST
Heliocentric Mercury sextile Heliocentric Venus 20:37
Heliocentric Mercury contraparallel Heliocentric Jupiter 21:10 EST
Hades trine Apollon in right ascension 21:27 EST
Heliocentric Mercury parallel Heliocentric Hades 23:49 EST

December 18
Venus in 24th harmonic to Neptune 00:49 EST
Heliocentric Mercury contraparallel Heliocentric Cupido 02:13 EST
Heliocentric Earth semisquare Heliocentric Mercury 03:49 EST
Heliocentric Mercury parallel Heliocentric Uranus 08:45 EST
Sun semisquare Neptune 10:07 EST
Heliocentric Mercury square Heliocentric Neptune 10:21 EST
Mars semisquare 11/09/03 Lunar Eclipse Point 10:41 EST
Heliocentric Mercury parallel Heliocentric Saturn 13:20 EST
Heliocentric Mercury conjunct Heliocentric 14:14 EST
Mercury in 24th harmonic to Venus 21:55 EST
Heliocentric Mercury semisquare Heliocentric Kronos 23:04 EST

December 19
Void-of-Course Moon 01:39 – 02:20 EST
Venus enters Aquarius in right ascension 01:52 EST
Sun in 24th harmonic to Mercury 08:29 EST
Venus contraparallel Saturn 10:58 EST
Venus contraparallel Saturn in right ascension 11:00 EST
Heliocentric Mercury trine Heliocentric Chiron 11:37 EST
Heliocentric Mercury contraparallel Heliocentric Mars 15:13 EST
Heliocentric Mercury quincunx Heliocentric Pluto 15:15 EST
Heliocentric Earth sesquiquadrate Heliocentric Neptune 17:39 EST
Venus quincunx Kronos in right ascension 18:15 EST
Mars semisextile Uranus in right ascension 21:21 EST
Heliocentric Venus semisextile Heliocentric Neptune 23:32 EST
Venus contraparallel Hades 23:35 EST
Heliocentric Mercury conjunct Heliocentric Admetos 23:58 EST

December 20
Venus contraparallel Hades in right ascension 01:04 EST
Heliocentric Mercury sextile Heliocentric Vulcanus 01:42 EST
Heliocentric Mercury semisextile Heliocentric Hades 02:14 EST
Heliocentric Mercury sesquiquadrate Heliocentric Zeus 02:21 EST
Heliocentric Mercury quincunx Heliocentric Apollon 03:49 EST
Heliocentric Mercury contraparallel Heliocentric Saturn 05:23 EST
Heliocentric Mercury semisquare Heliocentric Saturn 09:05 EST
Heliocentric Mercury contraparallel Heliocentric Uranus 09:53 EST
True Lunar Node retrograde station 10:56 EST
Venus semisextile Uranus in right ascension 14:49 EST
Heliocentric Mercury parallel Heliocentric Cupido 16:06 EST
Heliocentric Mercury contraparallel Heliocentric Hades 18:24 EST
Venus semisextile Uranus 18:41 EST
Mars semisquare True Lunar Node in right ascension 20:11 EST
Heliocentric Mercury parallel Heliocentric Jupiter 21:00 EST

December 21
Mercury semisextile Neptune 00:18 EST
Sun semisquare Neptune in right ascension 00:20 EST
Venus enters Aquarius 01:32 EST
Venus sextile Mars in right ascension 01:59 EST
Void-of-Course Moon 02:43 – 03:16 EST
Heliocentric Earth semisextile Heliocentric Mercury 03:23 EST
Heliocentric Mercury enters Gemini 07:07 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Mars 07:31 EST
Heliocentric Mercury semisextile Heliocentric Kronos 10:05 EST
Mercury contraparallel Saturn 10:40 EST
Pluto semisquare 5/16/03 Lunar Eclipse Antiscion 12:56 EST
Heliocentric Mercury square Heliocentric Uranus 15:19 EST
Heliocentric Venus sextile Heliocentric Mars 16:29 EST
Venus quincunx Kronos 16:51 EST
Sun sextile Uranus 18:34 EST
Heliocentric Mercury sesquiquadrate Heliocentric Chiron 22:18 EST
Mercury contraparallel Hades 23:57 EST


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STOCKS TO WATCH: CINF, CYTC, LSCP.

Cincinnati Financial (CINF)
First Trade Date: 03/09/1971; 10:00 a.m.
Trading Strategy: With Jupiter currently in opposition to the CINF First-Trade Sun, the price of its shares has been going up recently. We’ve been watching the transiting Lunar Node, however, and noting that it’s about to conjoin the First-Trade Saturn/Hades conjunction. That dynamic suggests that resistance is likely to hold for this stock, although with transiting Apollon conjunct First-Trade Cupido the longer-term possibilities look quite favorable. A heliocentric 24 Cupido price line and a geocentric Jupiter line at 24.615 give us some key information about the way the First-Trade chart for CINF translates into price action; if we get a close above the Cupido line at 41.66 this week, we will immediately add a long position, setting our initial stop at 39.66. If that breakout fails to occur, however, we will add a short position toward the end of the week, setting our initial buy stop at 42.11.

Cytyc Corporation (CYTC)
First Trade Date: 03/08/1996; 09:30 a.m.
Trading Strategy: Transiting Jupiter is in opposition to the CYTC First-Trade Sun/Mars conjunction right now, adding tremendous energy to this stock. We’ve examined First-Trade geocentric planetary lines at 34.75 for Mars, 24.31 for Pluto, and 23.91 for Cupido to check this stock’s potential. After finding support on the Cupido line, CYTC just broke out above the Pluto line in the past two trading sessions, so Mars is ready to carry the price upward. Our plan is to add an immediate long position in CYTC to the Model Portfolio, setting our initial stop at 13.13.

Laserscope (LSCP)
First Trade Date: 11/30/1989, 09:30 a.m.
Trading Strategy: This stock’s First-Trade chart suggests that geocentric planetary lines for Uranus at 27.39 and for Neptune at 28.9 should provide a trading structure; they do help define critical support and resistance for the stock. During this past week, LSCP failed in an attempt to break out above those lines, hitting some strong resistance on heavy trading volume. Saturn is currently crossing the LSCP First-Trade Descendant, however, which is providing a restrictive dynamic that will soon pass. As soon as we get two consecutive closes above the Neptune line at 16.66, we will add a long position in LSCP to the Model Portfolio, setting our initial stop at 13.90.


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 @ 12/14/2003 10:52:28 PM