FINANCIAL CYCLES WEEKLY UPDATE #0351 – December 21-27, 2003 with TIM BOST

COMMENT: “It’s the goat minding the cabbage patch,” said John Bogle, the founder of mutual fund company Vanguard Group, when he learned that John A. Thain, the president of Goldman Sachs Group Inc., had been appointed last week to become the new CEO of the New York Stock Exchange on January 15. “I don’t think you can be more of a consummate insider than Goldman Sachs.”
Thain, like interim NYSE chairman and CEO John Reed, is on the board of trustees for MIT. He is also on the boards of the Urban League and Howard University and is a member of the French-American Foundation and the Trilateral Commission. He owns roughly $225 million worth of Goldman Sachs stock, and will be giving up a much more lucrative position to take over the reigns of the NYSE with its paltry $4 million a year salary. Ironically, his appointment came just days after the California Public Employees Retirement System filed a class-action lawsuit alleging that Goldman Sachs and its subsidiary Spear Leeds & Kellogg have been given special trading privileges unavailable to other investors because of their close ties to the NYSE.
“My goal is to restore investor confidence,” Mr. Thain said as he accepted the appointment. But given his background and the role that Goldman Sachs has played in exploiting its favored status, it somehow seems unlikely that his appointment alone will be enough to do the trick.
That’s not to say that enhancements to investor confidence would necessarily be a good thing in the first place. A recent survey showed that an overwhelming percentage of small investors are unwilling to take their money out of mutual funds even though they feel some concern about the current fund scandals and investigations. And with the persistence of the bullish sentiment we have been seeing in the stock market recently, today’s cautious crowd of investors could easily become the victims of tomorrow’s speculative bubble. So maybe it would be for the best if investor confidence were not completely restored, at least not just yet.

THE WEEK AHEAD

We’re looking for a week that focuses more on holiday festivities than on market action, with lots of traders taking time off and less than 100 companies reporting earnings. The best-known names among those that will be reporting include ConAgra (CAG) and Micron Technology (MU).
In the days before Christmas we’ll get a few economic reports to take a look at, including Personal Income, Personal Spending, Durable Goods and New Home Sales for November, as well as revised December numbers for the University of Michigan Consumer Confidence Index and revised Q3 numbers for the GDP.
The astrology coming up includes Venus moving into Aquarius, the Winter Solstice, a lunar perigee, a New Moon, and plenty of action from the transneptunian planets. The planetary dynamics at play vary in their intensity and their ability to drive the markets, but almost without exception they support a bullish scenario for the weeks ahead.
The markets will be closing early on Christmas Eve, December 24. But there’s also a void-of-course Moon throughout that entire trading day, so it will be much wiser to devote the time to holiday parties instead. Have a great week and a wonderful holiday!


GLOBAL EQUITIES MARKETS LAST WEEK

The rally in blue chip equities continued in the U.S. last week, but the broader market weakened considerably, with the NASDAQ treading water and the Russell 2000 sliding into negative territory. European stocks were generally stronger, but the Asian markets showed signs of increasing weakness.

Dow Jones Industrial Average – up 2.35%
Dow Jones Transportation Average – up 0.13%
Dow Jones Utilities Average – up 2.80%
S& P 500 – up 1.35%
NASDAQ Composite Index – up 0.10%
Russell 2000 – down 0.13%
London FTSE-100 – up 1.49%
Paris CAC-40 – up 0.91%
Frankfurt DAX – up 0.99%
Sydney All Ordinaries – up 0.69%
Tokyo Nikkei – up 1.13%
Hong Kong Hang Seng Index – down 1.77%
Singapore Straits Times Index – down 0.70%


FINANCIAL CYCLES MODEL PORTFOLIO


POSITIONS CLOSED DURING THE PREVIOUS WEEK: CELG, ROAD, CYTC, ASPT, RFMI.

We closed five portfolio positions during the previous week, with one winner and four losers producing a net loss of $1,160.00.

On December 15 we bought to cover 200 shares of Celegene Corporation (CELG) at 46.30, taking a loss of $240.00 (a 2.53% loss in 10 trading days).

On December 15 we sold 200 shares of Roadway Corporation (ROAD) at 53.35, taking a profit of $120.00 (a 1.14% gain in 5 trading days).

On December 16 we sold 400 shares of Cytyc Corporation (CYTC) at 13.13, taking a loss of $240.00 (a 4.57% loss in 1 trading day).

On December 19 we bought to cover 500 shares of Aspect Communications (ASPT) at 15.25, taking a loss of $500.00 (a 7.02% loss in 16 trading days).

On December 19 we sold 1,000 shares of RF Monolithics Inc. (RFMI) at 8.95, taking a loss of $300.00 (a 3.24% loss in 6 trading days).

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POSITIONS ADDED TO THE PORTFOLIO DURING THE PREVIOUS WEEK: CINF, CYTC.

We sold short 300 shares of Cincinnati Financial (CINF) at 41.65 on 12/19/03, setting our initial buy stop at 42.11.

We bought 400 shares of Cytyc Corporation (CYTC) at 13.73 on 12/15/03, setting our initial stop at 13.13.

We acquired 350 shares of Yellow Roadway Corporation (YELL) at a cost basis of 32.65 on 12/15/03 through the merger of Roadway and Yellow Freight, setting our initial stop at 30.50.

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YEAR-IN-REVIEW MODEL PORTFOLIO ACTIVITY

Since the beginning of 2003 we have had a total of 171 completed trades, with 96 winners and 75 losers bringing us a total net profit of $49,920.00. 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 $291.93. The mean duration of our trades has been 10.2 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

Cincinnati Financial (CINF) – sold short 300 shares at 41.65 on 12/19/03; currently 41.49. Lower buy stop to 41.75.

Packeteer Inc. (PKTR) – sold short 500 shares at 21.50 on 12/01/03; currently 17.13. Lower buy stop to 18.50.

Xicor Inc. (XICO) – sold short 1,000 shares at 11.25 on 12/09/03; currently 10.82. Lower buy stop to 11.11.

Yellow Roadway Corporation (YELL) – acquired 350 shares at a cost basis of 32.65 on 12/15/03 through the merger of Roadway and Yellow Freight; currently 36.71. Stop set at 30.50.



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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); on December 16, 2003, we closed a third position in J. B. Hunt Transportation Services, Inc. (JBHT – bought at 25.25; sold at 25.75). In closing these positions, we took a net loss of $759.00 on the trades and added $12,641.00 cash to the portfolio.
Only two of our original five positions are thus currently still active in the portfolio. The current equity in the Eclipse Portfolio is $21,313.00, for a loss of 0.15% since the portfolio’s inception. Here are our current positions:

Medtronic, Inc. (MDT) – bought 100 shares at 44.25 on 11/24/03; currently 48.66. Stop set at 45.00.

Teledyne Technologies, Inc. (TDY) – bought 200 shares at 17.60 on 11/24/03; currently 19.03. Raise stop to 17.00.

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STRONGEST MARKET SECTORS LAST WEEK

Consumer Services; Farm and Construction Machinery; Gaming Activities; Major Integrated Oil & Gas; Printed Circuit Boards.

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WEAKEST MARKET SECTORS LAST WEEK

Air Delivery & Freight Services; Restaurants; Processing Systems & Products; Technical & System Software; Semiconductor Memory Chips..

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KEY ASTROLOGICAL EVENTS THIS WEEK

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

December 22
Mercury opposition Saturn 00:55 EST
Mercury contraparallel Hades in right ascension 01:09 EST
Mercury opposition Saturn in right ascension 01:12 EST
Winter Solstice – Sun enters Capricorn 02:03 EST
Heliocentric Earth enters Cancer 02:03 EST
Venus square Poseidon in right ascension 05:07 EST
Heliocentric Mercury quincunx Heliocentric Poseidon 05:43 EST
Lunar Perigee 06:54 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Admetos 10:09 EST
Heliocentric Mars semisquare Heliocentric Kronos 11:35 EST
Heliocentric Mercury semisquare Heliocentric Vulcanus 11:51 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Hades 12:22 EST
Heliocentric Mercury trine Heliocentric Zeus 12:28 EST
Venus contraparallel Vulcanus 12:38 EST
Venus contraparallel Vulcanus in right ascension 13:43 EST
Heliocentric Mercury sesquiquadrate Heliocentric Apollon 13:53 EST
Heliocentric Mercury square Heliocentric Jupiter 15:24 EST
Heliocentric Mercury opposition Heliocentric Cupido 16:13 EST
Heliocentric Mercury semisextile Heliocentric Saturn 19:19 EST
Heliocentric Venus in 24th harmonic to Heliocentric Uranus 19:58 EST
Heliocentric Earth conjunct Heliocentric Kronos 20:06 EST
Sun opposition Kronos 20:14 EST
Sun opposition Kronos in right ascension 20:23 EST
Venus semisquare Pluto in right ascension 21:16 EST
Venus sesquiquadrate Jupiter in right ascension 23:03 EST

December 23
Void-of-Course Moon 02:29 – 02:55 EST
New Moon 04:43 EST
Venus in 24th harmonic to Chiron 05:33 EST
Heliocentric Earth semisquare Heliocentric Mars 06:41 EST
Heliocentric Mercury trine Heliocentric Neptune 07:31 EST
Mercury semisextile Cupido 11:38 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Kronos 19:27 EST
Mars quincunx Poseidon in right ascension 20:48 EST
Mars semisquare Admetos in right ascension 21:35 EST
Heliocentric Mercury semisextile Heliocentric Mars 22:34 EST
Mercury square Zeus 23:03 EST
Heliocentric Earth in 24th harmonic to Heliocentric Mercury 23:56 EST
Heliocentric Venus sextile Heliocentric Chiron 23:58 EST

December 24
Sun sextile Uranus in right ascension 00:01 EST
Heliocentric Mercury contraparallel Heliocentric Venus 01:07 EST
Venus sesquiquadrate Jupiter 01:53 EST
Sun sesquiquadrate True Lunar Node in right ascension 02:38 EST
Heliocentric Earth trine Heliocentric Uranus 04:39 EST
Heliocentric Mercury quincunx Heliocentric Chiron 07:42 EST
Venus sesquiquadrate Hades in right ascension 07:59 EST
Void-of-Course Moon begins 08:52 EST
Mars semisquare True Lunar Node 09:26 EST
Heliocentric Mercury square Heliocentric Venus 10:15 EST
Heliocentric Mercury opposition Heliocentric Pluto 10:55 EST
Heliocentric Venus square Heliocentric Pluto 12:53 EST
U.S. Equities Markets Close Early for Christmas Holiday 13:00 EST
Mercury contraparallel Vulcanus 13:24 EST
Mercury contraparallel Vulcanus in right ascension 14:33 EST
Heliocentric Mercury sesquiquadrate Heliocentric Poseidon 14:51 EST
Venus parallel Cupido 17:41 EST
Venus parallel Cupido in right ascension 18:44 EST
Heliocentric Mercury semisextile Heliocentric Admetos 19:15 EST
Sun in 24th harmonic to Chiron 20:36 EST
Heliocentric Mercury semisextile Heliocentric Vulcanus 20:55 EST
Heliocentric Mercury conjunct Heliocentric Hades 21:27 EST
Heliocentric Mercury trine Heliocentric Apollon 22:57 EST
Venus sextile Cupido in right ascension 23:32 EST

December 25
U.S., U.K., and many other markets in Europe & Asia closed for Christmas Holiday
Mercury semisextile Venus in right ascension 01:39 EST
Void-of-Course Moon ends 03:13 EST
Mercury semisextile Cupido in right ascension 03:42 EST
Venus trine Zeus in right ascension 03:59 EST
Heliocentric Venus sesquiquadrate Heliocentric Poseidon 04:31 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Saturn 04:41 EST
Venus semisquare Pluto 07:50 EST
Venus sextile Mars 08:28 EST
Heliocentric Jupiter square Heliocentric Cupido 13:39 EST
Mercury sesquiquadrate Admetos 14:28 EST
Mercury sextile Poseidon 16:00 EST
Heliocentric Mercury sesquiquadrate Heliocentric Neptune 16:34 EST
Sun sesquiquadrate Admetos in right ascension 18:40 EST
Sun sextile Poseidon in right ascension 18:59 EST
Heliocentric Venus sextile Heliocentric Admetos 22:02 EST
Mercury semisextile Venus 23:04 EST

December 26
Many European Markets closed for Boxing Day
Heliocentric Mercury enters Cancer 01:34 EST
Mercury square Mars 03:49 EST
Heliocentric Mercury conjunct Heliocentric Kronos 04:31 EST
Heliocentric Venus trine Heliocentric Vulcanus 04:40 EST
Heliocentric Venus square Heliocentric Hades 06:49 EST
Venus square Poseidon 06:54 EST
Heliocentric Mercury trine Heliocentric Uranus 09:52 EST
Sun sesquiquadrate True Lunar Node 11:25 EST
Mercury in 24th harmonic to Pluto 12:11 EST
Heliocentric Venus quincunx Heliocentric Apollon 12:47 EST
U.S. Stock Markets Close Early 13:00 EST
Heliocentric Mercury semisquare Heliocentric Mars 13:16 EST
Mercury square Mars in right ascension 14:07 EST
Mercury conjunct Sun in right ascension 19:20 EST
Heliocentric Earth conjunct Heliocentric Mercury 20:07 EST
Sun conjunct Mercury 20:10 EST

December 27
Heliocentric Mercury trine Heliocentric Poseidon 00:06 EST
Venus sesquiquadrate Hades 01:08 EST
Chiron conjunct 12/04/02 Solar Eclipse Antiscion 02:15 EST
Mercury sesquiquadrate True Lunar Node 03:52 EST
Heliocentric Mercury semisquare Heliocentric Admetos 04:33 EST
Void-of-Course Moon 05:57 – 06:10 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Vulcanus 06:15 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Hades 06:48 EST
Heliocentric Mercury square Heliocentric Zeus 06:53 EST
Mars quincunx Poseidon 06:59 EST
Sun in 24th harmonic to Pluto 07:38 EST
Mercury parallel Cupido 08:13 EST
Mars semisquare Admetos 09:20 EST
Mercury parallel Cupido in right ascension 09:31 EST
Heliocentric Mercury quincunx Heliocentric Cupido 10:42 EST
Heliocentric Mercury sextile Heliocentric Jupiter 11:14 EST
Mercury sextile Poseidon in right ascension 13:26 EST
Venus quincunx Saturn in right ascension 13:28 EST
Sun square Mars in right ascension 13:53 EST
Mercury sesquiquadrate Admetos in right ascension 14:09 EST
Heliocentric Mercury conjunct Heliocentric Saturn 14:28 EST
Heliocentric Mars parallel Heliocentric Neptune 20:20 EST
Heliocentric Earth trine Heliocentric Poseidon 20:29 EST

December 28
Venus trine Zeus 00:49 EST
Heliocentric Mercury quincunx Heliocentric Neptune 02:21 EST
Mercury in 24th harmonic to Chiron 02:29 EST
Heliocentric Mars trine Heliocentric Chiron 08:53 EST
Sun sextile Poseidon 10:10 EST
Sun sesquiquadrate Admetos 11:09 EST
Venus sextile Cupido 13:55 EST
Heliocentric Mercury in 24th harmonic to Heliocentric Kronos 14:33 EST
Void-of-Course Moon begins 19:03 EST
Mercury sextile Uranus in right ascension 20:00 EST
Heliocentric Mercury sesquiquadrate Heliocentric Uranus 20:10 EST
Heliocentric Earth semisquare Heliocentric Admetos 23:49 EST

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STOCKS TO WATCH: AA, GM, LSCP, UTX.

Alcoa, Inc. (AA)
First Trade Date: 06/11/1951; 10:00 a.m.
Trading Strategy: With Jupiter currently square the AA First-Trade Sun, there has been a nice advance in Alcoa’s share price lately. The Sun’s conjunction with First-Trade Chiron will probably bring the price down a bit this week, however, offering a nice buying opportunity. After the first of the year we not only have the Jupiter station, which will extend the impact of the current Jupiter transit—we also get Mars conjunct First-Trade Jupiter, which could add another positive kicker to the price action of this stock. Reinhold Ebertin once suggested that aluminum is most connected with the planet Neptune; in keeping with that notion we have found it interesting to observe this stock’s response to Neptune price lines set at 24 heliocentrically and at 19.68 geocentrically, mirrored and unmirrored. These lines often define support and resistance for AA, and in some cases (like this past week) emphasize the strength of a price move when the stock gaps upward or breaks out of a trading range. Our plan is to add a long position in AA to the Model Portfolio toward the end of this trading week, setting our initial stop at 33.53.

General Motors (GM)
First Trade Date: 12/20/1916; 10:00 a.m.
Trading Strategy: GM has just been through a solar return, but even more interesting is the current semisquare of transiting Uranus to the GM First-Trade Mars and the alignment of transiting Neptune to the GM First-Trade Ascendant. These configurations suggest that GM may be ready to roll on to even higher prices. We will be adding a long position this week, with our initial stop set at 47.87.

Laserscope (LSCP)
First Trade Date: 11/30/1989, 09:30 a.m.
Trading Strategy: Since mentioning this stock last week, we have been watching for the influence of transiting Saturn to fade, opening the door for expanded growth. We have not yet gotten two consecutive closes above the Neptune line at 16.66; as soon as we do, we will add a long position in LSCP to the Model Portfolio, setting our initial stop at 13.90.

United Technologies (UTX)
First Trade Date: 09/05/1934; 10:00 a.m.
Trading Strategy: Jupiter has just completed a transit of the UTX First-Trade Sun, with the stock price responding quite positively in the process. If that were the only thing this stock had going for it, we would be looking for a price pull-back in the weeks ahead. That’s not the whole story, however. As transiting Jupiter makes its station during the next couple of weeks, it will activate the UTX First-Trade Mars by semisquare. A second semisquare will connect transiting Poseidon to the UTX First-Trade Mercury. This combination should keep the price of this stock up, so we plan to add a long position to the Model Portfolio, with our initial stop set at 89.80.



FINANCIAL CYCLES (ISSN 1055-8527) is published by Taylor-Bost Consulting and edited by Tim Bost at 2831 Ringling Boulevard, Suite B-108, Sarasota, FL 34237 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 @ 12/21/2003 11:06:30 PM