FINANCIAL CYCLES WEEKLY UPDATE #0416 – April 18-24, 2004 with TIM BOST

COMMENT: Generally speaking, eclipses are the most important astrological events in terms of their ability to move markets and to signal major natural and geopolitical upheavals. This week’s Solar Eclipse is no exception. When it comes on Monday, it will arrive in the midst of a market environment that has been behaving with typical Mercury retrograde uncertainty—signals have been contradictory, trends have been short-lived or nonexistent, and trading has been challenging to say the least.
We expect the Solar Eclipse to provide a galvanizing influence for the stock market, with a stronger trending trading environment in the weeks ahead. Based on an overall market outlook, we expect that trend to be a positive one for equities, pulling in a few more would-be investors and setting the stage for a major correction later this year.
But with Mercury still in retrograde motion, that expectation may not be entirely warranted. The market could remain essentially trendless, or it may act initially as if a strong trend were emerging, only to have that trend evaporate into uncertainty later or get skewed beyond recognition by world events.
It’s in the area of world events, of course, that things remain the most volatile. Last week’s White House appearance by Israeli Prime Minister Ariel Sharon getting a go-ahead from President George W. Bush for the continuing occupation of Palestinian lands on the West Bank, coming as it did just days before yet another assassination of a Palestinian leader by the Israelis, has sent fresh shock waves through the Middle East on the eve of the eclipse. Meanwhile, the fighting in Iraq has intensified, with the U.S. killing more than 600 Iraqis in response to the murder and mutilation of four Americans, dozens of additional U.S. troops getting killed, and Donald Rumsfeld admitting that American GIs will be staying in Iraq longer than expected while Paul Bremmer has explained that although the new Iraqi government created by the U.S. will take power on June 30, it will require a huge level of ongoing military assistance from the U.S. to force the Iraqi people to accept it.
This is all in the name of democracy, mind you, even though it’s becoming more and more difficult to pretend that the U.S. actions in that part of the world have anything to do with something other than creating bigger oil profits, or that they truly represent a unified military coalition. That coalition is now coming apart at the seams, thanks to the announcement by Spain’s newly elected leader that that Spanish are pulling out of the conflict in Iraq.
What does all this mean for the markets? Just that the environment is very, very volatile, and that consternation about world events could easily spill over onto the trading floor. It’s a good time for the faint of heart to stay out of the market altogether, at least until after Mercury resumes direct motion at the end of the month. But an extremely volatile situation can also be an extremely profitable situation, so we’re hanging in with our trading strategy, taking our lumps, and treating the whole experience as a grand opportunity to master new levels of emotional detachment and trading discipline.


THE WEEK AHEAD

Some very heavy hitters will be reporting earnings this week, adding some real intensity to the eclipse-powered opportunities for market-shaking shifts in consciousness. We’ll be watching for the reports from 3M (MMM), Eli Lilly (LLY), Fannie Mae (FNM), Allstate (ALL), Bank One (ONE), Boston Scientific (BSX), ALTRIA (MO), Forest Laboratories (FRX), Motorola (MOT), Wells Fargo (WFC), Pfizer (PFE), Capital One Financial (COF), eBay (EBAY), Ford Motor (F), Honeywell International (HON), J.P. Morgan Chase (JPM), Coca Cola (KO), Qualcomm (QCOM), Sears (S), SBC Communications (SBC), Saint Jude Medical (STJ), United Technologies (UTX), American Express (AXO), Amazon.com (AMZN), Caterpillar (CAT), Kimberly Clark (KMB), First Data (FDC), Merck (MRK), Microsoft (MSFT), NEXTEL (NXTL), United Parcel Service (UPS), Schlumberger (SLB) and International Paper (IP).
There’s not a lot of economic news expected this week, which means that the reports that do come out will be more closely watched. We’ll get the Conference Board’s Leading Indicators for March, numbers on Retail Sales and Business Inventories, Jobless Claims, and a March figure on Durable Goods Orders.
Most of the questions about the economy will center on Alan Greenspan and the Federal Reserve. Mr. Greenspan will testify before the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday afternoon, April 20, and then will appear before the Joint Economic Committee of Congress on Wednesday. Also on Wednesday, the Federal Reserve Beige Book will be released. The key concern will be the stability of interest rates—with increasing signs of inflation, a move from the Fed to tighten interest rates would certainly not be out of the question. So the representatives in Congress, as well as market analysts and economic pundits, will all be wondering about things like how soon will interest rates go up, and when they do move up, how much will they move?
Astrologically, the big factor this week is Monday’s Solar Eclipse, with its power amplified by a Mars/Pluto opposition, a Mercury/Apollon opposition, and a Pluto/Hades opposition.
Hold onto your hats, and have a great week!

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GLOBAL EQUITIES MARKETS LAST WEEK

U.S. Blue Chips and European stocks managed to stay in positive territory last week, but there were significant losses in the NASDAQ and at stock exchanges throughout the Pacific Rim. The reversals in Japan and Hong Kong were especially noteworthy, with the Nikkei hitting another new high before selling off sharply and with the Hang Seng putting in a new low for the year.

Dow Jones Industrial Average – up 0.10%
Dow Jones Transportation Average – up 0.43%
Dow Jones Utilities Average – down 2.30%
S& P 500 – down 0.41%
NASDAQ Composite Index – down 2.78%
Russell 2000 – down 2.43%
London FTSE-100 – up 1.06%
Paris CAC-40 – up 0.31%
Frankfurt DAX – up 0.51%
Sydney All Ordinaries – down 0.93%
Tokyo Nikkei – down 2.22%
Hong Kong Hang Seng Index – down 3.49%
Singapore Straits Times Index – down 2.52%


FINANCIAL CYCLES MODEL PORTFOLIO


POSITIONS CLOSED DURING THE PREVIOUS WEEK: IPAR, SWKS, CAT, FULT, OHP, WLP.

We closed six portfolio positions during the previous week, with three winners and three losers producing a net loss of $468.00.

On April 12 we sold 400 shares of Inter Parfums Inc. (IPAR) at 24.37, taking a profit of $708.00 (a 7.83% gain in 9 trading days).

On April 13 we sold 800 shares of Skyworks Solutions Inc. (SWKS) at 11.76, taking a profit of $208.00 (a 2.26% gain in 10 trading days).

On April 14 we sold 100 shares of Caterpillar Inc. (CAT) at 81.00, taking a profit of $250.00 (a 3.18% gain in 10 trading days).

On April 14 we sold 400 shares of Fulton Financial Corporation (FULT) at 21.50, taking a loss of $524.00 (a 5.74% loss in 15 trading days).

On April 15 we sold 200 shares of Oxford Health Plans Inc. (OHP) at 53.25, taking a loss of $580.00 (a 5.16% loss in 3 trading days).

On April 15 we sold 100 shares of Wellpoint Health Network (WLP) at 112.25, taking a loss of $530.00 (a 4.51% loss in 3 trading days).

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POSITIONS ADDED TO THE PORTFOLIO DURING THE PREVIOUS WEEK: OHP, WLP, SPF, SONC, CVH.

We added three long positions and two short positions to the Model Portfolio during the previous week.

We bought 200 shares of Oxford Health Plans Inc. (OHP) at 56.15 on 04/12/04, setting our initial stop at 53.25.

We bought 100 shares of Wellpoint Health Network (WLP) at 117.55 on 04/12/04, setting our initial stop at 112.25.

We sold short 200 shares of Standard Pacific Corporation (SPF) at 54.90 on 04/13/04, setting our initial buy stop at 58.25.

We sold short 300 shares of Sonic Corporation (SONC) at 33.33 on 04/14/04, setting our initial buy stop at 36.75.

We bought 200 shares of Coventry Health Care Inc. (CVH) at 40.85 on 04/15/04, setting our initial stop at $40.00.

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YEAR-IN-REVIEW MODEL PORTFOLIO ACTIVITY

Based on the Model Portfolio’s composition at the beginning of 2004, featuring positions with an acquisition cost basis of $53,947.50 ($66,022.50 in long positions less short liabilities of $12,075.00), we reduced our cash holdings in the Model Portfolio to $46,052.50 on January 1. This returned the total portfolio value to $100.000.00 as we began trading in 2004.

So far this year we have had a total of 65 completed trades, with 28 winners and 37 losers bringing us a total net profit of $743.50. The largest profit for a single trade has been $1,522.50; the largest single-trade loss has been $750.00; the average profit per trade has been $11.44. The mean duration of our trades has been 8.7 trading days.

During 2003 we had a total of 176 completed trades, with 99 winners and 77 losers bringing us a total net profit of $51,717.00. The largest profit for a single trade was $9,240.00; the largest single-trade loss was $1,170.00; the average profit per trade was $293.85. The mean duration of our trades was 10.1 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

Coventry Health Care Inc. (CVH) – bought 200 shares at 40.85 on 04/15/04; currently 42.63. Raise stop to 41.18.

Hologic Inc. (HOLX) – bought 500 shares at 19.95 on 03/30/04; currently 22.07. Raise stop to 21.25.

QLT Inc. (QLTI) – bought 400 shares at 22.75 on 03/22/04; currently 28.01. Raise stop to 27.25.

Sonic Corporation (SONC) – sold short 300 shares at 33.33 on 04/14/04; currently 32.23. Lower buy stop to 33.60.

Standard Pacific Corporation (SPF) – sold short 200 shares at 54.90 on 04/13/04; currently 55.50. Lower buy stop to 56.70.


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STRONGEST MARKET SECTORS LAST WEEK

Major Drug Manufacturers; Housewares & Accessories; Industrial Equipment; Personal Products; Lumber & Wood Products.

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WEAKEST MARKET SECTORS LAST WEEK

Silver; Semiconductor Equipment & Materials; Internet Service Providers; Processing Systems & Products; Printed Circuit Boards.

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KEY ASTROLOGICAL EVENTS THIS WEEK

April 18
Sun sesquiquadrate Jupiter in right ascension 00:23 EDT
Heliocentric Earth parallel Heliocentric Uranus 02:56 EDT
Admetos sextile Vulcanus 04:46 EDT
Saturn quincunx Cupido in right ascension 05:42 EDT
Sun square Chiron in right ascension 06:01 EDT
Jupiter square 5/31/2003 Solar Eclipse Point 10:18 EDT
Heliocentric Mercury semisquare Heliocentric Jupiter 10:46 EDT
Mercury in 24th harmonic to True Lunar Node 11:14 EDT
Mercury square Vulcanus in right ascension 15:37 EDT
Mercury square Chiron 17:55 EDT
Heliocentric Mercury trine Heliocentric Uranus 18:09 EDT
Heliocentric Mercury parallel Heliocentric Uranus 18:41 EDT
Sun parallel Mercury 22:10 EDT
Sun parallel Mercury in right ascension 22:11 EDT
Mercury sesquiquadrate Cupido in right ascension 22:21 EDT
Heliocentric Earth parallel Heliocentric Mercury 23:54 EDT

April 19
Venus square Jupiter in right ascension 00:15 EDT
Hades trine Apollon in right ascension 03:42 EDT
Venus sesquiquadrate Chiron in right ascension 08:23 EDT
Solar Eclipse 09:21 EDT
Void-of-Course Moon 09:21 – 09:42 EDT
Heliocentric Mercury semisquare Heliocentric Pluto 10:44 EDT
Mars trine Neptune in right ascension 12:06 EDT
Heliocentric Venus sesquiquadrate Heliocentric Neptune 13:39 EDT
Sun enters Taurus 13:50 EDT
Heliocentric Mercury conjunct Heliocentric Poseidon 14:17 EDT
Sun sextile Kronos 19:20 EDT

April 20
Mercury perigee 02:07 EDT
Mercury semisquare Uranus in right ascension 03:09 EDT
Heliocentric Mercury semisextile Heliocentric Zeus 04:49 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Hades 05:07 EDT
Mercury sesquiquadrate Cupido 05:58 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Apollon 07:15 EDT
True Lunar Node direct station 07:58 EDT
Heliocentric Venus contraparallel Heliocentric Zeus 10:32 EDT
Heliocentric Mercury semisextile Heliocentric Cupido 14:01 EDT
Heliocentric Venus enters Libra 14:18 EDT
Heliocentric Earth trine Heliocentric Kronos 14:19 EDT
Void-of-Course Moon begins 15:36 EDT
Heliocentric Mercury parallel Heliocentric Poseidon 15:51 EDT
Pluto opposition Hades 15:55 EDT

April 21
Mars sesquiquadrate Poseidon in right ascension 02:36 EDT
Heliocentric Venus square Heliocentric Kronos 05:05 EDT
Mercury contraparallel Uranus in right ascension 05:50 EDT
Mercury contraparallel Uranus 05:53 EDT
Heliocentric Mars sextile Heliocentric Jupiter 07:00 EDT
Heliocentric Mercury parallel Heliocentric Pluto 08:08 EDT
Mercury sesquiquadrate Jupiter 10:03 EDT
Venus trine Neptune 10:17 EDT
Venus in 24th harmonic to Kronos 11:15 EDT
Heliocentric Mercury parallel Heliocentric Chiron 17:46 EDT
Void-of-Course Moon ends 21:10 EDT

April 22
Heliocentric Mercury square Heliocentric Neptune 00:04 EDT
Mercury trine Pluto in right ascension 00:33 EDT
Saturn sextile True Lunar Node in right ascension 02:28 EDT
Sun sextile Kronos in right ascension 02:29 EDT
Heliocentric Earth semisextile Heliocentric Venus 03:27 EDT
Heliocentric Mercury trine Heliocentric Saturn 04:55 EDT
Mars semisextile Admetos in right ascension 04:59 EDT
Heliocentric Venus in 24th harmonic to Heliocentric Jupiter 06:41 EDT
Heliocentric Earth semisquare Heliocentric Jupiter 09:00 EDT
Mercury parallel Jupiter in right ascension 14:30 EDT
Mercury parallel Jupiter 14:33 EDT
Heliocentric Venus quincunx Heliocentric Uranus 17:22 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Kronos 21:29 EDT
Mercury sextile Hades in right ascension 23:29 EDT

April 23
Heliocentric Mars sesquiquadrate Heliocentric Uranus 00:03 EDT
Heliocentric Earth trine Heliocentric Uranus 02:39 EDT
Mars sesquiquadrate Poseidon 03:24 EDT
Mercury opposition Apollon in right ascension 05:47 EDT
Heliocentric Mercury parallel Heliocentric Neptune 07:50 EDT
Mercury opposition Apollon 08:22 EDT
Heliocentric Mercury sextile Heliocentric Jupiter 12:19 EDT
Mercury contraparallel Apollon 12:57 EDT
Mercury contraparallel Apollon in right ascension 13:13 EDT
Void-of-Course Moon begins 19:22 EDT
Lunar apogee 20:16 EDT
Heliocentric Mercury trine Heliocentric Mars 20:50 EDT

April 24
Heliocentric Earth in 24th harmonic to Heliocentric Mercury 01:01 EDT
Mercury sextile Mars in right ascension 06:07 EDT
Heliocentric Venus semisextile Heliocentric Poseidon 07:49 EDT
Void-of-Course Moon ends 09:56 EDT
Heliocentric Mercury semisextile Heliocentric Pluto 11:18 EDT
Mars semisextile Vulcanus 11:36 EDT
Mars semisextile Admetos 14:08 EDT
Mars opposition Pluto 14:13 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Poseidon 14:55 EDT
Heliocentric Mercury contraparallel Heliocentric Admetos 15:05 EDT
Pluto quincunx Admetos 15:56 EDT
Mars trine Apollon in right ascension 18:28 EDT
Mars conjunct Hades 18:43 EDT
Heliocentric Mercury sextile Heliocentric Chiron 19:36 EDT
Moon at maximum north declination 23:33 EDT
Mars conjunct Hades in right ascension 23:54 EDT

April 25
Heliocentric Mercury semisquare Heliocentric Venus 00:03 EDT
Mercury sextile Mars 00:41 EDT
Heliocentric Mercury opposition Heliocentric Admetos 00:52 EDT
Heliocentric Venus sesquiquadrate Heliocentric Admetos 01:30 EDT
Heliocentric Mercury trine Heliocentric Vulcanus 04:26 EDT
Heliocentric Mercury semisquare Heliocentric Zeus 06:32 EDT
Heliocentric Mercury quincunx Heliocentric Hades 06:54 EDT
Heliocentric Earth semisquare Heliocentric Pluto 07:49 EDT
Heliocentric Mercury semisextile Heliocentric Apollon 09:08 EDT
Mercury sextile Hades 09:09 EDT
Mars opposition Pluto in right ascension 11:25 EDT
Heliocentric Venus conjunct Heliocentric Zeus 11:36 EDT
Heliocentric Venus in 24th harmonic to Heliocentric Apollon 16:12 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Cupido 16:29 EDT
Mercury semisextile Admetos 16:31 EDT
Sun sextile Uranus 16:39 EDT
Heliocentric Earth conjunct Heliocentric Poseidon 18:26 EDT
Sun opposition Poseidon 18:34 EDT
Sun opposition Poseidon in right ascension 18:35 EDT
Sun contraparallel Poseidon in right ascension 18:36 EDT
Mercury trine Pluto 18:44 EDT
Heliocentric Earth parallel Heliocentric Poseidon 19:04 EDT
Sun contraparallel Poseidon 19:13 EDT
Mercury square Vulcanus 21:48 EDT


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STOCKS TO WATCH: AH, AVP, COCO, DRTE, MIDD.

Armor Holdings Inc. (AH)
NYSE; Optionable
First Trade Date: 05/07/1999; 09:30 a.m.
Trading Strategy: With Saturn moving toward the First-Trade Ascendant and Mars conjunct First-Trade Hades, AH looks like a good candidate for a short sale. We are continuing to look for a daily close below the 50-day moving average. When it comes we will sell AH short, setting our initial buy stop at 36.00.

Avon Products (AVP)
NYSE; Optionable
First Trade Date: 04/20/1964; 10:00 a.m.
Trading Strategy: We’ve selected AVP as an eclipse play this week, since this stock has strong fundamentals, a technical chart with a lot of momentum, and a direct hit from the Solar Eclipse to the First-Trade Sun. A geocentric 15.5 Zeus line is especially significant in the price action for this stock. Our plan is add a long position to the Model Portfolio early this week if we get a close above that Zeus line at 79.21; we will be setting our initial stop at 77.65, just below the next-lowest increment of that line.

Corinthian Colleges Inc. (COCO)
NASDAQ: Optionable
First Trade Date: 02/05/1999; 09:30 a.m.
Trading Strategy: COCO has been a solidly performing stock for quite some time, but we don’t like the looks of transiting Saturn getting ready to cross the COCO First-Trade IC. Transiting Neptune is also getting ready to conjoin the First-Trade Sun, which doesn’t help matters much. A geocentric Chiron line at 24.25 has been important in defining the trading range for this stock, augmented by a geocentric 24.32 Cupido line. Our plan is to sell COCO short this week, setting our initial buy stop at 35.00.

Dendrite International Inc. (DRTE)
NASDAQ; Optionable
First Trade Date: 06/30/1995; 09:30 a.m.
Trading Strategy: DRTE presents us with a remarkable trading opportunity. Saturn is currently conjunct the DRTE First-Trade Sun, helping to control the price of the stock in recent trading sessions. This means, of course, that DRTE has more upside potential on the way, a situation that is underscored by the sesquiquadrate of transiting Jupiter to First-Trade Neptune and the sesquiquadrate of transiting Vulcanus to First-Trade Jupiter. We plan to add a long position in DRTE to the Model Portfolio this week, setting our initial stop at 15.75.

Middleby Corporation (MIDD)
NASDAQ
First Trade Date: 11/28/1995; 09:30 a.m.
Trading Strategy: Saturn is crossing the MIDD First-Trade Descendant right now, but that’s not the only thing helping to put the brakes on this stock’s growth. Transiting Hades, which is in opposition to transiting Pluto, is also in opposition to the MIDD First-Trade Jupiter. This could signal a significant downturn in the stock’s price. Our plan is to sell MIDD short this week, setting our initial buy stop at 53.00.


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. Web: http://www.TimBost.com. Entire contents copyright 2004 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, 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. PayPal is also accepted for online orders; to subscribe go to http://www.TimBost.com/newsletter/subscribe.html.

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 @ 4/18/2004 05:05:43 PM