FINANCIAL CYCLES WEEKLY UPDATE #0421 – May 23-29, 2004 with TIM BOST

COMMENT: During the simultaneous stations of Venus and Neptune during the past week, Neptune apparently took charge. Neptune is the planet that is connected with confusion, uncertainty, and lack of real direction, and that’s exactly what seemed to manifest in the markets. It’s also the planet of subterfuge and deceit, and those characteristics were increasingly evident in the investigations of what was apparently an official policy of torture and mistreatment of detainees by the U.S. military. In the political arena, Neptune was also evident in John Kerry’s bizarre hints that he might not actually accept the Democratic nomination for President when he’s nominated, or that he might try to craft a ticket that would include Ralph Nader or even John McCain as a running mate. It was all enough to make us think that perhaps reality TV is the only shred of reality we have left—and if that’s the case, we’re in real trouble!
Nevertheless, the planetary indicators of a change in trend are making their influence felt, both in the markets and in the economy as a whole. Rising prices are now more normal than ever, and the National Association for Business Economics has estimated that inflation, as measured by the Consumer Price Index, will rise by 2.5 percent in 2004. That’s a big jump, much larger than previous estimates. But with gasoline prices going up 14 cents in the last 14 days, you don’t have to have a PhD to figure out that the forecast is quite realistic. So even if economic recovery is on the way, it’s a recovery in which businesses and consumers alike will have substantially less purchasing power.
In the stock market, last week’s big drops were followed by up days, but the trading volume on the up days was extremely thin and the bullish sentiment was unconvincing to say the least. It looks like we’re poised for a sharper, faster downturn in stock prices at this point, with this week’s eclipse activations, hard aspects, and planetary ingresses providing the trigger. As traders, we’ll be taking extra care to be clear in our analysis and well be using extra caution in placing orders, setting stops, and following through with our trading plan. The times when the temper of the market shifts are times that offer remarkable opportunities, but we have to be ready to take advantage of those opportunities in a systematic way.
Next week’s publication of the FINANCIAL CYCLES WEEKLY UPDATE will be delayed by one day—with the U.S. markets closed on Monday for Memorial Day, our weekly email will go out on Tuesday morning instead of at the usual time. In the meantime, have a great week and a wonderful holiday!

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THE WEEK AHEAD

There are only about 100 companies planning to issue earnings reports this week, so we won’t be likely to see many market shakeups coming from earnings surprises or disappointments. The key reports we will be looking for will come from Campbell Soup (CPB), Medtronic (MDT), Scottish Power (SPI), Vodaphone (VOD), Costco (COST), and Vivendi Universal (V). There will also be some key Canadian banks reporting earnings, including the Canadian Imperial Bank of Commerce (BCM), the Bank of Montreal (BMO), Toronto Dominion Bank (TD), and the Royal Bank of Canada (RY).
Jobs and Housing will be in the forefront of the week’s economic reports. We’ll get the numbers on Existing Home Sales, New Home Sales, Durable Orders, Initial Jobless Claims, Personal Income, and Personal Spending. We’ll also be taking a look at Consumer Confidence, the Chicago Purchasing Managers Index, and the preliminary numbers for the GNP.
It’s the astrological picture that promises some market turbulence this week. Tuesday’s Mars/Saturn conjunction (which takes place in right ascension on Monday evening), along with Cupido triggering an eclipse point, could make for a trading environment in which prices encounter unexpected resistance. On Wednesday the markets in Hong Kong will be closed to honor the birthday of the Buddha; there’s also a void-of-course Moon through nearly all of the trading day, so our plan is to take a holiday as well. Because of the void Moon, we won’t get a true picture of the market direction until just a few minutes before the closing bell. Thursday should see a dramatic move away from the congested trading that has been so typical in recent months—Mercury triggers an eclipse point as the Sun and Uranus form a square and Venus and Mercury both change signs heliocentrically. That should be enough energy to shake the markets out of their lethargy! Friday is the last trading day before the Memorial Day holiday—the bond markets will close early on Friday, and another void-of-course Moon kicks in just after noon. That means we’ll focus our trading activity in just the morning hours on Friday, and then get ready for a break. Remember that next week’s issue will come out on Tuesday morning instead of the usual publication time prior to Monday’s opening bell.

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GLOBAL EQUITIES MARKETS LAST WEEK

The markets in Europe and Asia recovered a little lost ground last week, but the action was decidedly sluggish for U.S. markets once again. Blue Chip and large cap issues continued to decline, but the broader market of smaller cap issues leveled off a bit.

Dow Jones Industrial Average – down 0.46%
Dow Jones Transportation Average – up 0.28%
Dow Jones Utilities Average – down 0.10%
S& P 500 – down 0.20%
NASDAQ Composite Index – up 0.52%
Russell 2000 – up 0.54%
London FTSE-100 – down 0.29%
Paris CAC-40 – up 0.19%
Frankfurt DAX – up 0.95%
Sydney All Ordinaries – up 0.81%
Tokyo Nikkei – up 2.03%
Hong Kong Hang Seng Index – up 2.65%
Singapore Straits Times Index – up 0.70%

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FINANCIAL CYCLES MODEL PORTFOLIO


POSITIONS CLOSED DURING THE PREVIOUS WEEK: MICC, LSCP, SNCI.

We closed three Model Portfolio positions during the past week, with one winner and two losers producing a net loss of $125.00.

On May 17 we sold 500 shares of Millicom International Cellular (MICC) at 20.50, taking a loss of $125.00 (a 1.20% loss in 3 trading days).

On May 21 we sold 300 shares of Laserscope (LSCP) at 28.75, taking a loss of $150.00 (a 1.71% loss in 4 trading days).

On May 21 we bought to cover 1,000 shares of Sonic Innovations Inc. (SNCI) at 9.15, taking a profit of $150.00 (a 1.61% gain in 7 trading days).


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POSITIONS ADDED TO THE PORTFOLIO DURING THE PREVIOUS WEEK: EWBC, EAGL, LSCOP, LIFC, ODFL.

We added five long positions to the Model Portfolio during the previous week.

We bought 200 shares of East West Bancorp Inc. (EWBC) at 54.25 on 05/17/04, setting our initial stop at 53.05.

We bought 500 shares of E G L Inc. (EAGL) at 20.05 on 05/17/04, setting our initial stop at 18.50.

We bought 300 shares of Laserscope (LSCP) at 29.25 on 05/17/04, setting our initial stop at 28.75.

We bought 800 shares of Lifecell Corporation (LIFC) at 10.30 on 05/17/04, setting our initial stop at 9.92.

We bought 200 shares of Old Dominion Freight Lines (ODFL) at 37.00 on 05/17/04, setting our initial stop at 35.05.

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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 82 completed trades, with 34 winners and 48 losers bringing us a total net profit of $1,692.50. The largest profit for a single trade has been $1,980.00; the largest single-trade loss has been $750.00; the average profit per trade has been $20.64. The mean duration of our trades has been 8.5 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

Avon Products (AVP) – bought 100 shares at 78.75 on 04/23/04; currently 85.31. Raise stop to 82.54. This stock is scheduled to split 2-for-1 at the close on 05/28/04.

Cal Dive International (CDIS) – bought 400 shares at 27.80 on 05/11/04; currently 27.67. Raise stop to 27.55.

Corinthian Colleges Inc. (COCO) – sold short 300 shares at 35.75 on 04/22/04; currently 26.10. Lower buy stop to 27.95.

East West Bancorp Inc. (EWBC) – bought 200 shares at 54.25 on 05/17/04; currently 58.28. Raise stop to 54.75.

E G L Inc. (EAGL) – bought 500 shares at 20.05 on 05/17/04; currently 20.50. Raise stop to 19.90.

Knightsbridge Tankers (VLCCF) – bought 500 shares at 18.69 on 05/14/04; currently 21.61. Raise stop to 20.00.

Lifecell Corporation (LIFC) – bought 800 shares at 10.30 on 05/17/04; currently 10.51. Raise stop to 9.96.

National Medical Health Card (NMHC) – bought 300 shares at 28.75 on 05/06/04; currently 36.66. Raise stop to 35.00 on a closing basis.

Old Dominion Freight Lines (ODFL) – bought 200 shares at 37.00 on 05/17/04; now 300 shares following 3-for-2 split. Currently 24.47; adjust stop to 23.70.

Stericycle Inc. (SRCL) – sold short 200 shares at 47.50 on 05/11/04; currently 45.97. Lower buy stop to 46.65.

Transact Technologies Inc. (TACT) – bought 500 shares at 19.50 on 04/29/00; currently 29.04. Raise stop to 27.35.

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STRONGEST MARKET SECTORS LAST WEEK

Security & Protection Services; Technical & System Software; Nonmetallic Mineral Mining; Information Technology Services; Pollution & Treatment Controls.

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WEAKEST MARKET SECTORS LAST WEEK

Movie Theaters; Oil & Gas Drilling & Exploration; Diagnostic Substances; Long-Term Care Facilities; Restaurants.

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KEY ASTROLOGICAL EVENTS DURING THE COMING WEEK

May 23
Void-of Course Moon all day
Jupiter sesquiquadrate Chiron in right ascension 00:51 EDT
Heliocentric Venus sextile Heliocentric Chiron 00:59 EDT
Saturn sextile True Lunar Node 01:38 EDT
Heliocentric Venus opposition Heliocentric Admetos 02:20 EDT
Mercury semisquare Hades in right ascension 02:56 EDT
Heliocentric Venus trine Heliocentric Vulcanus 08:41 EDT
Heliocentric Mercury quincunx Heliocentric Saturn 09:40 EDT
Sun semisextile Kronos in right ascension 09:48 EDT
Heliocentric Venus semisquare Heliocentric Zeus 12:48 EDT
Heliocentric Venus quincunx Heliocentric Hades 13:41 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Kronos 16:07 EDT
Venus in 24th harmonic to Mars 16:24 EDT
Heliocentric Venus semisextile Heliocentric Apollon 17:16 EDT
Mars sextile Jupiter in right ascension 17:42 EDT
Mercury quincunx Cupido in right ascension 17:48 EDT
Mercury quincunx Cupido 19:12 EDT
Mercury trine Jupiter 20:46 EDT
Uranus sextile True Lunar Node in right ascension 20:53 EDT

May 24
Heliocentric Mercury contraparallel Heliocentric Hades 01:55 EDT
Heliocentric Mercury contraparallel Heliocentric Saturn 02:27 EDT
Heliocentric Venus in 24th harmonic to Heliocentric Cupido 07:20 EDT
Mercury conjunct True Lunar Node in right ascension 07:49 EDT
Sun contraparallel Cupido in right ascension 08:08 EDT
Void-of Course Moon ends 08:13 EDT
Mercury sextile Uranus in right ascension 09:23 EDT
Sun contraparallel Cupido 09:47 EDT
Heliocentric Earth parallel Heliocentric Cupido 10:02 EDT
Mercury semisquare Venus 10:31 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Uranus 10:38 EDT
Heliocentric Earth square Heliocentric Uranus 11:28 EDT
Mars sextile True Lunar Node 14:11 EDT
Heliocentric Mercury contraparallel Heliocentric Vulcanus 16:40 EDT
Mars conjunct Saturn in right ascension 19:28 EDT
Heliocentric Mercury quincunx Heliocentric Jupiter 20:05 EDT
Mercury conjunct True Lunar Node 23:03 EDT
Heliocentric Mercury contraparallel Heliocentric Mars 23:41 EDT
Heliocentric Mercury sextile Heliocentric Pluto 23:57 EDT

May 25
Mercury semisquare Venus in right ascension 00:08 EDT
Cupido opposition 5/31/2003 Solar Eclipse Point 01:20 EDT
Mars conjunct Saturn 01:39 EDT
Heliocentric Earth parallel Heliocentric Mercury 02:59 EDT
Mercury sextile Saturn 04:33 EDT
Heliocentric Mercury parallel Heliocentric Cupido 05:28 EDT
Mercury sextile Mars 06:26 EDT
Heliocentric Mercury semisextile Heliocentric Chiron 09:30 EDT
Heliocentric Mercury square Heliocentric Admetos 09:47 EDT
Heliocentric Mercury quincunx Heliocentric Vulcanus 12:34 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Zeus 14:21 EDT
Heliocentric Mercury trine Heliocentric Hades 14:44 EDT
Heliocentric Earth contraparallel Heliocentric Mars 16:06 EDT
Heliocentric Mercury trine Heliocentric Apollon 16:15 EDT

May 26
Hong Kong markets closed for Buddha’s birthday
Heliocentric Venus contraparallel Heliocentric Admetos 00:22 EDT
Void-of Course Moon 05:42 – 15:52 EDT
Sun quincunx Poseidon 12:12 EDT
Heliocentric Mars quincunx Heliocentric Uranus 12:59 EDT
Heliocentric Earth in 24th harmonic to Heliocentric Pluto 13:50 EDT
Venus semisextile Vulcanus in right ascension 17:25 EDT
Mercury square 11/09/2003 Lunar Eclipse Antiscion 20:25 EDT
Mercury contraparallel Poseidon in right ascension 20:26 EDT
Mercury contraparallel Poseidon 20:44 EDT
Heliocentric Earth semisextile Heliocentric Poseidon 20:46 EDT
Heliocentric Mercury parallel Heliocentric Venus 20:50 EDT
Hades trine Apollon 23:50 EDT

May 27
Heliocentric Mercury in 24th harmonic to Heliocentric Neptune 02:03 EDT
Mercury sextile Saturn in right ascension 02:44 EDT
Heliocentric Mercury square Heliocentric Venus 02:49 EDT
Heliocentric Mercury contraparallel Heliocentric Admetos 03:13 EDT
True Lunar Node direct station 04:11 EDT
Mercury opposition 5/04/2004 Lunar Eclipse Point 10:54 EDT
Heliocentric Mercury enters Pisces 11:05 EDT
Sun square Uranus 12:43 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Saturn 12:46 EDT
Mercury contraparallel Chiron 14:17 EDT
Mercury contraparallel Chiron in right ascension 14:20 EDT
Venus semisquare True Lunar Node in right ascension 16:03 EDT
Heliocentric Chiron trine Heliocentric Admetos 16:37 EDT
Heliocentric Mercury trine Heliocentric Kronos 17:38 EDT
Heliocentric Mars contraparallel Heliocentric Cupido 19:15 EDT
Mercury square Neptune 21:09 EDT
Heliocentric Venus enters Sagittarius 22:37 EDT
Sun trine Zeus 23:07 EDT
Sun semisquare Vulcanus 23:59 EDT

May 28
Mercury semisquare Kronos 2:26 EDT
Heliocentric Earth semisquare Heliocentric Chiron 03:02 EDT
Heliocentric Venus sesquiquadrate Heliocentric Saturn 03:03 EDT
Heliocentric Mercury parallel Heliocentric Neptune 04:01 EDT
Heliocentric Earth contraparallel Heliocentric Vulcanus 05:08 EDT
Mercury contraparallel Pluto 07:02 EDT
Mercury contraparallel Pluto in right ascension 07:03 EDT
Sun in 24th harmonic to Admetos 07:48 EDT
Mercury conjunct 11/09/2003 Lunar Eclipse Point 10:16 EDT
Heliocentric Mercury conjunct Heliocentric Uranus 10:31 EDT
Void-of Course Moon 12:17 - 23:22 EDT
Sun sesquiquadrate Apollon 13:09 EDT
Heliocentric Earth sesquiquadrate Heliocentric Vulcanus 13:24 EDT
Sun in 24th harmonic to Hades 14:19 EDT
Heliocentric Venus quincunx Heliocentric Kronos 14:44 EDT
Sun sesquiquadrate Apollon in right ascension 15:07 EDT
Heliocentric Mercury quincunx Heliocentric Mars 16:08 EDT
Sun parallel Vulcanus in right ascension 16:29 EDT
Sun parallel Vulcanus 18:22 EDT
Heliocentric Earth sextile Heliocentric Zeus 20:20 EDT
Mercury parallel True Lunar Node in right ascension 20:23 EDT
Heliocentric Mercury trine Heliocentric Poseidon 23:56 EDT

May 29
Heliocentric Earth semisquare Heliocentric Apollon 03:42 EDT
Sun trine Zeus in right ascension 04:09 EDT
Mercury semisquare Kronos in right ascension 06:43 EDT
Heliocentric Mercury semisquare Heliocentric Chiron 07:16 EDT
Sun in 24th harmonic to Venus 08:35 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Vulcanus 09:35 EDT
Heliocentric Mercury parallel Heliocentric Chiron 09:43 EDT
Heliocentric Mercury quincunx Heliocentric Zeus 11:14 EDT
Moon at 0° declination 11:28 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Apollon 12:57 EDT
Heliocentric Mercury parallel Heliocentric Pluto 13:56 EDT
Heliocentric Earth square Heliocentric Mercury 15:43 EDT
Heliocentric Mercury square Heliocentric Cupido 18:25 EDT
Mercury parallel True Lunar Node 20:17 EDT

May 30
Heliocentric Mercury parallel Heliocentric Poseidon 02:43 EDT
Heliocentric Earth conjunct Heliocentric Cupido 03:28 EDT
Sun opposition Cupido 03:36 EDT
Sun opposition Cupido in right ascension 07:20 EDT
Heliocentric Venus square Heliocentric Uranus 08:38 EDT
Venus conjunct Hades in right ascension 12:11 EDT
Mercury square Neptune in right ascension 13:19 EDT
Void-of Course Moon begins 15:09 EDT
Heliocentric Mars semisquare Heliocentric Jupiter 15:13 EDT
Venus conjunct Hades 19:13 EDT
Heliocentric Mercury semisextile Heliocentric Neptune 19:22 EDT
Sun square Jupiter 20:34 EDT

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STOCKS TO WATCH: CADA, CREE, OFIX, SONC.

CAM Commerce Solutions (CADA)
NASDAQ; Optionable
First Trade Date: 09/02/1987; 09:30 a.m.
Trading Strategy: The transiting Jupiter/Chiron sesquiquadrate—with planetary lines for Jupiter and Chiron at (G,45,N,0)—helped to trigger a nice short-term run-up in this stock in April when Jupiter conjoined the CADA First-Trade Sun. Now Jupiter is back conjoining the First-Trade Sun again, this time in direct instead of retrograde motion, and CADA has gapped above the Jupiter and Chiron lines. First-Trade Apollon (G,19.24,N,0) has been quite active in setting a trading range, and could act to turn this current move into a double top for the stock. We like the looks of this situation, however, especially since CADA could really take off if it breaks above another increment of the Apollon line. We’ll add a long position to the Model Portfolio early this week, setting our initial stop at 15.88, just below the Jupiter line.

Cree Inc. (CREE)
NASDAQ; Optionable
First Trade Date: 02/09/1993; 09:30 a.m.
Trading Strategy: The current Pluto/Hades opposition has been tangled up with the CREE First-Trade Kronos since the first of the year, and the stock price has slumped accordingly. The impact of that transiting opposition has begun to wane significantly, however, and right on schedule CREE has started to pick up a little positive energy. For much of the past year a Saturn line based on the First-Trade position (G,32.09,N,0) has beautifully defined the trading structure for CREE. If this stock can push above that line to trade at 23.02 or higher we will add a long position to the Model Portfolio, setting our initial stop at 19.79.

Orthofix International NV (OFIX)
NASDAQ
First Trade Date: 04/24/1992; 09:30 a.m.
Trading Strategy: When transiting Jupiter (then in retrograde motion) crossed the OFIX First-Trade IC in late April, it triggered a hefty price decline. More recently, the stock has been churning a bit in a narrow trading range. Now Jupiter is getting ready to cross the IC again, this time in direct motion. That sets up a nice shorting situation, so if OFIX closes below its 200-day exponential Moving Average we will immediately sell this stock short, setting our initial buy stop on the First-Trade Uranus line (G,28.8,N,0) at 45.17.

Sonic Corporation (SONC)
NASDAQ; Optionable
First Trade Date: 02/28/1991; 09:30 a.m.
Trading Strategy: Here’s another case in which transiting Jupiter has set up a short sale during its retrograde passage, and is now ready to repeat that routine in direct motion. With SONC, Jupiter is in opposition to the First-Trade Sun. SONC has been flirting with a First-Trade Pluto line (G,23.03,N,0) which provided significant resistance when its sell-off was triggered in April; this time we’ll use that line to confirm a short sale. In other words, if SONC closes below that line at 30.70 or lower, we will short this stock, setting our initial buy stop on the First-Trade Cupido line (G,23.21,N,0) at 31.89.



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 @ 5/23/2004 10:54:22 AM