FINANCIAL CYCLES WEEKLY UPDATE #0424 – June 13-19, 2004 with TIM BOST

COMMENT: The death of former U.S. President Ronald Reagan not only brought an unexpected interruption to market action last week; it also gave us much to think about. It was, of course, an event that was heavily politicized, with politicians and media pundits alike showing a remarkable willingness to rewrite history to suit current agendas as they bent over backwards to eulogize the late president. Reagan’s role in ending the Cold War got a lot of emphasis, without too much mention of his role in Iran-Contra or the loss of 50,000 Nicaraguan lives to death squads. The positive impact his administration made on the U.S. economy was duly noted, with little attention paid to the human impact of some of his budget cuts—like his gutting of the Department of Housing and Urban Development, which ultimately created the problem of homelessness which still persists today.
The oversights and revisionism can be forgiven, of course. After all, Reagan truly was an optimist and an effective communicator, and it’s always more fitting to remember the good points at a funeral. But there’s a lesson here for us as traders. If we only look at the positive prospects and overlook the downside, we may begin to base our trading approach on hope instead of analysis, and we may be reluctant to take losses quickly. And instead of getting clear information from current market action, we may find ourselves dwelling on the past, and on the way a stock used to perform, which is the way we wish it would perform right now.
These are all attitudes that can be dangerous to our wealth. Especially when current events become a replay of the past, and a distorted one at that, we need to be cautious about letting them color our approach to market dynamics.
Have a great week!

*****

THE WEEK AHEAD

We’re looking for earnings reports this week from Circuit City Stores (CC), URS Corporation (URS), FactSet Research Systems (FDS), Pier 1 Imports (PIR), Bear Stearns (BSC), Oracle (ORCL), Best Buy (BBY), KB Home (KBH), Jabil Circuit (JBL), Adobe Systems (ADBE), Solectron (SLR), CarMax Inc. (KMX), American Healthways (AMHC), Winnebago Industries (WGO), and Red Hat (RHAT).
The economic reports for the week will include April Business Inventories, the June Survey from the Philadelphia Federal Reserve, and May Retail Sales, Consumer Price Index, Housing Starts, Capacity Utilization, and Industrial Production, as well as the May Leading Indicators. The Producer Price Index, which scheduled for release last Friday but was delayed, is also likely to be released this week. In short, there’s a lot of economic data that could move the markets in a serious way.
The astrological dynamics for the week are mainly colored by the Sun/Hades conjunction and the Mars/Chiron opposition, which add some potential for confrontation and volatility, both in and out of the markets. We’ll also get Mercury conjoining Hades and opposing Pluto this week, so the rhetoric could get nasty in the political arena and in international relations. A void-of-course Moon throughout the trading day on Tuesday offers a chance to step aside and become observers instead of participants, while the New Moon at the end of the trading day on Thursday is likely to signal a significant shift in energies as the trading week comes to a close. There’s a Zeus direct station over the weekend, so we’re likely to see some conflicts or catastrophes that command the attention of speculators—watch commodities prices closely, especially precious metals!

*****


GLOBAL EQUITIES MARKETS LAST WEEK

In spite of the fact that the U.S. trading week was unexpectedly shortened by the closing of all markets for the Ronald Reagan state funeral, it was a positive week for equities around the globe. Asian stocks once again showed the most bullish tendencies, but European issues also put in a respectable showing and U.S. markets were moderately higher.

Dow Jones Industrial Average – up 1.63%
Dow Jones Transportation Average – up 1.08%
Dow Jones Utilities Average – down 0.09%
S& P 500 – up 1.24%
NASDAQ Composite Index – up 1.07%
Russell 2000 – up 0.24%
London FTSE-100 – up 1.14%
Paris CAC-40 – up 1.56%
Frankfurt DAX – up 2.67%
Sydney All Ordinaries – up 0.10%
Tokyo Nikkei – up 4.98%
Hong Kong Hang Seng Index – up 4.13%
Singapore Straits Times Index – up 2.69%

*****


FINANCIAL CYCLES MODEL PORTFOLIO


POSITIONS CLOSED DURING THE PREVIOUS WEEK: OFIX, EWBC.

We closed two Model Portfolio positions during the past week, with one winner and one loser producing a net profit of $1,090.00.

On June 8 we bought to cover 200 shares of Orthofix International NV (OFIX) at 44.05, taking a loss of $160.00 (a 1.85% loss in 9 trading days).

On June 9 we sold 200 shares of East West Bancorp Inc. (EWBC) at 60.50, taking a profit of $1,250.00 (an 11.52% gain in 16 trading days).

*****


POSITIONS ADDED TO THE PORTFOLIO DURING THE PREVIOUS WEEK: ADVNB, KNGT.

We added one long position and one short position to the Model Portfolio during the previous week.

We bought 600 shares of Advanta Corporation Class B (ADVNB) at 16.85 on 06/09/04, setting our initial stop at 15.63.

We sold short 300 shares of Knight Transportation (KNGT) at 27.50 on 06/10/04, setting our initial buy stop at 28.40.

*****


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 92 completed trades, with 41 winners and 51 losers bringing us a total net profit of $10,978.50. The largest profit for a single trade has been $5,250.00; the largest single-trade loss has been $750.00; the average profit per trade has been $119.33. The mean duration of our trades has been 9.1 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.

*****


CURRENT POSITIONS IN THE MODEL PORTFOLIO

Advanta Corporation Class B (ADVNB) – bought 600 shares at 16.85 on 06/09/04; currently 16.74. Raise stop to 16.10.

Avon Products (AVP) – bought 100 shares at 78.75 on 04/23/04; split 2-for-1 on 05/28/04. Currently hold 200 shares at 44.74. Raise stop to 44.35.

E G L Inc. (EAGL) – bought 500 shares at 20.05 on 05/17/04; currently 23.30. Raise stop to 23.00.

Knight Transportation (KNGT) – sold short 300 shares at 27.50 on 06/10/04; currently 28.02. Buy stop set at 28.40.

Knightsbridge Tankers (VLCCF) – bought 500 shares at 18.69 on 05/14/04; currently 24.65. Raise stop to 22.25.

Maxim Integrated Products (MXIM) – bought 200 shares at 49.25 on 06/02/04; currently 48.91. Raise stop to 48.00.

Old Dominion Freight Lines (ODFL) – bought 200 shares at 37.00 on 05/17/04; now 300 shares following 3-for-2 split on 05/21/04. Currently 27.18; raise stop to 27.00.

Witness Systems Inc. (WITS) – bought 800 shares at 12.75 on 06/02/04; currently 13.52. Raise stop to 12.85.

*****


STRONGEST MARKET SECTORS LAST WEEK

Security & Protection Services; Healthcare Information Services; Catalog & Mail Order Houses; Network & Communications Devices; Resorts & Casinos.

*****


WEAKEST MARKET SECTORS LAST WEEK

Jewelry Stores; Drug Delivery; Gaming Activities; Generic Drugs; Diagnostic Substances.

*****


KEY ASTROLOGICAL EVENTS DURING THE COMING WEEK

June 13
Heliocentric Mercury conjunct Heliocentric Admetos 00:35 EDT
Heliocentric Earth quincunx Heliocentric Mercury 01:30 EDT
Heliocentric Mercury trine Heliocentric Chiron 01:49 EDT
Heliocentric Mercury sextile Heliocentric Vulcanus 02:14 EDT
Sun trine Apollon 02:39 EDT
Heliocentric Mercury parallel Heliocentric Mars 03:14 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Zeus 03:22 EDT
Heliocentric Earth semisextile Heliocentric Chiron 03:29 EDT
Heliocentric Mercury semisextile Heliocentric Hades 03:39 EDT
Heliocentric Mercury quincunx Heliocentric Apollon 04:30 EDT
Sun semisextile Admetos 05:25 EDT
Mercury semisextile Saturn in right ascension 05:27 EDT
Mercury in 24th harmonic to Kronos 05:32 EDT
Heliocentric Earth quincunx Heliocentric Vulcanus 06:10 EDT
Mars opposition Chiron in right ascension 10:56 EDT
Sun conjunct Hades 15:03 EDT
Heliocentric Earth opposition Heliocentric Hades 15:12 EDT
Sun conjunct Hades in right ascension 16:27 EDT
Heliocentric Mercury quincunx Heliocentric Venus 17:43 EDT
True Lunar Node retrograde station 17:58 EDT
Heliocentric Earth sextile Heliocentric Apollon 20:37 EDT
Heliocentric Venus sesquiquadrate Heliocentric Mars 23:28 EDT
Heliocentric Mercury contraparallel Heliocentric Cupido 23:43 EDT

June 14
Markets closed in Australia
Mars sesquiquadrate Cupido 01:34 EDT
Venus square Jupiter in right ascension 03:50 EDT
Heliocentric Mercury enters Gemini 06:37 EDT
Heliocentric Mercury parallel Heliocentric Vulcanus 06:51 EDT
Sun semisquare True Lunar Node in right ascension 08:41 EDT
Mercury parallel Sun in right ascension 09:33 EDT
Sun parallel Mercury 09:38 EDT
Heliocentric Mercury semisquare Heliocentric Saturn 10:15 EDT
Heliocentric Mercury semisextile Heliocentric Kronos 10:53 EDT
Mercury trine Neptune in right ascension 11:54 EDT
Heliocentric Mercury parallel Heliocentric Saturn 14:06 EDT
Heliocentric Mercury parallel Heliocentric Hades 15:12 EDT
Venus contraparallel Cupido 16:25 EDT
Venus contraparallel Cupido in right ascension 17:31 EDT
Mercury sesquiquadrate Poseidon in right ascension 18:13 EDT
Mercury parallel Kronos in right ascension 19:09 EDT
Mercury parallel Kronos 20:23 EDT
Heliocentric Earth in 24th harmonic to Heliocentric Cupido 21:17 EDT
Heliocentric Mercury square Heliocentric Uranus 22:05 EDT
Void-of-Course Moon begins 22:34 EDT

June 15
Heliocentric Venus semisquare Heliocentric Neptune 00:00 EDT
Venus semisextile Saturn 00:38 EDT
Mars parallel Saturn 03:05 EDT
Mars parallel Saturn in right ascension 03:07 EDT
Heliocentric Earth contraparallel Heliocentric Mercury 05:03 EDT
Heliocentric Mercury quincunx Heliocentric Poseidon 06:06 EDT
Sun semisextile Vulcanus in right ascension 06:20 EDT
Heliocentric Mercury parallel Heliocentric Kronos 06:35 EDT
Mercury sesquiquadrate Poseidon 08:45 EDT
Sun semisextile Mars 09:14 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Admetos 10:44 EDT
Mercury opposition Pluto 11:07 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Chiron 12:06 EDT
Heliocentric Mercury semisquare Heliocentric Vulcanus 12:21 EDT
Heliocentric Mercury trine Heliocentric Zeus 13:27 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Hades 13:43 EDT
Sun quincunx Chiron 14:10 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Apollon 14:32 EDT
Mercury semisextile Admetos in right ascension 15:00 EDT
Mars opposition Chiron 16:32 EDT
Heliocentric Mercury contraparallel Heliocentric Venus 16:57 EDT
Mercury opposition Pluto in right ascension 17:52 EDT
Heliocentric Mercury opposition Heliocentric Cupido 18:17 EDT
Heliocentric Venus enters Capricorn 20:04 EDT
Venus semisquare Mars in right ascension 20:14 EDT
Mercury trine Apollon in right ascension 20:35 EDT
Void-of-Course Moon ends 21:44 EDT

June 16
Mercury semisextile Vulcanus 04:34 EDT
Sun semisquare True Lunar Node 05:41 EDT
Mercury trine Apollon 06:35 EDT
Mercury semisextile Admetos 08:25 EDT
Heliocentric Mercury sextile Heliocentric Mars 08:53 EDT
Heliocentric Mercury trine Heliocentric Neptune 11:02 EDT
Mars parallel Hades 11:48 EDT
Sun quincunx Chiron in right ascension 12:42 EDT
Heliocentric Venus opposition Heliocentric Kronos 12:50 EDT
Mercury conjunct Hades 12:52 EDT
Mercury conjunct Hades in right ascension 13:53 EDT
Mars parallel Hades in right ascension 14:26 EDT
Mercury semisquare True Lunar Node in right ascension 19:16 EDT
Heliocentric Mercury semisextile Heliocentric Saturn 19:56 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Kronos 20:14 EDT

June 17
Mercury semisextile Vulcanus in right ascension 05:55 EDT
Mercury quincunx Chiron 07:45 EDT
Mercury semisquare True Lunar Node 13:59 EDT
Heliocentric Mercury opposition Heliocentric Pluto 14:35 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Poseidon 15:14 EDT
Heliocentric Mars opposition Heliocentric Neptune 15:53 EDT
New Moon 16:27 EDT
Void-of-Course Moon 16:27 – 22:37 EDT
Mercury quincunx Chiron in right ascension 18:11 EDT
Mars semisquare Jupiter in right ascension 18:41 EDT
Heliocentric Mercury square Heliocentric Jupiter 18:44 EDT
Heliocentric Mercury semisextile Heliocentric Admetos 19:49 EDT
Heliocentric Mercury quincunx Heliocentric Chiron 21:20 EDT
Heliocentric Mercury semisextile Heliocentric Vulcanus 21:24 EDT
Heliocentric Mercury conjunct Heliocentric Hades 22:47 EDT
Heliocentric Mercury trine Heliocentric Apollon 23:35 EDT

June 18
Mercury semisextile Mars 00:46 EDT
Sun in 24th harmonic to Venus 01:32 EDT
Mercury in 24th harmonic to Venus 08:59 EDT
Heliocentric Venus sextile Heliocentric Uranus 09:31 EDT
Mars semisquare Jupiter 12:17 EDT
Heliocentric Mars parallel Heliocentric Admetos 14:02 EDT
Heliocentric Earth opposition Heliocentric Mercury 17:13 EDT
Sun conjunct Mercury 17:24 EDT
Sun conjunct Mercury in right ascension 17:43 EDT
Heliocentric Chiron opposition Heliocentric Vulcanus 18:24 EDT
Heliocentric Mercury sesquiquadrate Heliocentric Neptune 20:06 EDT
Venus semisquare Mars 21:10 EDT
Heliocentric Mercury semisquare Heliocentric Mars 22:13 EDT

June 19
Heliocentric Saturn in 24th harmonic to Heliocentric Kronos 00:56 EDT
Heliocentric Mercury enters Cancer 01:04 EDT
Heliocentric Mercury conjunct Heliocentric Kronos 05:19 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Saturn 05:20 EDT
Venus square Jupiter 05:37 EDT
Mercury in 24th harmonic to Saturn 08:52 EDT
Heliocentric Earth semisquare Heliocentric Neptune 12:20 EDT
Mercury semisextile Mars in right ascension 12:49 EDT
Heliocentric Venus in 24th harmonic to Heliocentric Pluto 14:17 EDT
Mercury enters Cancer 15:49 EDT
Heliocentric Mercury trine Heliocentric Uranus 16:38 EDT
Heliocentric Venus sextile Heliocentric Poseidon 16:42 EDT
Mercury sesquiquadrate Neptune 16:59 EDT
Sun parallel Kronos in right ascension 18:13 EDT

June 20
Heliocentric Mercury trine Heliocentric Poseidon 00:29 EDT
Heliocentric Mercury opposition Heliocentric Venus 03:08 EDT
Mercury conjunct Kronos in right ascension 03:37 EDT
Mercury conjunct Kronos 03:40 EDT
Venus sesquiquadrate Chiron in right ascension 05:07 EDT
Heliocentric Mercury semisquare Heliocentric Admetos 05:08 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Vulcanus 06:45 EDT
Void-of-Course Moon 06:46 – 11:05 EDT
Heliocentric Mercury square Heliocentric Zeus 07:53 EDT
Sun in 24th harmonic to Saturn 08:02 EDT
Heliocentric Mercury in 24th harmonic to Heliocentric Hades 08:10 EDT
Heliocentric Venus sesquiquadrate Heliocentric Admetos 11:01 EDT
Heliocentric Mercury quincunx Heliocentric Cupido 12:48 EDT
Zeus direct station 15:37 EDT
Mercury sesquiquadrate Neptune in right ascension 17:28 EDT
Heliocentric Venus in 24th harmonic to Heliocentric Chiron 17:58 EDT
Sun enters Cancer; Summer Solstice 20:56 EDT
Heliocentric Earth enters Capricorn 20:56 EDT
True Lunar Node semisquare Hades in right ascension 21:34 EDT
Heliocentric Venus square Heliocentric Zeus 21:50 EDT
Sun sesquiquadrate Neptune 23:05 EDT

*****


STOCKS TO WATCH: AACE, CGNX, DAKT, DSPG, MATW, TRMB.

Ace Cash Express (AACE)
NASDAQ
First Trade Date: 12/02/1992; 09:30 a.m.
Trading Strategy: The set-up we were looking for in this stock didn’t come during the shortened trading last week, so we’re holding it over on our watch list. If we get a daily close for AACE at 26.22 or higher we will enter a long position, setting our initial stop at 23.75.

Cognex Corporation (CGNX)
NASDAQ; Optionable
First Trade Date: 07/20/1989; 09:30 a.m.
Trading Strategy: With Jupiter crossing its First-Trade Ascendant this stock has had a good price run-up lately, although it’s still trading at more than 5% off its 52-week high. The Sun conjoining First-Trade Jupiter should help sustain the positive dynamic for the short term, so we’re considering a long position for the Model Portfolio. A Neptune line (G,28.05,N,0) has provided some important support for CGNX, while its price goal is to break through an important Hades line (G,68.9,N,0). The 50-day moving average has been tracking a key Saturn line (G,27.93,N,0) however, so we’ll consider that to set our initial stop at 32.66.

Daktronics Inc. (DAKT)
NASDAQ; Optionable
First Trade Date: 02/10/1994; 09:30 a.m.
Trading Strategy: We’re continuing to watch DAKT this week. If we get a daily close above a key Vulcanus line at a price of 24.03 or higher, we will add a long position in DAKT to the Model Portfolio. Our plan is to set our initial stop on the next-lowest increment of that line at 22.98.

DSP Group Inc. (DSPG)
NASDAQ; Optionable
First Trade Date: 02/11/1994; 09:30 a.m.
Trading Strategy: With a First-Trade date right after DAKT, this stock is responding in a similar way. Saturn crosses the First-Trade IC this week, with Uranus conjunct First-Trade Mercury and the Sun/Hades conjunction conjoining First-Trade Kronos. It is a Vulcanus line (G,10.67,N,0), however, that has attracted our attention as a key price trigger. It’s been offering some resistance lately, but if DSPG closes above this line at 27.25 or higher for two consecutive trading sessions, we’ll add a long position to the Model Portfolio. Our initial stop will be set where a lower increment of that line crosses Pluto (G,23.8,N,0) at 26.14.

Matthews International Corporation (MATW)
NASDAQ
First Trade Date: 07/20/1994; 09:30 a.m.
Trading Strategy: Jupiter transiting the First-Trade Ascendant has provided a positive dynamic for this stock, especially with transiting Poseidon conjoining First-Trade Jupiter and Cupido crossing the First-Trade IC at the same time. But this stock is currently trading in a channel defined by retrograde Venus (G,16.04,N,0) with resistance from Cupido (G,23.43,N,0) in play as well. Our plan is thus to sell MATW short this week, setting our initial buy stop at 32.01.

Trimble Navigation Ltd. (TRMB)
NASDAQ; Optionable
First Trade Date: 07/20/1990; 09:30 a.m.
Trading Strategy: Jupiter is on the First-Trade Ascendant here, and there doesn’t seem to be much in the way of continuing price appreciation. A Venus line (G,90.5,N,0) has been providing support for the price action, with Hades (G,69.9,N,0) offering resistance. Our plan is to add a long position to the Model Portfolio this week, setting our initial stop at 25.54.


FINANCIAL CYCLES (ISSN 1055-8527) is published by Taylor-Bost Consulting and edited by Tim Bost at 2132 Beneva Road, Sarasota, FL 34232 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.

*****

posted by Tim Bost @ 6/13/2004 01:38:17 AM