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The Taipan Group�s 247profits e-Dispatch Baltimore, New York, Chicago, Berlin, Bonn, London and Paris October 4-5, 2004
***What�s up with the S&P�s spike? Hot new trend or cash trap? Our WaveStrength oracle tells all� ***Good riddance, September� now what will October bring?
Current economic, political and security factors are forming a turbulent market climate that will bring masses of unprepared investors to their knees. But a select few inventors who see it coming - and act accordingly - will prosper. You can be one of them. Learn more� ***********************************************
September�s over and done with - and good riddance, if you ask me. Most investors still think that October is the worst month for the markets. There�s some validity to this opinion, given that a number of spectacular crashes have occurred in this month� such as the one in 1929 and the crashette of 1987. Harry S. Dent Jr. writes: �September is clearly when the tax-selling season really hits as professional managers return from summer vacations. Many down years in October have simply been follow-through declines to the downturns that started in September or earlier, and have been offset by sharp rises out of such bottoms in October.� So what�s ahead for October? I asked WaveStrength oracle Adam Lass that question as I ran into him at the coffee counter downstairs this morning. His response arrived in my email box a few hours later: �I hope you didn�t expect a simple answer regarding the markets in general and specifically the S&P�s spike of the past few days that you, too, had noticed. �The market turned on a dime despite a multitude of internal technical and external economic indications that a great deal more downside was in the cards. But as aberrant as the S&P�s upside lurch was, these things do occasionally happen, especially immediately following a key election year event. What is of far more significance to my eye than last Friday�s huge run-up is today�s gap and run at the open, as this move took the S&P beyond the top line of the falling trend for the first time since March. �Does this mean that we have finally moved back into a confirmed bull trend? Or are we looking at a treacherous �island high,� a blowout top featuring prices that the market won�t revisit for months, if not years? That�s certainly what ten million of our closest friends would like to know. �Well, October is certainly the month for a move like this. The Stock Trader�s Almanac notes that October has marked the end of 11 bear markets since 1945. But it�s also one of the riskiest months to get back into the market, as it claims some of the most brutal intra-month declines in history as its own. �I know what my systems call for: they have produced unrelentingly negative signs for the better part of the past nine months. And whereas the overall market trend has been downward (until today), this trend has played out so agonizingly slowly that every time I�ve recommended puts against a disastrous culmination, they have been stopped out by time decay as much as any other market force. �At a moment like this, when one begins to doubt the veracity of internal and corollary indicative systems that, despite extensive back-testing, suddenly do not seem to produce expected results, I am prone to glancing beyond the confines of my workshop for clues. �A quick tour of my competitors detects a certain consensus. Timer Digest editor Jim Schmidt is always a good place to start. He bases his market-timing model on the consensus forecasts of the top market timers. He finds that most of the better forecasters are bullish and has committed his readers fully to the Bull. �But I�ve never been particularly bothered to run against the crowd. Indeed, I have gotten several of the most pivotal moments in recent market history right when the consensus was completely against me. �And I am not quite alone. While four out five of the most successful predictors out there favor the bull, the fifth, Vickers Weekly Insider Report, which tracks the behavior of stock insiders, notes the heavy pace of insider selling in recent weeks, is just 25% invested in stocks right now, and has warned subscribers that any additional insider selling �will be a catalyst for a move to a 100% cash position.� �I find it quite curious that while the mutual funds and 401(k) managers may be reloading their portfolios with blue chips and tech stocks for the beginning of the new quarter, the company insiders are unloading their own shares, the usual sign of a top. �So: hot new trend or cash trap? I can�t honestly say, but I can tell you that we may know for sure as soon as the next 48 to 72 hours. Watch as the market retraces back to the top of the falling trend. If it calls this line support, the ensuing rally will be quite impressive. �But if the S&P sags back inside the previous trend top, the bottom is now some 84 points (7%) below us. And a retracement from this level and of this magnitude would serve as the fourth confirmation of the downside trend, so you can expect the immediate reaction to be quite brutal.� Adam Lass has prepared a special report detailing how his WaveStrength system works: Wall Street�s Forbidden Strategy. �Blacklisted� for Decades - This Controversial Trading Tactic Could Make You 425% Every 5 Months. (That�s good enough to turn $5,000 into $3.5 million in 3 years.) Access your WaveStrength Bonus Report right NOW.
Brad Colburn, who has been keeping you updated on the progress of this incredible venture (and its associated profit opportunity) wrote me today: �I could almost hear the whoops and hollers from the Mojave Desert all the way on the other side of the country� but I barely heard a peep from SpaceDev Inc. (SPDV:OTC-BB). �Before SS1 had even been pushed onto the runway, SPDV raced up to US$2.42. As the launch progressed and SS1 eventually took flight, SPDV dropped in price. As I write, the stock trades for a seemingly measly US$2.15. �I wouldn�t worry. This is shaping up to be an eerily exact copy of last week. After the first X Prize launch last Wednesday, SPDV took a bath. The next day, the stock gapped up and we saw some hot trading. �By now, the media outlets are champing at the journalistic bit to play this event up as much a possible. And there�s some simple math: Nielsen ratings = money in Taipan reader�s pockets. Hold on to SPDV until further notice.�
My hometown paper, Berlin�s �Tagesspiegel am Sonntag,� however, claims that based on a review of 17,657 export permits issued by the German Bundeswirtschaftsministerium (a Teutonic mouthful meaning Federal Economics Ministry), 1,269 German companies exported weapons valued at 7.8 billion euros in 2003 alone - not just to the US, Britain, Italy, Spain, and Bulgaria� but also directly to Iraq. A clear-cut case of �do as we say, not as we do?�
�Just a note to comment on the rise in construction spending. As a builder in the southern plains, we�re seeing the cost of materials rising at an average of 1.5% per month, so of course there is a rise in construction spending. The question is how long can the buyers absorb the increase in prices. My concern is the possibility of a shift to oversupply in housing, if jobs aren�t created as interest rates rise. �I�ve been through several boom and bust cycles, and the sure �tell� at the end of a boom is when last year�s crew chief is building houses for himself today. It�s happening!�
Today�s tradesports.com standings for the 2004 Presidential Election are: PRESIDENT.GWBUSH2004: 59.0/60.0 (Friday�s
standing: 65.0/65.7)
Apollo Group, MDC Holdings Inc., and Yum! Brands Inc. are some of the companies releasing earnings.
�By
a staggering margin of 4 to 1, U.S. military personnel have rejected the presidential
candidacy of Sen. John Kerry, a new survey by Army Times magazine shows. With
4,000 full-time and part-time troops responding, a full 73 percent said they
would vote for President Bush if the election were held today, reports USA
Today, a sister publication of Army Times.�
***Hong Kong�s Hang Sang index soared to above 13,300 before the open� and maintained this lofty level without much change until it closed at 13,359.25, up 239.22 points or 1.82%. Rises like this build up considerable pressure for profit taking. Our indicators point to just such a situation for tomorrow: expect intraday drops of 0.4% to 0.7%.
For tomorrow, our export indicators point to further upside at 0.5%, while the overall market appears to be expecting a drop of 0.5% on profit taking.
This just in from Taipan�s resident Editor-at-Large, Martin Denholm: Well, good riddance to an awful third quarter! Set against a persistent backdrop of galloping oil prices, the Dow and S&P 500 posted their worst numbers since Q1 2003.
So as we race headlong into the final quarter of 2004, will the IPO market look any better? Perhaps� but not by much. Dealogic figures show 162 companies are set to bound onto the stock market this quarter at a total of US$31.4 billion in IPO money. But with the presidential elections dominating the headlines, the newcomers will find it tough. It�s worth remembering, however, that from January through September, IPO volume and revenue skyrocketed by 407% (to US$29 billion) and 327% (to US$1.5 billion), respectively.
It got off to a bad start today, as US factory orders declined 0.1% in August - the first drop in four months. Durable goods orders fell 0.3%. Tomorrow brings the latest service sector report. But arguably the most important item will be the September jobs report on Friday, just hours before the second presidential debate between Messrs. Bush and Kerry in St. Louis. Should be an eventful day. Get set for another flurry of corporate earnings reports too, which Standard and Poor�s expects will be up a solid 14%. You never know - that could be the spark to take the market higher. But oil prices remain the dark cloud hanging over Wall Street, so while I feel the market has room to move higher, expect gains to be somewhat tempered.
General Motors led the way with a 25% jump from a year ago, while DaimlerChrysler enjoyed a 15% gain. Japanese heavyweights Toyota and Nissan also posted double-digit increases. But the misery continued for Ford, with the Detroit heavyweight posting a 4% sales loss - the seventh month out of nine that its monthly sales were down. Sales at luxury brands Jaguar and Land Rover plunged around 40% each. While those results are bad enough, they could actually be worse were it not for the usual enticing incentives. Some companies actually offered 0% financing on six-year loans. Phew - talk about desperation! And don�t be fooled by GM, either. Despite its change in fortunes, the company is still struggling - particularly in Europe, where it�s lost a staggering US$3 billion since 2000. CEO Rick Wagoner said last week that GM�s plan to break even there is �way behind� schedule. Hardly surprising when you consider the higher costs in Europe. And with unemployment sky-high and consumption at rock bottom, not many Europeans are in the mood to buy new cars. GM has warned it may close a factory in Europe to cut costs. OK, I�ll be on vacation the rest of this week so I�ll talk to you again next Monday. Take care till then.
The surprising truth about defense and homeland security stocks: Investors who run out and blindly load up on defense stocks to profit from the boom in military spending and homeland security could lose their shirts. But my proven �Forward Earnings Forecaster� system - which has already generated gains of 79%, 155%, 232%, 270%, even 6,410% - has identified a handful of defense stocks ready to return triple-digit gains to investors who get in now.
(That�s good enough to turn $5,000 into $3.5 million in 3 years.)
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Title: Hot new trend vs. cash trap
