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[TTHQ Staff]

Almanac Investor Alert: Weekly Update - 9/8/2005
*** Climbing the Great Wall of Worry ***

Weekly Changes

DOW

10595.93
136.30
1.30%

S&P500

1231.67
10.08
0.83%

NASDAQ

2166.03
18.13
0.84%

__________________________________________


Oil is in the stratosphere. Inflation is a reality. There is a housing bubble AND a major US city lay in ruin. Last weeks market action was disconcerting to say the least. Wall Street is climbing the wall of worry. An oft used saw on the street, yet current market action epitomizes it to a tee. The Market should be retreating or at least flat, but is presses forward like the seasoned trooper we have grown accustomed to. We will maintain our bearish stance at least until the market pulls back which we feel will occur sooner rather than later.

Economic Indicators

Forget about looking at them, at this juncture they are useless. Next week the CPI and the PPI are going to be interesting to say the least, but far from representing reality. Will they reveal the stark reality that is clear to anyone who has visited a supermarket lately? Ask the proprietor of your local deli or the owner of your local pub whether his costs are going up. I guarantee an emphatic Yes! followed by I am trying to not raise my prices! Let s see if the massaged inflationary indicators will paint a different picture.

The Aura of the Triple Witch

September Triple Witching is not to be trifled with. The Dow has risen ten of the last fifteen years on Monday but nine losses were registered on Triple-Witching Friday. Triple-Witching Week can be cruel falling in five of the last six years. The week after Triple Witching has been brutal, down twelve of the last fifteen, averaging a Dow loss of -1.1%.

The Oil Situation

There is interesting chatter about gasoline futures trading on the MERC. Up here in the North East, regular unleaded gas surged in lock-step with futures contracts and have barely inched down even though both gasoline and crude futures have eased. The question is, Should something as important as gasoline be subject to unpredictable wild market gyrations? Is trading gasoline futures tantamount to trading drinking water futures? Also, the gas station owners have gotten Elliot Spitzer s attention; if he finds the slightest impropriety bad times loom for them.

Market at a Glance

Fundamental: Weak. The impact of Katrina on the economy is being underestimated and spun bullishly. This is arguably the greatest disaster on US soil in modern history. A major US port and city has been obliterated. Years from now it will recover in some shape and form. Once the market gets wind of the damper this will put on an already tepid economy, the stock market is likely to fall. Past shocks were not always felt immediately.

Technical: Struggling. Almost like a rallying cry around our devastated countrymen, stocks regained some ground after the Gulf coast was walloped. Breadth was solid last week, NYSE Advancers beat decliners 2.5 to 1 but new 52-week lows were 105. And aside from the big move on the normally bullish day after Labor Day, price and volume action have not impressed.

Monetary: Muddy. In the face of one of the largest disasters and the forthcoming shockwaves will Greenspan shift policy? There is literally no consensus on the street of what will happen at the next FOMC meeting on the 20th. The ¼ point foregone conclusion is not certain. What does that mean? Is that good? Muddy indeed!

Seasonal: Bearish. September is historically the worst month on all three major indices. And the week after Triple Witching notoriously brutal. We are in midst of the Worst Six Months for the Dow and S&P and Worst Four Months for NASDAQ. Tighten all stop losses. Take profits when you have them. Limit new buying and only increase established positions on dips.

Stock & ETF Updates

Datatrak (DATA) was stopped out @ 9.35 on 9/1/05.

Pacific Ethanol (PEIX) was added to the portfolio on 9/1/05 @ 7.75
STANDARD TRADING GUIDELINES!

BUY LIMITS ARE GOOD TILL CANCELLED. ALL STOPS EFFECTIVE ONLY WHEN THE STOCK CLOSES BELOW THE STOP PRICE. ALWAYS SELL HALF ON A DOUBLE.

Please trade carefully.

Those who study market history are bound to profit from it.

Sincerely,

Jeffrey A. Hirsch, Editor & Publisher
J. Taylor Brown, Vice President

The next issue will be available after the close on September 15th, 2005.


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