Stockscom Report for Sunday Dec 29 2002

Publisher: Colin Alexander     Editor: Ken Wilson

Subscriptions and Administration: Pierre Fichaud (toll-free: 866-487-9711)

 

Market Synopsis

 

*** We are publishing an abbreviated newsletter this week ***

 

The markets are on worry-watch now with the potential for war not only in Iraq, but also in North Korea now where their president has ordered UN inspectors to leave and authorized that the country’s nuclear station, Yongbyon, be restarted. This authorization came in response to the halt of oil shipments from the US, which in turn was in response to North Korea’s announcement in October that it had covertly continued the nuclear weapon program in violation of the 1994 agreement with the US.

 

Lest we forget, we still have Saddam Hussein in Iraq and there is no doubt that he is the man most wanted by George W. Bush. War preparations are afoot with the aircraft carrier and another carrier being ordered to prepare to leave for the gulf in four days. At the same time, Defense Secretary Donald Rumsfeld has apparently ordered a significant deployment of ground forces to the region. Meanwhile, Saudi Arabia has agreed to allow US forces, the use of Saudi Arabian soil for base operations.

 

Evidently war on two fronts does not address concerns that Americans have with respect to jobs and the oft-repeated story of economic recovery.

 

To end the year, the charts are telling us that investors are nervous about putting more money in a machine that has sucked away a chunk of their savings over the past two years. Thursday’s market action was especially brutal with a large outside day on Nasdaq signaling the likelihood of further downward movement in the days ahead. Not only did we not see a Santa Claus rally, we aren’t likely to see fund buying to end the year.

 

Gold is certainly the one sector that is winning right now. Price range for the week remained steady and though stochastics are heavily overbought, there is less chance for significant retracement while the geopolitical situation remains tense. Other factors aiding the price of gold include the Fed’s fight against any sign of deflation and the weak US dollar against European and Japanese currencies.

 

New Buy Recommendations:

 

None.

 

New Short Sales

None.

 

Stock Positions to Sell/Exit:

 

None.

 

List of Current Stock Recommendations:

Action Ratings. The following is the legend for designating immediate action
for our stock recommendations. The first is B, meaning the stock is timely
to buy but the case for doing so right here is not overwhelming. Either the
stock may have gotten ahead of itself and may be vulnerable to a retracement or
else the stock has been performing disappointingly but may simply be
regrouping. B+ and B++ indicate stocks for which there is a technical case
to buy now, with plusses adding weight according to how many there are, up
to a maximum of two. Stocks rated H are ones to hold, awaiting confirmation
to buy more or to sell. SELL, of course, means what it says. It seldom pays
to override this designation. In the case of stocks held short, the rating is S where positions should be retained. S+ and S++ indicate stocks for which there is a technical case to add to the positions with plusses adding weight similar to long positions. The maximum number of plus signs is 2.

Stocks marked # are eligible as Canadian content in Canadian RSP funds. Otherwise there is a 30 percent restriction on foreign stocks held in these accounts.

Date of Entry	Name	Symbol	Entry Price	Current Price	Action Rating
07/29/02	Amgen	AMGN	43.80	49.54	H
12/16/02	Glamis Gold	GLG #	10.40	11.29	B
12/16/02	Gold Fields	GFI	14.68	14.45	B
12/16/02	Goldcorp	GG #	12.75	13.09	B
12/16/02	Harmony Gold	HMY	16.98	17.70	B
12/16/02	Hecla Mining	HL	4.74	5.06	B
10/21/02	Petsmart	PETM	19.95	16.85	H
10/21/02	CP Ships	TEU #	12.20	13.55	H