"Market Monitor" - Mark Lebovit, chief market strategist for VRTrader.com
Friday, November 18, 2005PAUL KANGAS: My guest market monitor this week is Mark Lebovit, chief market strategist for vrtrader.com. And welcome back to NIGHTLY BUSINESS REPORT Mark. Great to see you.
MARK LEIBOVIT, CHIEF MARKET STRATEGIST, VRTRADER.COM: Always glad to be here, Paul. Thank you.
KANGAS: A lot of analysts see the recent upturn in stocks as the start of the traditional year-end rally. Do you buy that? Or what do you believe if there`s something else behind this rally.
LEIBOVIT: I think we have a real market here Paul. This is more than just the year-end rally. Yes, we may see a little profit taking after Thanksgiving and there might be some hesitation along the way. But I think this is a multi-month move that could carry anywhere from March to next summer. We sort of have a washout technical pattern in October which in a way mirrored what we saw in 2002. I`m looking for a much more dynamic move here and lasting several months and to dramatically higher levels.
KANGAS: Staying power it has. But as a technical analyst, what are your target levels for the Dow, let`s start with that.
LEIBOVIT: I don`t know if we`re going to see it in next several months, but I think over the course of the next year, you could really see this Dow take off. I think in going to that 11,400 high up to possibly 13,000 as a possibility.
KANGAS: Here we are at 10,766 today.
LEIBOVIT: Right. I`m looking at the NASDAQ Composite, possibly at 2,700. It`s around 2,200 right now.
KANGAS: Right, right.
LEIBOVIT: The S&P short-term target, 1265, I think we can get to about 1430. So I mean, there`s some dramatic numbers here. If you look back, you have to step back a bit. You got to look at the weekly and monthly charts, not the short-term daily action and see what`s really been happening here and this market has been climbing a wall of worry all year. They just can`t knock this market down. With all the new stories, worry about the war, potentially higher interest rates, overspending on the part of the government, on and on. This market has been telling you it`s just pent up building a base, building cause as they call to it kick off to bigger and higher levels.
KANGAS: Wow.
LEIBOVIT: I know it sounds uncanny, but that`s what it looks like.
KANGAS: You are bullish an analyst as I`ve come across in a long time.
LEIBOVIT: Well, this might be the final thrust, the move into 2007 but it`s there.
KANGAS: On your recent visits with us, you said you were very bullish long term on gold. But its rise would be hampered by a strong dollar. Well, both of these things have been rallying sharply. What is going on here? How can they both do this?
LEIBOVIT: Well, you know, this is the problem with tying markets together inversely. In fact I cautioned when I was on in May, you got to be careful about this. But at the time that`s what it looked like. In August they diverged. The dollar as we predicted continued strong and continues strong. The dollar is in its own world (ph). Gold`s in its own world and gold just took off here and of course, we`re sort of perennial bulls on gold. We have a vision that we`re in a 15 or 20-year bull market, so we try to keep positions.
KANGAS: During your last visit on May 20th, you had two buy recommendations. Let`s have a look and so how they`ve been. Coca-Cola just can`t seem to get out of its own way. It`s down 6 percent from $45 to $42 and a fraction. And America West Holdings, now, this was recommended at $5.17. It was merged into U.S. Air Group, a new stock, right?
LEIBOVIT: Correct and there was a .40 conversion between the old stock and the new stock from the American West shareholders to the U.S. Group.
KANGAS: So That would be a big move up, in other words .4 of a share of the new U.S. Air group, which is 33 or so, that would be worth about $13.
LEIBOVIT: Right. It`s almost a triple. It`s unbelievable, great move on a hometown airline here in Phoenix, unbelievable.
KANGAS: Do you have any new recommendations, new ones?
LEIBOVIT: Yes, let`s look at a few. My number one pick, Microsoft. The stock has been building a base for the last couple three years. It`s trading around 28. I see the stock going anywhere from the mid-30s possibly to the low 40s. Let`s call it mid 30s. It`s actually been one of the key factors in the NASDAQ Composite acting so strong recently.
KANGAS: OK. We just have a minute left Mark.
LEIBOVIT: OK, Cameco, CCJ, uranium play. This is sort of an undiscovered area. A lot of people have been talking about it, but a big move in uranium is coming with the building of uranium plants and so forth.
KANGAS: The stock had a big move already.
LEIBOVIT: A big move and I can see it doubling to 100. It`s in the low 50s right now. Number three Miramar Mining, MNG, a low-priced gold stock, this is a spec. It`s about a buck and a half, but this could be a $4 or $5 stock.
KANGAS: That trades on the American.
LEIBOVIT: It trades on the American. And Finally GLD, which is the ETF for gold bullion. We`re looking for 4500 an ounce now and $800 in the next two or three years. So this is trading around 47, pure play on gold bullion without owning the gold.
KANGAS: Do you personally own these securities?
LEIBOVIT: I don`t own any of these. I try to avoid buying them so there`s no conflict. We try to buy them after we recommend them.
KANGAS: OK, well, that`s an interesting way to do it. But you like them well enough to buy them eventually.
LEIBOVIT: We`ll try to buy them next week.
KANGAS: OK, Mark, I want to thank you very much for your observations, most interesting.
LEIBOVIT: Thank you, Paul.
KANGAS: My guest Mark Leibovit of vrtraders.com.
