Rick’s Picks

Wednesday, November 24, 2004

For investors who’d rather be smart than lucky

A weak dollar continues to flirt with a key hidden pivot target we’ve had in our crosshairs predictsince mid-September.  The Dollar Index was trading near 90 at the time, as some of you may recall. But when it started to show fatigue, I projected a decline to a potentially important bottom at 82.72, a clear and distinctive hidden pivot.  Although that number has yet to be touched, each successive low over the past week or so has brought the Index closer to our objective, albeit one agonizing inch at a time. Tuesday’s bottom at 82.81 was close enough that we should look for a resolution of the dollar’s pain and suffering shortly. My prediction is that it will either turn sharply higher from these levels; or it will continue to sink, presumably to at least 77.60, the closest important hidden-pivot support below.

The dollar’s plight has dominated the financial headlines for the last few weeks, generating fevered speculation concerning whether the Fed and Mr. Bush are inclined to let it continue to fall. Fevered, though, we need not be, since we can simply play it coldly by the numbers. And they are no more complicated than this: If the Dollar Index overshoots 82.82 by more than a few ticks, it will fall at least 7 percent further, to 77.60. Alternatively, if the Dollar Index rallies next week, it could be the start of more significant move that, once above 85.67, would continue for at least six to eight more weeks. This will be a dead-cat bounce, and no matter how powerful, we should not mistake it for a major trend change. We’ll be able to gauge the rally’s strength each step of the way, and to predict how much further it might go, because the path will be strewn with precisely located hidden-pivot obstacles.   Have a great holiday! I’ll talk to you next on Monday, via our scheduled Q&A marathon.

***

Two-Tick Stops for E-Mini?

Is it possible to trade the E-mini S&P using stop-losses of a point or less? Rick’s Picks recommends two- and three-tick stops all the time in this vehicle. Come visit our archive to see how accurate day-in-advance forecasts can be. You can now get a free 24-hour pass to the site without having to provide credit card information, so check out our latest predictions    

***

Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2004, Rick Ackerman. All Rights Reserved. www.rickackerman.com