For investors who’d rather be smart than lucky

If you were impressed by yesterday’s 200-point turnaround, don’t be. We’ve seen better rallies in an oncology ward. Considering the news – that one of the world’s deadliest terrorists has been silenced forever – we might have expected stocks to go wild. Instead, the Dow Industrials finished up just 7 points on the day, reversed not by the good news but by some regulatory safety switches that were thrown when stocks were freefalling earlier in the session.

Six months ago, if an investor had known Zarqawi’s number would be up the next day, he might have loaded up on stocks and cashed out for a huge profit when the news hit the tape. But when the dust had settled yesterday, the clairvoyant investor would have been lucky to be holding stocks that showed any gain at all. Does this imply that the market could stumble or even drop when bin Laden finally goes to his reward? How would CNBC’s pundits explain that one?  Would they tell us, perhaps, that the circumstances that caused Osama’s death had not quite lived up to the whisper story?  

Bottom line, yesterday’s break-even price action should bring little comfort to bulls, since it tells us that Da Boyz are no longer capable of inciting a short squeeze even when the news is as good as it gets. If good news is about to turn to bad via disappointing Q2 earnings, look out below!

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Business as Usual

While word of Zarqawi’s death was being vetted by a skeptical world yesterday, subscribers to the service were fixated on another tickertape of sorts, the Rick’s Picks bulletin launcher. Using this real-time tool, we noted the purchase of Goldcorp shares at what turned out to be a good price, using no stop-loss for a very rare change. We also established a small tracking position in Microvision (MVIS), based on a query from a subscriber who had been waiting since last January for the stock to fall to my hidden-pivot target, 1.95, from an original 3.48. We also nailed the rally in the 30-year bond future to within a single tick, as the following exchange attest:

06/07/2006 13:10    "I'd like your projections for 30-Year T-Bonds," writes Rose S. "And thanks for the help with Miramar Mining!"

The June contract has consolidated above a 107^07 hidden pivot that used to be resistance, Rose, so my immediate outlook is bullish, with a minimum objective of 108^13. If that target is exceeded by more than two ticks, however, you can infer that the bonds are eager to go still higher.

Update 06/08/2006  12:50: Surprise, surprise. June T-Bond futures shot up to exactly 108^14 for no apparent reason, then receded quickly for reasons equally inscrutable. Thank heaven for technical analysis, which need not explain this sort of nonsense, only to predict it accurately and reliably.

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Learn My Secrets

Would you like to be able to forecast trends and price reversals as accurately and confidently as Rick’s Picks? Have you tried other trading systems, only to find them too complicated or otherwise unhelpful? Then don’t miss my Hidden Pivot Seminar this autumn in New York City. Plans are firming for a weekend session in early October, so please let me know via e-mail if you think you might attend. This will be a no-frills version of the course that I gave in Denver, offered at a significant saving over the original price.

There will probably be just one more session offered after that on the West Coast, but that would be the last for a long while. The course includes post-grad mentoring via a chat group that some of my former students have set up. If you’ve been impressed with the accuracy of my forecasts, this is an opportunity you cannot afford to pass up. Let me hear from you soon, since seat space is limited.

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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 © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com