I got distracted after lunch yesterday and was somewhat surprised to see, in calling up some charts after the close, that stocks had gone all silly in the final two hours. My first reaction to the 116-point rally was to check a Google news page to see if world peace had perhaps broken out while I was on the phone. No such thing. In fact, Hezbollah was sticking to its guns, literally, giving rise to the following headline:  “Iran’s Hezbollah Set for World War III.” But this is hardly the kind of thing that rattles Wall Street any more. In fact, the monster box office receipts from the “Pirates of the Caribbean” were getting bigger play at the moment by some news outlets.

Such anomalies don’t usually endure for long, of course. But it was nonetheless clear that, to get some respect, Hezbollah may need to re-word its statement so that at least the oil traders – geopolitical world’s mine canary – get the message. Here is the story, as reported by news24.com:

Targets Worldwide

“Iran's Hezbollah, which claims links to the Lebanese group of the same name, said on Tuesday it stood ready to attack Israeli and U.S. interests worldwide. ‘We have 2000 volunteers who have registered since last year,’ said Iranian Hezbollah's spokesperson Mojtaba Bigdeli, speaking by telephone from the central seminary city of Qom.

‘They have been trained and they can become fully armed. We are ready to dispatch them to every corner of the world to jeopardise Israel and America's interests. We are only waiting. If America wants to ignite World War Three ... we welcome it,’ he said.”

 Much Lower

Welcome to Wall Street, Mr. Bigdeli. (“Bigdeli”? What kind of name is that, anyway?) Looking for attention, the guy might as well have fired a water pistol at the lens of a CNN camera. Anyway, the Dow Industrials finished up nearly 52 points on the day, running the ol’ spear up shorts’ butts while a deceptive state of calm prevailed in the Middle East. Crude oil did its bit to sustain the illusion, falling $1.65 beneath Monday’s lows.

Maybe investors have it right, and we’ve seen the worst of the war already. But in case you hadn’t noticed, Da Boyz are not exactly giving away put options. Puts are in fact relatively pricey, especially on stocks like Apple, Dell, Beazer, Citi and two hundred others whose horrific declines appear to have been temporarily arrested. It may be a great opportunity for smart money to unload shares on the mindless multitudes, widows, orphans and pensioners, but we are not buying into the con-game. Stocks are going MUCH lower, and soon.  

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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 

-- Posted Wednesday, 19 July 2006 | Digg This Article