-- Posted Thursday, 10 August 2006 | Digg This Article | Source: GoldSeek.com

Rick’s Picks

Thursday, August 10, 2006

For investors who’d rather be smart than lucky 

The stock market appeared, finally, to have taken notice yesterday of world events. Or did it? The Dow Industrials fell nearly 100 points, prompted, according to some observers, by news that Israel’s ground war in Lebanon had entered a new and greatly expanded phase. “Startling developments!” was how Fox sold this breaking story. But if the markets were truly rattled by it, then why did crude oil prices – an even more reliable mine-canary than gold when it comes to detecting global jitters – give up their entire gains for the day in less than an hour? And why should investors care about what’s happening in Lebanon at this moment if they haven’t shown any concern about it up till now?

Was it perhaps Nasrallah’s threat to turn Southern Lebanon into a graveyard for Israeli soldiers if Israel steps up the battle? Assuredly not, for the Fully Bearded One has already made far worse threats than that, and so has his fellow jihadist, Ahmadinejad. Clearly there must be another explanation for yesterday’s weakness in shares, and I will go out on a limb to put my finger on it: The decline was caused by…Nothing In Particular. As far as I’m concerned, it represented no more than the completion of a minor bearish impulse leg that began last Friday. If I’m right about this, the Dow should turn from – well, check out the Current Touts section of Rick’s Picks if you really must know and want an exact swing point.

Regular readers of Rick’s Picks will have sensed by now that I have to hold my nose, close my eyes, and resist the intrusion of all logic in order to choke out a bullish forecast. That said, and for the record, I still think that last Friday’s spike in the Indoos created the kind of bullish impulse leg on the daily chart that does not die quietly. Difficult as it is for me to imagine just what might be responsible for pushing stocks higher in the coming weeks, my outlook for the near term remains moderately bullish nonetheless. That could change if the averages start overshooting their minor-cycle supports, including the one I’ve alluded to in the Dow Industrials.

Deep down, I have never been more bearish on stocks than I am now – not even at the depths of the 1973-74 crash. But that is all the more reason why I must follow my technical indicators with as much detachment as I can bring to the task. As far as my technical runes are concerned, it might as well be the dawning of an era of world peace.

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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 Thursday, 10 August 2006 | Digg This Article | Source: GoldSeek.com

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