-- Posted Wednesday, 16 August 2006 | Digg This Article
| Source: GoldSeek.com
Rick's Picks
Wednesday, August 16, 2006
For investors who'd rather be smart than lucky
My technically savvy friend Garrett Jones thinks a pullback in gold later this month could provide the last good buying opportunity in quite a while. He also sees a potentially important turning point for stocks if they continue to rise into the beginning of September. That would coincide with the end of a four-year cycle that we usually associate with important lows. This time, however, it may be different. Here's Garrett to explain why:
"[In these extremely troubled times], a major problem is the absence globally of great leaders. Could the markets be in for a rough ride because of this? Quite possibly. My next major turning point for the stock market is at the end of this month. The last two such turning points – both meaningful tops -- occurred in the first week of March, 2005, and most recently on May 10. For perspective, check out the chart below, which shows my long-term indicators.
The crossover buy/sell signals are quite impressive. Will this be a quickie like in 1998? I can't say for sure, but when the lines cross, odds of a major move are very high. When I refer to my long-term work, I am alluding not to the chart above, but to trendlines, channel lines, cycles and a few other factors that warrant constant scrutiny. When they converge at a single point, or closely coincide, history tells us that it is potentially very significant. In March of 2005, such a convergence foretold a major top to the day – and did so again in May of this year.
At the risk of spoiling the predictive effect by talking about it, the picture is simply too compelling to ignore. What I notice is that the long-term chart may be setting up for a crossover. I also notice that a four-year low is due very soon. What does this imply? Look at the run-up from 1994 to 1998. Now look at the run-up from 2002 to the present. To me, it shows similar price action over a similar time frame, both conveniently occurring within a neat, four-year cycle. Does this guarantee anything? Of course not. But it's no stretch to suggest that it could be setting up for a sharp decline. Early in the year, my long-term work confirmed the May 10 turning date and another in late August. We now know that May 10 was a top. Could late August be a bottom? Perhaps, particularly if stocks sell off from now until then. However, if they rally into that time period, it could set up a big move to the downside.
Generally, the late August/early September period is bullish. If seasonality holds, September 5 would be my latest date for the market to conclude a rally. We shall see. Meanwhile, I fully realize that calling major market turns is hazardous and that those who attempt it are looking to get shot down. We should also realize that market crashes don't come from highs, but from secondary peaks when lower lows have begun to form. In my view, if something like this is in the cards, it would appear most likely to occur in September. I may have had one cup of Joe too many this morning, but I have been going over my charts and wanted to share this information with you. Any feedback would be welcome.
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Seminar Set at Fort Mason
You'll want to mark November 11-12 on your calendar as the date of the San Francisco Hidden Pivot Seminar. The two-day class will be held at Fort Mason over that weekend, so if you're interested and haven't contacted me yet, please let me know via-email as soon as possible. Fort Mason has great views of the bay, a giant parking lot, and is well serviced by the Municipal Transit System – an ideal location for the event.
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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 i ssues 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 expre ss written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Wednesday, 16 August 2006 | Digg This Article | Source: GoldSeek.com
