-- Posted Wednesday, 13 September 2006 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Wednesday, September 13, 2006
For investors who’d rather be smart than lucky
Judging from the way stocks have been getting short-squeezed this week, traders must have been loaded to the gills with September put options. My technically savvy friend Tom Tankka pointed this out to me, along with the sad observation that our mutual friends from the trading world have been dropping like flies, so very challenging is the current investment environment. It is at times like this that I prefer to tune out what everyone “thinks” and simply look at the charts. And so I have, enabling me to identify a very promising rally target for the Dow Industrials that can help take some of the guesswork and pain out of the game.
Moreover, in yesterday’s Touts I proffered a downside target for Newmont Mining that has the potential to yield the first low-risk buying opportunity in the stock since May of 2005. It was complemented in yesterday’s chat room by a projection for December Gold that is not apt to please the hard-money crowd but which most surely has their best interests at heart. I never promised I would break it to you gently, and although I remain a long-term bull on gold, I will never, ever become a cheerleader for the stuff unless the technical evidence demands it.
Concerning Wall Street’s ongoing dog-and-pony show, getting a handle on things is not rocket science, not as long as one does not open the door even a crack to intuition or knowledge. Both appear useless at the moment, since the stock market is obviously too pumped up on global funny money to respond in a predictable way to negative economic stimuli, even such stimuli as hits like an electrical jolt to the testicles. Does the stock market know there’s a spectacular housing bust gathering momentum – one that could conceivably usher in a Second Great Depression? You would never guess that’s so watching stocks rise steadily yesterday, feeding on bear carcass the whole way up.
Syrian Dud
The short-squeeze was catalyzed by exactly the kind of news that has triggered a dozen such rallies in the recent past: Traders awakened to news of an attack by “militants” on the U.S. embassy in Damascus. Word of the attach evidently was sufficient to roil Asian and European markets overnight. But as we’ve seen so many times before – in Iraq, in Lebanon, in Afghanistan, in Spain, in London, and in New York – as soon as it dawned on investors that the world had not come to an end, there was only one possible response: “Buy ‘em!”
Such is the simple-minded calculus of a stock market that long ago ceased to attract the interest of investors and which has since yielded itself up to the whimsical flailing and lurching of an algorithmic Frankenstein. Stocks are in the hands of “players” now, there to remain until some hideous, wholly unpredictable event so completely re-shapes our vision of the future that even the Street’s Masters of the Universe will start their day retching into a toilet.
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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, 13 September 2006 | Digg This Article | Source: GoldSeek.com
