-- Posted Wednesday, 14 February 2007 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Wednesday, February 14, 2007
“Phenomenally accurate forecasts”
Some analyst at Merrill got excited yesterday about GM’s dubious plan to revive SUV giveaways, and, lo, the Dow Industrial Average takes a hundred-point leap. But as the Nasdaq chart below makes clear, even speculators who bought yesterday’s rally didn’t have their hearts in it. More like their cojones, which got caught in the ringer when Da Boyz decided to short-squeeze a stock market that had grown quite oversold. With the (economically insignificant) news kicker that Alcoa might be a takeover target, the point-shavers lost no time leveraging bland news into a buying spree in the opening minutes of the session. The Dow Industrials were up 60 points before anyone could blink, and it appeared doubtful by day’s end that shorts had been able to cover much.
Perhaps they’ll get another chance today, since, as mentioned above, there were clear signs that the rally lacked heart. Notice in the chart how the day’s high fell a penny shy of the previous day’s visually arresting peak at 44.01. According to the "look-to-the-left" rule that I teach at the Hidden Pivot seminar, any rally leg worthy of our respect and attention will, with its final gasp and just for good measure, take out one last peak to the left of it. By that reckoning, yesterday morning's short-squeeze was a dismal failure -- a distribution ploy that we would be wise to watch from the sidelines.
Even so, phony rallies like yesterday’s have a way of turning into the real thing if shorts find themselves seriously on the ropes. We should therefore be on our guard this morning for signs of another nasty squeeze, albeit one that does not begin with a gap-up leap like yesterday’s. A soft opening that appears to slowly gain momentum in the first 20-25 minutes would fit the bill, since it would allow the arse bandits to suck up whatever stock has come in for sale overnight before they goose the prayerful and the unwary.
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Boca Raton Seminar
I’ve received numerous requests to offer a Hidden Pivot seminar in Boca Raton, Florida, among other places, and will do so if there is sufficient interest. Please let me know if you would be seriously interested in attending the class. The two-day session would be held sometime in the Spring of 2007. To get on my mailing list, drop me an e-mail, including your contact information. The cost would be $1,500 USD.
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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, 14 February 2007 | Digg This Article | Source: GoldSeek.com
