-- Posted Sunday, 29 July 2007 | Digg This Article | Source: GoldSeek.com

Rick’s Picks

“Phenomenally accurate forecasts” 

If a plummeting stock market is going to be rescued from free-fall by short-covering, it had better happen soon.  Just look at the graph below. The Dow Industrials settled Friday on the low tick of the day, and it would take only another 56 more points of selling to create a menacing impulse leg on the daily chart.  Something to worry about, for sure. It could also send the Indoos groping for  support down to as low as 12720, an important Fibonacci-based number that implies a 545-point drop from these levels.

So, will panicky bears come to the rescue?  Usually, it takes some kind of good news to send shorts scrambling for cover. But what?  We are living in such very interesting times that the prospect of truly uplifting headlines seems almost beyond imagining.  What are the chances that Iran will renounce its “peaceful” nuclear program over the weekend?  Or that Sunnis, Shiites and Kurds, citing Rodney King as their inspiration, will sit down together and decide that it’s time, finally, to “get along”?  Or, suppose the Saudis were to announce a massive diversion of funds from madrassas and exotic explosives toward humanitarian causes in the Arab world?  The rejuvenating news we hope for could even be some small but symbolically stunning gesture to the world, such as the Taliban lifting the ban on entertainment by staging an all-night Astaire-and-Rogers movie marathon in some Kabul park.

On second thought, to be realistic, maybe we’d better start gearing for that 545-point dive. Our guess is that the Dow will open down 150 points come Monday morning, conceding the early part of the day to shorts. But if that loss has not been recouped by the end of the first hour, look out below. 

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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 © 2007, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Sunday, 29 July 2007 | Digg This Article | Source: GoldSeek.com

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