-- Posted Thursday, 9 August 2007 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Thursday, August 9, 2007
“Phenomenally accurate forecasts”
Back from a week’s vacation in the tropics and freshly infused with sunbaked sanity, we view the stock market’s bizarre spasms in recent days as the death rattle of speculators gone criminally berserk with Other People’s Money. For how else to reckon the wild price swings of late?
On Tuesday, a short squeeze late in the session turned a deathly glum day on the NYSE into one of the most powerful bull rampages of the year, transforming a 120-point loss in the DJIA into a 286-point gain. Yesterday it was the opposite, but with an extra frillip of inspired nuttiness in the final minutes. The Indoos were up nearly 200 points when NYSE traders returned from lunch, but Da Boyz sent shares into a kamikaze dive that wiped out the entire gain and then some in less than an hour.
Bush as Greenspan
But wait, there’s more: With just a half-hour of trading to go, stocks lurched higher yet again, finishing with a 154-point gain. The pundits attributed all of it to a briefing President Bush was conducting for reporters at the Treasury Department. They may be right for once; for, by saying absolutely nothing, Dubya sounded positively Greenspan-esque when he attributed Wall Street’s freakish volatility to a “readjust[ment of] its assessment of risk.”
Let’s hope the San Andreas Fault does not suffer a similar readjustment any time soon, since, unlike the denizens of Wall Street, Californians do not possess the apparent coping mechanism of mental illness that appears to suit portfolio managers and their soon-to-be victims so well.
Just Missed the Top
For our part, we can’t say we were the least bit surprised by yesterday’s histrionics. In fact, a trading recommendation in the Touts section of Wednesday’s Rick’s Picks came within two ticks of nailing ther exact high in the S&P futures (see chart above), before they went into a 27-point dive. Here is the recommendation exactly as it went out Tuesday night: “Any significant progress above yesterday's 1495 peak would portend a minimum 1511.00. That's a Hidden Pivot resistance you could short with a stop-loss as tight as 1512.25. Switch to a 1.50-point trailing stop on a pullback that touches 1506.50, and use 1502.00 as a minimum objective.”
The trade was worth as much as $1,300 per contract to anyone who caught the entire move. Not too shabby, considering the initial risk was just $65 theoretical. Officially, we followed the instructions to-the-letter and missed the move. Our short offer at 1511.00 was left choking on dust when the futures topped at exactly 1510.50 before switching on the retro-rockets.
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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 Thursday, 9 August 2007 | Digg This Article | Source: GoldSeek.com
