-- Posted Friday, 11 January 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Friday, January 11, 2008
“Phenomenally accurate forecasts”
In the chart below, it’s plain to see that DaBoyz lacked the guts yesterday to promote an all-out short squeeze. The S&Ps may have rallied 40 points from their intraday lows, but look at how the top of the rally failed to take out any meaningful highs to the left of it. In Hidden Pivot terms, there is no bullish impulse leg here to get excited about, only little stuff that would be useful merely for scalping.
And yet, there was ample evidence that those who earn their living mainly by manipulating stocks, the better to steal from widows and pensioners, had every intention of building on yesterday’s momentum, which could only have come about as a result of delusional thinking and short-covering. To turbocharge the effect, there was a terrific little dog-and-pony show that had BofA buying Countrywide. This deal is obviously being pushed hard behind-the-scenes by the Fed, and it makes sense, since rumors that the latter firm is seriously on the ropes needed to be squelched as quickly as possible.
What better way to accomplish this than to promote as Countrywide’s suitor the bank that has been mentioned least in connection with “the subprime mess”? We think BofA eventually will go down in flames like all the other financial biggies, but we’d have to concede that it is likely to outlive Citi and a few others that might just as easily have been volunteered by the Fed to drink deeply from Countrywide’s poisonous well. We’d surmised as much from promotional mailings received over the years from the money centers. BofA has always seemed less aggressive than most -- surely less aggressive than Citi -- in promoting revolving loans in particular. Perhaps that’s why BofA shares have fallen “only” 30% from their highs while Citigroup’s have shed fully half of their value.
In spinning the deal as Good for America, CNBC jumped right into the swing of things, hyping it as the greatest idea since sliced bread, a match made in heaven. Of course, the infotainment network’s best and brightest spewed the same bilge when TimeWarner and AOL merged. But it would be churlish of us to recall their detailed logic – especially on a day when the only competing story involved glum statistical evidence that 2008’s Christmas shopping season was an outright bust. Countrywide’s apparent bailout may not do much to lift retail sales, but when Wall Street’s arse bandits get done using this news in their canny way, the dollar result will probably more than offset, if but fleetingly, America’s recent losses at the cash register.
Buy ‘Em, Fool
Indeed, with Countrywide’s huge problems temporarily solved, at least illusorily, DaBoyz are not going to pass up the opportunity to squeeze shorts for at least another day or two. Even the pinheads and jittery bears who have been buying stocks lately cannot be expected to remain delusional for much longer than that. So DaBoyz are going to have to milk every last ounce of foolish buying that they can from this momentary lapse in sanity. They will be looking to squeeze stocks higher in order to get short at prices that will help cushion them against loss during the next, inevitable avalanche. That is why DaBoyz allowed stocks to fall a third off their highs yesterday. The idea was to bring shares down to levels where they could be accumulated without much immediate risk, but not down so far as to shatter the delicate illusion that perhaps this Countrywide deal will keep the U.S. economy from collapsing.
If you actually believe that, then we would strongly encourage you to buy ‘em hand over fist when the markets open this morning, the better to eliminate yourself quickly from the financial gene pool.
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Here’s a $50 Coupon…
A flurry of late registrations brought last weekend’s Hidden Pivot seminar to near-capacity, so I have scheduled another class in February for those who missed it. Click here for a $50 discount and instructions for registering. The class will be held on the weekend of February 9-10, from 9:00 a.m. to 12:30 p.m. Mountain Time. If you want to learn how to forecast stocks and commodities as confidently and precisely as top pros, this is an opportunity you should not pass up.
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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 © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Friday, 11 January 2008 | Digg This Article | Source: GoldSeek.com
