-- Posted Wednesday, 27 February 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Wednesday, February 27, 2008
“Phenomenally accurate forecasts”
The Dow has tacked on 400 points since Friday, but could there be even more silliness ahead? The chart below, posted to the chat room yesterday morning, says yes, quite possibly – as much as 500 points over the next couple of weeks. That would be pretty amazing, considering the economy is falling apart, joblessness is about to explode, home prices are dropping faster than at any time since the 1930s, corporate profits are diving, and there is once again talk of $4 gas in places other than California. Weigh all those negatives against IBM’s $15 billion buyback announcement yesterday, however, and the result was a relatively modest short-squeeze, albeit one sufficient to extend the Dow’s winning streak and put it into positive territory for February. At yesterday’s settlement price the blue chip average was up 0.3% for the month, although it is still showing a 4.4% loss for 2008.
Concerning the news from IBM, perhaps it would be churlish of us to point out that supposedly strong companies should be investing their spare cash in capital equipment, research and development rather than in their own stock? But if this quaint notion from the Graham and Dodd playbook has been lost to posterity, it didn’t do shares any harm. But the question now is, are there enough complacent bears out there to keep the short-squeeze going for at least a few more days? We think the answer is yes, for technical reasons shown in the chart.
But this presumably fleeting bullish picture comes with some caveats, including the fact that late January’s impulsive rally failed to exceed the peak at 12794 that had been recorded a week earlier. That’s enough to make us want to hedge our bets, but the bullish argument is that it would take only a relatively modest, 110-point rally today and/or tomorrow to surpass both 12794 and the ‘B’ peak at 12768. Followers of the Hidden Pivot Method will know that that would create a fairly powerful impulse leg. We’ll be watching to see whether this occurs. If it does, and even if nothing could persuade us that the buyers are sane, we’re prepared to join in the revelry for as long as it lasts.
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Only Four Seats Left
The 12 seats I’d allotted for the March 8-9 Hidden Pivot seminar are two-thirds gone. If you’d like to attend this online event, click here for further details and instructions on how to register. The class will be held on Saturday/Sunday 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 Wednesday, 27 February 2008 | Digg This Article | Source: GoldSeek.com
