-- Posted Thursday, 12 June 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Thursday, June 12, 2008
“Phenomenally accurate forecasts”
We held bullish positions yesterday morning in Citigroup and the E-mini S&Ps but side-stepped trouble by paying heed to the following Citi Tout sent out the night before: “Thrilled though we are about having caught a contrarian breeze via our purchase of July 17.50 calls, we should have no illusions that a bunch of shaky financial stocks are going to hold this market up for much longer. The broad averages are acting like they want to go down, and they are about to pull down the bank stocks, fleetingly in the grip of delusion, with them. Let's try to hedge our bet by offering two July 20 calls short for 1.65 against the calls we already hold for 2.65. Keep your bulletin launcher on, though, since conditions after the opening may warrant a change in our strategy.”
Although we missed shorting the July 20 calls against our long position, we still managed to book a profit by exiting the position entirely before the fleeting, good times in Citi came to an end.
Similarly, we dodged the bullet in the E-Mini S&P after getting long early in the session via the following advice: “We're using a Hidden Pivot support at 1340.50 as our minimum downside objective, and you can bottom-fish there with an initial stop-loss at 1338.75. If the order fills and goes profitable I'll post further guidance in the chat room and under Intraday Notes.”
As you can see in the chart above, a 1340.50 bid would have done very nicely yesterday, since it came within two ticks of nailing the opening low and held for more than two hours as the futures bounced eight points. In retrospect, initial risk (theoretical) of $87 could have returned a profit of as much as $400. Fortunately, we did not stick around, since the broad averages did indeed fall lower without the anomalous – make that, bizarre -- support of the bank stocks.
Looking ahead, our gut feeling is that the stock market is verging on a spectacular collapse, mainly because the veneer of the supposed bank bailout is starting to warp, crack and peel. In practice, though, we won’t wager the ranch on a Mother of All Tops because no one has made money on that bet in nearly seventy years.
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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 Thursday, 12 June 2008 | Digg This Article | Source: GoldSeek.com
