-- Posted Wednesday, 18 June 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Wednesday, June 18, 2008
“Phenomenally accurate forecasts”
Because stocks seem unable to sustain a trend for more than about three hours, we should expect to see them moving reflexively higher when trading resumes on the NYSE this morning. After all, weren’t they were falling at Monday’s close? As the new week began, we’d set a low bar for bulls with the following E-Mini S&Ps analysis disseminated over the weekend: “Basis the June contract, it would take a pop today above 1371.50 to suggest there is any buying power stirring beneath the surface.” Alas, DaBoyz were able to manipulate the futures no higher than 1370.25 in pre-dawn trading on Monday – not quite enough to trigger off a short squeeze at the opening. This set the tone for the remainder of the day, with the tired and the timid prevailing as they are wont to do on many a summer’s day.
We asserted here a while back that such tedium would be the last thing to expect this summer, given that the U.S. economy is no condition to tread water for the next three months. We see no reason to change the forecast, since nothing we can imagine is likely to reverse the asphyxiating deflationary trend that has gripped the housing market, as well as the consumer economy. Nor will the tax rebate-induced uptick in sales reported by Wal-Mart long sustain the blather of those CNBC shills who insist the economy has bottomed.
Mall Decimated
The reality is that $4 gas will put a tight lid on growth, causing retail closures to accelerate over the summer months. We see this at the local mall, where vendors have been throwing in the towel faster than the mall’s operator can paper over darkened display windows. Sharper Image, Harry & David’s, Starbucks, Cold Stone Ice Cream and Appliance World are among the latest to pack it in, making it increasingly difficult to imagine which vendors will be able to survive a deep and prolonged downturn – other than, perhaps, purveyors of women’s shoes, apparel and accessories, all of which, one would surmise, are bomb-proof.
Independent retailers have practically become extinct, but now the big chains are killing each other off. Comp USA is dead, Circuit City is next, and only Best Buy will be left. Will there be just one dominant operator left standing in each of a dozen other business categories if the downtrend that has been ravaging airlines and chain-store purveyors of food, menswear, furniture, appliances, jewelry, sporting goods et al. continues?
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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, 18 June 2008 | Digg This Article | Source: GoldSeek.com
