-- Posted Friday, 27 June 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Friday, June 27, 2008
“Phenomenally accurate forecasts”
We put out some bearish targets a while back, not expecting them to be reached so quickly. Now what? Our original advice called for bottom-fishing in the E-Mini S&Ps, Citigroup and the QQQQs, but we are seldom eager to attempt this when price targets are reached in the final minutes of the day, as occurred yesterday in two of the three vehicles. At the bell, stocks looked like they wanted to keep falling, but this must be weighted against the fact that index futures were actually wafting higher in after-hours trading. Granted, the buying wasn’t very strong, and by early evening the futures had eked out only a 2.50-point gain from their intraday lows. But any such buying, no matter how feeble, should serve to remind us that profit-taking by shorts will tend to interrupt even the most devastating selling panics.
Will yesterday’s near-panic continue into week’s end? We may have an answer early in Friday’s session, since the E-Mini S&Ps were approaching a Hidden Pivot support that looked well capable of generating a tradable bounce. (See Tuesday’s Touts for a detailed trading strategy.) If sellers turn the support into pulp, though, it would be warning buyers to move to the sidelines. The S&Ps have been very predictable lately, even if they’ve taken their sweet old time getting to their targets. We’d touted a bearish price objective at 1291.25 a while back when the futures were trading about 40 points higher. Because that was a fairly important Hidden Pivot support, we’d expected it to provide more support yesterday than it did. The seven-point bounce that occurred precisely from that number was the best of the day, but when the pivot gave way a little more than an hour later, it was signaling more, and probably considerable, weakness ahead.
Fantasyland
The myriad reasons for yesterday’s selloff are so obvious that no one could have been surprised by it. What does surprise, however, is that even after the prolonged slide begun last October, the Dow is still within 20 percent of all-time highs. This is particularly baffling, given that residential real estate values, the backbone of America’s credit-based economy, are falling more steeply now than during the 1930s. Add to that the imminent failure of more large banks and the almost certain bankruptcy of some of the country’s biggest manufacturing concerns, and you might get the impression investors are still living in fantasyland.
With the economy looking more precarious, even, than in 1929, the last thing in the world we might expect is for the Fed to start raising interest rates. But perhaps our colleague Steve Saville has a point when he suggests that the Fed seize the problem by the scrotum (our metaphor, not his) with a shock-and-awe tightening of 50 basis points. That would surely pop the bubble in crude oil and other commodities, which in turn could help mitigate the trade deficit and some inflationary pressures by pushing up the dollar. That would hardly begin to solve America’s financial problems, but at this point it is not necessarily certain, in the final reckoning, to make them worse.
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Last Chance to Take Seminar
Because of family vacation plans, I will be able to offer the Hidden Pivot Seminar only once this summer – on two consecutive weekday evenings, July 23 and 24. If you’ve been thinking about signing up, now is the time to do it, since once this class is full there will not be another opportunity to take it until fall. Click here, and then on the “Upcoming” tab to register; or here if you would like more information as well as a detailed description of the Hidden Pivot Method and a free Hidden Pivot calculator (our latest model, perfect for beginners).
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Saving America
We don’t have any easy answers, but we’re hoping to hear from readers with ideas about how to return the U.S. economy to health. The person who submits the best essay on the topic What Will Save America will receive not only a scholarship to the Hidden Pivot seminar, but also unlimited access to post-graduate tutorial sessions held each week during market hours. The value of this package is $1,150, and a week into the competition we’ve received no fewer than 21 submissions, including one that argues that Americans need, more than anything else, to get serious about diet and exercise.
Essays should be 750 words or less and must be received at this e-mail address by no later than July 15. For details about the Hidden Pivot seminar and comments from those who have taken it, click here.
Our own idea about how to save America is to become a global leader in energy. A solution that works for the whole world would be a triumph for Yankee know-how on a par with the invention of the automobile assembly line. To stimulate thought on this topic and others, we will be presenting occasional guest commentaries by people with backgrounds in science and engineering. Economists need not apply. In the meantime, we welcome any contributions at the e-mail address linked above. We’ll print the best of them once the competition has concluded next month.
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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, 27 June 2008 | Digg This Article | Source: GoldSeek.com
