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-- Posted Wednesday, 9 July 2008 | Digg This Article | Source: GoldSeek.com
Rick’s Picks Wednesday, July 9, 2008 “Phenomenally accurate forecasts” We were looking for a collapse in oil prices to trigger off a big rally on Wall Street, but that’s not what happened yesterday, not exactly. It was more like a delayed reaction, and a muted one at that. When traders arrived at the New York Stock Exchange, crude was already off $4 a barrel, on its way to a $5.33 loss -- the biggest single-day drop in 17 years. How did the Street respond to this economically exhilarating piece of news? Well, buyers and sellers alike dithered for the next four hours, sending the broad averages up, then down, then up again, and then down. It wasn’t until the trading session was nearly two-thirds over that stocks finally took off, sort of. The Dow settled up 152 points on the day, a relatively modest gain, considering investors have been absolutely obsessed with crude oil’s every uptick in recent months.
Perhaps too many traders had anticipated that crude eventually would crack, and now that it quite possibly has, they’re selling the news? Or maybe everyone is worried that quotes are going to come roaring back? Whatever the case, we’re not planning on shorting into any rally the spills over into Wednesday’s opening hour. That’s notwithstanding the fact that we’d all but guaranteed a few days ago that the E-Mini S&Ps were headed for a 50-point plunge (equivalent to around 400 points in the Dow). The futures were two-thirds of the way there at yesterday’s lows, and the bearish target will remain valid unless the S&Ps gain 20 points today. But it would take quite a bit more than that – a 64-pointer, to be precise, or 5% -- to turn the daily chart sufficiently bullish to mitigate our skepticism for even a little while.
*** 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, 9 July 2008 | Digg This Article | Source: GoldSeek.com
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