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-- Posted Thursday, 10 July 2008 | Digg This Article | Source: GoldSeek.com

Rick’s Picks

Thursday, July 10, 2008

“Phenomenally accurate forecasts” 

Bulls and bears went another bloody round yesterday, setting the stage for a rubber match  when the opening bell sounds. Since the beginning of July, gratuitous swings have averaged about 250 points -- all of it for naught, since the dominant, bearish trend has made almost no headway. Will this be the day stocks finally break down? If so, it would probably come as a relief even to bulls, since they’ve been getting suckered by rallies as much as bears have been by declines. A referee might have declared a draw if it were a wrestling match, but we’ll just have to wait for a clear winner to emerge.  But what remains of our precious sanity would be a casualty if bulls prevail, since there is nothing in the economic environment that would explain a big rally from these levels.

Short-covering could conceivably do the job, but it seems to have dried up . Crude oil’s histrionics appear to have lost their power over the bearish imagination, at least for the moment, and although we could see the stock market plummeting if oil bulls get second wind, we don’t expect stocks to get much lift from any further weakness in crude -- unless it catalyzes a price drop of at least $20 to $30. Meanwhile, the bearish target we’ve been using for the E-Mini S&P is still valid. If it’s achieved, the implied fall in the Dow Industrials from these levels would be about 250 points.  That’s as far out on the limb as we’re willing to go with a prediction right now, but you should take the odds if someone lays you 5-to-3 that the next day will be down.

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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, 10 July 2008 | Digg This Article | Source: GoldSeek.com

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