-- Posted Wednesday, 8 October 2008 | Digg This Article
| Source: GoldSeek.com
At yesterday’s pace, we could have this whole bear market over with by election day. Even Bob Prechter’s famously dire forecast that the Dow Industrials eventually will trade under a thousand – a prediction with which we unfortunately agree – would be satisfied. But what would permabears have to talk about then? Stocks would have nowhere to go but up, and what fun would that be?
Actually, bear market bottoms do not necessarily spell better times ahead. Just look at the chart above, of dot com-era high-flier JDS Uniphase. The stock hit a high of $1,227 per share right around the time Abby Cohen, Henry Blodgett and other Wall Street pimps and whores were doubtless predicting it would go to $2,000. The stock in fact fell like a brick, mustering one final, pernicious bear rally in the summer of 2000. The spectacularly false surge would have given CNBC shills the opportunity to fall in love with JDSU all over again. And so, probably, would have we. From a Hidden Pivot perspective, you have to look very closely at the weekly chart to discern that the bear surge did not take out the two external peaks that we require to signal a true bull move.
Note to Apple [AAPL] Shareholders
That simple technical trick has kept us on the right side of the market in recent weeks, since it allows us to ignore the noise generated by any rally that fails the two-peaks rule. By that measure, even the 600-pointer that began from Monday’s low was just another short-squeeze hoax, since the Industrial average did not exceed even one prior peak on the hourly chart, much less the two we require.
Speaking of Hidden Pivots, here’s a forecast to keep in mind if you’ve wondering when Apple (AAPL) shares will stop falling: 71.53. We’re not guaranteeing that the target will prove to be the stock’s bear market low. However, we are quite confident that AAPL, currently trading around 90, will fall to that price, at least, and that it will take a very tradable bounce from within less than 20 cents of it. By all means, remind us of this prediction six months from now, and tar-and-feather us if we were wrong.
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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, 8 October 2008 | Digg This Article | Source: GoldSeek.com
