-- Posted Friday, 7 November 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Friday, November 7, 2008
“Phenomenally accurate forecasts”
For day traders, leveraging the stock market’s breathtaking volatility of late has probably seemed like skiing the steeps at Crested Butte: one mistake and you’re dead, or wishing you were dead. Who could have predicted the Dow Industrials would one day gyrate so wildly that even 2,000-point swings would not be technically significant? You can see why in the chart below. From a Hidden Pivot perspective, the Indoos would have to rally above peak #1, or fall beneath low #2, to suggest that something serious is happening. Anything less, including the back-to-back 500-point declines we have just witnessed, is just noise.
Investors can only pray that a whole slew of thousand-point selloffs don’t bunch up in the same quarter, since at that rate it would take just two months to bring the Dow down to Bob Prechter’s famous bear market target at 400. We think Prechter will eventually be right, but it could take years if the stock market’s rabid ups and downs continue to more or less cancel each other out. To be sure, bulls have been getting the worst of it for a year. But they should consider themselves blessed over the last month or so, since the broad averages have been marking time even as the economy slipped deeper into an abyss that in some ways is worse than the Great Depression.
The Pinnacle of Affluence
But worse for denial? It’s hard to know, since the evidence suggests that even in 1932, many Americans didn’t realize they were living through times so tough that they would come to be known as the Great Depression. The Okies knew, though, and so did those who lined up for soup. But this time around, the economy may have to fall quite a bit farther before Americans understand what has been lost. That’s because the trappings of middle class affluence at its very pinnacle will be all around us no matter how swift our fall. A few years from now there will still be a glut of golf courses and marinas, of five-star hotel rooms, of Winnebagos, and $6,000 mountain bikes. At what point does a Lehman Brothers partner who pulled down $15 million last year with bonuses go on the dole?
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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, 7 November 2008 | Digg This Article | Source: GoldSeek.com
