-- Posted Friday, 14 November 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Friday, November 14, 2008
“Phenomenally accurate forecasts
Returning to our desk yesterday after a luncheon meeting in Denver, we dropped in on the Rick’s Picks chat room after-hours to find out what had caused the Dow to trampoline more than 900 points from its intraday low. Alas, the chat room denizens seemed as clueless as we were. We guess it was just one of those things. Not that anyone should have been surprised. Mr. Market has a well-known penchant for making certain that bears do get rich the easy way, betting on so sure a thing as that stock prices will go down, down, down ahead of an unprecedented collapse in U.S. corporate earnings.
Lately, the surest thing we could foresee was that the shares of Citigroup, trading above $12 as recently as Monday, were bound lower, to at least $7.75. Accordingly, we put out the following recommendation to subscribers Wednesday night, with the stock trading around 9.64: “Citi is all but guaranteed to hit 7.75 (or 7.09 if any lower), and soon, but as we have learned over and over again in this stock, that doesn't necessarily mean we can make money shorting it. I have no specific strategy to suggest for the opening, since opening-rotation prices rarely favor the retail customer. However, if Citi begins the day with a moderate rally, you might want to have a stink bid in for some December 12.50 puts (CXZ).”
As if on cue, Citi gapped 25 cents higher on the opening, presumably on a small excess of buy orders over sell orders. We can only hope that alert subscribers were able to pick a few December 12.50 puts at the bell, since they shot up by 46% before collapsing again as Citi reversed direction and rallied 15% to finish the day at 9.54. We see Citi and the Industrial Average eventually falling much lower, and that’s as close to a sure thing as any bet we could recommend. But on any given day, betting on such a sure thing could prove lethal, as yesterday’s psychotic whipsaw demonstrated.
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December Hidden Pivot Seminar
Because the November 5-6 Hidden Pivot Seminar was full, we will be offering the class again on December 3-4 for $1150. The fee includes entry to weekly tutorial sessions for an entire year. For more information, click here.
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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, 14 November 2008 | Digg This Article | Source: GoldSeek.com
