-- Posted Wednesday, 10 December 2008 | Digg This Article | Source: GoldSeek.com

Rick’s Picks

Wednesday, December 10, 2008

“Phenomenally accurate forecasts

Stocks turned weak yesterday, but it looks like a buying opportunity rather than the beginning of a new trend. Notice in the chart below how the rally begun off Friday’s low has surpassed two prior peaks. That meets our minimum requirement for creating a bullish impulse leg – one of daily-chart degree in this instance -- and it is what makes us very confident that yet another rally leg awaits once the consolidation beneath Monday’s high is complete.

However, despite this bullish picture for the near-term, all is not rosy. In fact, we expect the bear market to resume with a vengeance as early as next week, after the current, benighted outbreak of irrational exuberance has run its course. This prediction also comes directly from the way the A-B impulse leg  has formed. While it has indeed managed to get past two prior peaks before correcting, if buyers had any real guts, they’d have pushed past the third peak before taking a rest. How do we “know” this? Very simply, from having watched impulse legs form on tens of thousands of charts over the last decade-and-a-half. We’re open to changing our mind here, but not until we see the kind of bullish thrust that blows past a few daunting peaks without getting so easily winded, as this one has. That could happen today with a push exceeding peak #3 (i.e., 9159), since yesterday’s pullback fell a few points shy of terminating the A-B impulse leg. But until such time as that happens, the burden of proof will continue to rest with the bulls.

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

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