|
-- Posted Monday, 30 March 2009 | Digg This Article | Source: GoldSeek.com
Last week’s tedium seems to have gotten the speculative juices flowing in the Rick’s Picks chat room. Stocks, bonds and gold did practically nothing all week, a condition that invariably causes market-watchers to expect something to happen the next. That’s how Bollinger Bands work: Stretches of boredom in the markets cause the upper and lower bands to constrict to an isthmus, supposedly foretelling the next explosive price movement. From a Hidden Pivot perspective we see trendlessness somewhat differently, in the form of “dueling” impulse legs that are characterized by minor rallies on the lesser charts matched by minor declines of equal magnitude. In other words, tit-for-tat. But whereas Bollinger Bands effectively store up tension between bulls and bears, dueling impulse legs alleviate it. From an analytical perspective, we like to think the Hidden Pivot System allows us to predict boring stretches more comfortably than most other technical methods. 
Not that we’re actually expecting more of the same right now. We’ve already projected a minimum 848.25 for the June E-Mini S&P, implying that a Dow rally of as much as 300 points is imminent. Although we expect that threshold to be reached by no later than mid-week, it is what occurs immediately afterward that can tell us whether more tedium awaits; or perhaps a new rush of ebullience; or even a fatal stall. For if the target were to be exceeded by more than a couple of points shortly after first being touched, we would infer that Spring fever is likely to persist for yet more days or even weeks. And if the shares of one stock in particular, Goldman Sachs, were to lead the charge, we’ll be urging bears to go with the flow, since the stock, currently trading around $108, could be headed as high as $129. We’re predicting that GS eventually will fall to $29 or lower, but because the stock seems in no hurry to get there, we’ve positioned ourselves in the meantime to profit from this rally via option calendar spreads centered on the 115 strike. Gold’s Wild Card
Regarding gold, it has held up quite well so far despite a full-court press of happy talk from the Obama Administration and an absence of thoughtful scrutiny by the news media to rebut it. A wild card that could cause bullion to soar is the prospect of the dollar being unseated as the world’s reserve currency. This is being discussed as though the outcome were somehow speculative, and the Treasury Secretary remains in denial. However, we see the dollar’s fall from grace as inevitable, imposed on the U.S. by a world no longer willing to sustain an economy that consumes much, saves little and which has hocked its future till kingdom come. These are interesting times, for sure, and tedious markets may be as much relief as we’ll get for years to come.
***
Rick's Picks publishes a daily trading newsletter for gold, stock, commodity, and mini-index traders 240 times per year. 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 © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Monday, 30 March 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Rick Ackerman
|
