-- Posted Tuesday, 14 April 2009 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Tuesday, April 14, 2009
“Phenomenally accurate forecasts”
Anyone who wants to know what’s on the stock market’s evil little mind need only monitor the behavior of one stock: Goldman Sachs [NYSE Symbol: GS]. These days, Goldman is the high-beta vessel of whatever madness appears to rule at a given moment. As such, it’s often possible to predict the stock market’s histrionics based on Goldman’s crazed leadership.
Yesterday morning, for instance, we were expecting the stock to shoot up to 131.80 – about $8 above last week’s settlement price – and to drag the stock market along with it. In a trading tout disseminated to subscribers late Sunday night, here’s what we foresaw:
“[Last week’s $10 finishing stroke] was a short-squeeze truly worthy of the name, since it came on news that Goldman Sachs plans to float a zillion new shares while the gettin’s good. We hesitate to predict how high the squeeze will go, especially with index futures evidently under pressure Sunday night. But our hunch is that stocks will get dragged higher by Goldman rather than the other way around. If so, look for the rally to continue to at least 131.80, a good place to try shorting on your terms with a tight stop-loss.”
New Rally Targets
We didn’t get the short off because GS peaked yesterday at 131.27, a tad below our target. However, earlier in the session, when Goldman pulled back a bit, we put out a bulletin recommending that subscribers add some bullish call spreads to an existing option position. Specifically, we advised buying the April 130-135 vertical spread for 1.60. (We already owned the spread a few times for an average 0.36.) We have been expanding our option position for the last few weeks, trying to build a profitable edge across a wide price range. As of yesterday, with a position that included July/April 115 and 120 calendar spreads bought, respectively, for 6.80 and 9.80, we stand to profit no matter where the stock is trading come Friday.
Incidentally, yesterday morning we raised our minimum projection for GS shares to 143.02, a Hidden Pivot. This implies that we will also need to raise our target for the Dow Industrials, which we originally saw topping at 8107. As long as Wall Street’s whackos are intent on doubling the price of Goldman shares from their recent lows, the short-squeeze that has been driving stocks reeelentlessly higher is all but certain to continue.
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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 Tuesday, 14 April 2009 | Digg This Article | Source: GoldSeek.com
