-- Posted Thursday, 14 May 2009 | Digg This Article
| | Source: GoldSeek.com
Rick’s Picks
Thursday, May 14, 2009
“Phenomenally accurate forecasts”
Did the bear rally breathe its last with yesterday’s sharp reversal? We shall see. But we hesitate to call the hubris of the last ten weeks a sucker’s rally, since we do not personally know anyone who did not hate and revile it every step of the way. A “bull trap” is what the rally will come to be called if stocks now fall in the weeks and months ahead, since many who eagerly bought into it will drown as the bullish tide recedes. However, since March 6, when the rally commenced on news that Citi had actually made money, it is bears who have been trapped. It could be said in their defense that trying to pick a top in the current economic environment is an unavoidable temptation, especially with the news media conjuring up a picture of hope and recovery that any fool could tell you is a mirage.
The reporters who write these stories need only chat with their neighbors to find out what is really going on. Instead, they dutifully quote Ben Bernanke blathering about how the recession “should end” later this year. We haven’t seen any details concerning how this might occur, but the Fed chairman himself has cited the stock market’s rise as the most convincing evidence that it will. A supposed student of history, Helicopter Ben could probably benefit from poring over some stock charts from the 1930s, since the two very powerful rallies that occurred during that decade no more signaled recovery than Hitler’s invasion of Poland signaled stability for Europe.
The Hangman Cometh
In the publicly accessible Rick’s Picks forum, one technician who identified himself as “Jay” saw conclusive signs of a major reversal: “There are pretty good technical indications that the recent sucker rally topped this morning,” he wrote. “Examples: Japanese Candlestick Chart with a ‘hang man’ symbol [on Tuesday], plus a ‘key reversal bar’ to the downside today. These two are ringing the bell to alert us that a major top should be in (prices not to be seen again in a long time).”
We would agree that the bear rally was getting a bit toothsome, but we await further evidence that the short-covering frenzy has breathed its last. In the days ahead, we promise to let you know if the stake that now protrudes from the bull’s heart should evince something more than a death rattle. Stay tuned.
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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 © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Thursday, 14 May 2009 | Digg This Article | Source: GoldSeek.com
