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-- Posted Wednesday, 17 June 2009 | Digg This Article | | Source: GoldSeek.com
Rick’s Picks Wednesday, June 17, 2009 “Phenomenally accurate forecasts” Sometimes common sense comes from the most unexpected places. Consider this bearish take on the stock market from – better sit down for this – a Morgan Stanley strategist, Jason Todd: “Equity markets now implicitly need a V-shaped recovery to sustain further gains,” he told a reporter for the Wall Street Journal yesterday. “We do not expect such a recovery and therefore believe the next move is more likely to be down than up.” What’s next? A warning from Abby Cohen, perhaps, to lighten up on stocks? Actually, it looks like traders aren’t waiting for the preternaturally bullish Abby to sound the alarm, since they pummeled the Dow Industrials for a nearly 300-point loss in the last two days. That’s not much compared to the heady days of last autumn, when we saw the blue chip average fall more than twice that in mere hours. But it does represent a minor triumph of head over heart at a time when green shoots of recovery have been spotted growing out of every crack in the asphalt from New York to Michigan to California.
We haven’t seen any shoots ourselves other than a few weeds, although we did advise some cautious bottom-fishing in the shares of Apple yesterday if the stock dips just a bit lower. We also hold a small long position in Akamai, a “cloud computing” favorite that has been in a holding pattern since, seemingly, the dawn of history. These two stocks seem like pretty conservative plays to us, since both companies have been doing relatively brisk business even with the global economy in a deep funk. But it never hurts to have some insurance, and that’s why we were bearishly bidding yesterday for some put options on the Diamonds, a trading vehicle that mirrors the action in the Dow Industrials. We lowered our bid minutes before the opening because index futures had moved higher overnight, predicting a flurry of buy orders at the bell. The buyers did indeed arrive, but not exactly in droves, and so that puts never traded down to our price. We missed buying them by a measly 13 cents. Were we being penny wise but pound foolish? And: Is it greedy of us to think Mr. Market will gift us with a small rally if we enter another stingy bid this morning?
*** 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 Wednesday, 17 June 2009 | Digg This Article | Source: GoldSeek.com
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