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-- Posted Friday, 28 August 2009 | Digg This Article | | Source: GoldSeek.com

Rick’s Picks

Friday, August 28, 2009

“Phenomenally accurate forecasts” 

It’s been more than two years since we’ve seen the Dow Industrials rally for eight consecutive days, but it happened yesterday with a little help from Boeing, which gapped almost $4 higher on the opening bell. If you’re wondering how the Dow’s winning streak in April of 2007 fared, it turned out to have been just the beginning of a spectacular run-up that carried the blue chip average to its all-time high six months later, in October. The rally stalled along the way and went into a nasty dive in July, but the recovery was nearly as steep and eventually carried the Indoos up to 14198, the highest peak ever recorded.

Could we be witnessing the start of a similar mania? In fact, the rally from March’s lows already qualifies as a mania, since the Dow has gained 49% in just five months. If stocks are about to move into an even steeper trajectory, that would imply a blowoff to who-knows-how-high.  The round number 10000 would seem like a logical one to use, but getting there would only take a relative hiccup from the current level of around 9580. But the Industrial Average need only exceed 9654, equal to a peak made last November, to demonstrate that it’s got the moxie to at least remain buoyant for the remainder of the year.

Nailing the Little Porker…

From a tactical point of view, we’ll be trying to short this market every time it pokes its scruffy little snout above the old recovery high. Using Hidden Pivot targets, the risk of doing this has been minimized, and we’ve actually made some winning trades with stocks going against us. Earlier in the week, for instance, Rick’s Picks recommended shorting the E-Mini S&P at 1034.00 with a very tight stop-loss of 1.25 points. The actual top occurred at 1935.00, and when the futures dove thereafter to 1018.25, subscribers were told to cover most of the short position for a theoretical gain of between $400 and $837 per contract. The E-Mini rallied ferociously he next day, but we had anticipated this with a stop-loss at 1030.00 for whatever shot contracts remained.

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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 Friday, 28 August 2009 | Digg This Article | Source: GoldSeek.com

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