-- Posted Friday, 11 September 2009 | Digg This Article
| | Source: GoldSeek.com
Rick’s Picks
Friday, September 11, 2009
“Phenomenally accurate forecasts”
We’ll know soon whether stocks are about to continue blithely higher, since the S&Ps are stealing up on an important Hidden Pivot target disseminated to Rick’s Picks subscribers a while back. Specifically, we projected a potentially important top in the September E-Mini S&P contract at exactly 1053.00. Yesterday, the futures got as close as 1044.00 before retreating slightly in after-hours trading.
The S&Ps and other broad indexes have now closed higher for five consecutive days, testing the resolve of bears while rewarding traders who have stayed with the bullish trend. Buyers have romped since early March, when the futures touched a bear-market low of 662. Since then, the S&Ps have gained slightly less than 58% while the Dow Average of 30 blue-chip stocks has gained 49%. The latter rally is almost precisely equal to the Dow’s 48% rebound from the 1929 low. This is shown in the chart above.
Regarding our 1053.00 target, it is not chiseled in stone, but we’d be surprised if it shows little or no stopping power. The number is called a “Hidden Pivot,” and it is derived from proprietary methods that measure rallies and declines one cycle at a time. In this case, the cycle is about as clear and compelling as they come, and that’s why we have extrapolated the target to two decimal places.
‘Chopped Liver’ Rule
So how would we view the rally if it were to simply blow past 1053.00 without hesitating? In such instances, we apply the “chopped liver rule” which holds that Hidden Pivots are not, so to speak, chopped liver as long as they have been calculated correctly. Thus, if a pivot seems not to work, it is not because the pivot itself is ineffectual, but because the trend itself has enough power, presumably, to reach the next pivot. This usually means that a bullish cycle of a larger degree is in play. If that is the case here, and 1053.00 is decisively exceeded, we would be looking for more upside to as high as 1153.00. That is the next Hidden Pivot of importance above 1053.00, and it looks even more likely than the lower number to show real stopping power.
From where we’re sitting, a rally to 1153.00 would offer the fattest pitch bears have seen in a long while – an opportunity to get short up the wazoo, but with a very tight stop-loss.
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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, 11 September 2009 | Digg This Article | Source: GoldSeek.com
