-- Posted Friday, 20 November 2009 | Digg This Article
| | Source: GoldSeek.com
Rick’s Picks
Friday, November 20 2009
“Phenomenally accurate forecasts”
In a moment, I’ll get to the deadness of Goldman shares and the fatal implications this may hold for U.S. stocks. But first let me share with you a link to “The Day the Dollar Died,” an extraordinary (and scary) script for a day that is probably coming. The author is a blogger named John Galt, and he has described in detail what will happen when the dollar collapses. Readers of these commentaries will know that we expect this to happen in mere hours, not weeks or months. Galt’s scenario, as the title suggests, plays out so swiftly that no one has a chance to react.
The good news is that he has implicitly provided some excellent defensive strategies for those who would take steps now to protect themselves against economic calamity. For one, he sees the stock markets and currencies of resource-based economies such as New Zealand’s and Australia’s taking off when investors scramble to convert their dollars into anything with tangible value. Obviously, this will be impossible when it suddenly dawns on the world that the U.S. dollar is just a phony IOU. This is irrefutably true now, as most of you already know, but the fact that only a relatively few have acted on it so far suggests there is still a last-ditch opportunity to get one’s house in order.
The Top Is In
Concerning Goldman shares, I’ve advertised the stock not merely as a stock-market bellwether, but as THE bellwether for the bear rally begun on March 9. Now, because Goldman has probably topped out, it seems unlikely that the broad averages will make much headway from this point forward. I’ve reproduced a chart of Goldman above that shows how heavy the stock has become since hitting a recovery high of 190.40 in mid-October. I expect this to be The Top, but not for purely technical reasons. Based on the charts, one might have expected the stock to go somewhat higher before sputtering out. But at this point, it is my strong feeling that the bullish hoax concerning the banks’ return to “health” has been milked for all it’s worth. Americans must surely sense by now that the financial sector cannot continue to prosper as long as Main Street and tens of millions of households remain economically comatose. Americans also understand that the moral logic of still hugely profitable bank trading-desks will not long abide billions in trading profits each quarter as long as bill-paying humanity remains mired in a catastrophic debt deflation.
However, since we should never count out the scumballs who manipulate Goldman shares for a living, we will allow for the possibility of a resurgence to new recovery highs. But the odds don’t look so good right now, and they will lengthen if the stock trashes a Hidden Pivot support at 171.63 that I flagged for subscribers yesterday. As of Thursday’s close, Goldman had bounced twice from within pennies of our target, yielding a profitable day trade for anyone who followed this recommendation in Thursday’s touts section: “The daily chart has been looking too weighty to suggest that [a strong rally] imminent, but we’ll have a chance to test this theory when the stock pulls back to 171.63, the nearest midpoint support of consequence. You can bottom-fish there with a stop-loss suited to taste, but if it’s hit look for the weakness to continue down to as low as 161.84.” The bounces were not very impressive, though.
And there things stand. The stock seems likely to fall another $10, and soon, because it has been unable to trampoline off support as it used to do in the good old days of summer. If this proves to be case, it seems extremely unlikely that the broad averages are about to forge higher.
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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. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. 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, 20 November 2009 | Digg This Article | Source: GoldSeek.com
