-- Posted Thursday, 15 April 2010 | Digg This Article
| | Source: GoldSeek.com
Rick’s Picks
Thursday, April 15, 2010
“Phenomenally accurate forecasts”
Better take a mental snapshot of yesterday’s glorious economic news, since it’s hard to imagine things will get much better. Retail sales for March were up a reported 1.6%, the service sector supposedly is rebounding nicely, and big-ticket items are starting to sell like it was 2006 all over again. Economists were ecstatic, of course, since the torrent of good news allowed them to upwardly revise their forecasts for 2010 and beyond. Nor were the sunny tidings confined to Main Street. Over on Wall Street, J.P. Morgan weighed in with a 55% gain in profits for the first quarter, amounting to a tidy $3.3 billion. Much of it came from their trading desk -- and a good thing, too, since we’d have been gravely concerned if their best and brightest had somehow failed to make money betting the “pass” line on a stock market that has been rising on maybe eight days out of ten in recent months.
And rise once again they did yesterday, surpassing yet another Hidden Pivot target with effortless aplomb. We’d been using 11077 as a minimum projection for the Dow Industrials for the last several hundred points; yesterday the blue chip average hit 11125, exceeding our mark by 48 points. A companionable target in the E-Mini S&P gave way almost as easily, implying that buyers are not yet finished.
Cool Ben
With all the hoopla and hubris, leave it to Helicopter Ben to totally keep his cool. Here we have an economy that is going absolutely bonkers, and the guy insists there is little to fear at the moment from inflation. This obviously was music to Wall Street’s ears, since it means that no matter how strong the recovery gets, the Fed sees no great urgency about raising the federal funds rate. We love the way Bernanke’s amen corner at the Wall Street Journal put it: “His inflation assessment gives the Fed room to be patient about raising rates.” Is “patient” the perfect non-word here, or what? Easy Al Greenspan himself could not have come up with a more innocuous way to describe de facto easing in a financial system that is already glutted with government largesse.
So now we get to imagine GDP growth barreling along at 5%, but with 4% mortgages and even lower rates for the 10-Year Note. If these things should come to pass, the Dow Industrials will probably trading above 20,000. Isn’t it time to spend some of the anticipated gains at Best Buy? That would be pretty patriotic, actually.
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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 Thursday, 15 April 2010 | Digg This Article | Source: GoldSeek.com
