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-- Posted Friday, 21 May 2010 | Digg This Article | | Source: GoldSeek.com
Rick’s Picks Friday, May 21, 2010 “Phenomenally accurate forecasts” Funny how the “accident” that sent the Dow plummeting a thousand points a couple of weeks ago has morphed into the real thing. The blue chip average fell 376 points yesterday, and we’re predicting it will fall a further 470 points, to exactly 9592, before buyers get decent traction. Easy come, easy go, as they say. The initial selloff was originally attributed to a clerical error. If this turns out to be true, Wall Street may yet produce a scapegoat for the bear market disaster that is yet to unfold. Something like this happened when epidemiologists traced AIDS back to patient zero, a French Canadian flight attendant named Gaetan Dugas. He died young, evidently before a torch mob could find him, but you can bet the Wall Street clerk is already living under an alias, assuming he ever existed. The charts offer an indictment that does not distinguish between a clerical error and a real panic. Let the stock and futures exchanges bust all of the trades they want and say it never happened. The swoon will always be there in graphic form, a synecdoche for these interesting times. In the meantime, they have provided us with ABC price points that make predicting the future, at least for the moment, a piece of cake. Be sure to remind us in a week if that 9592 target doesn’t pan out. We’ll be out on the ledge, entertaining a crowd.
With the stock market in avalanche mode yesterday, some Rick’s Picks subscribers seemed to despair that Gold might continue to fall in sympathy. Bullion has been hit pretty hard this week, to be sure, and it was taking yet another pounding Thursday night as we went to press. But we doubt that sellers can keep it up, lacking as they do a persuasive argument that paper money will stand the test of time (as when has it ever?). Concerning the U.S. dollar’s recent show of bravado, we agree with Jim Sinclair on this one – that speculators will get around to savaging the buck in good time, but only after they’ve finished pounding the euro into bloody submission. In the meantime, we should view bullion’s current weakness as a buying opportunity rather than evidence of deleveraging run amok. As one sage gold trader noted in the Rick’s Picks chat room yesterday, “We needed a pullback to let the air out a little.” You can tell that the selling has been stage-managed by the usual coven of bullion bankers simply because so much of it has occurred on thin volume in the dead of night. Even so, we’ll keep a close eye on Comex Gold’s daily and hourly charts (see above). Just as the 14-month-old bear rally in stocks has been manipulated on thin trading in the wee hours, so have gold’s periodic selloffs. A print below 1156.20 (basis the June) by Monday would be warning of more weakness to come and of a possibly prolonged struggle between bulls and bears as summer begins. Caveat emptor. *** 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 © 2010, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Friday, 21 May 2010 | Digg This Article | Source: GoldSeek.com
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