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-- Posted Monday, 27 September 2010 | Digg This Article | | Source: GoldSeek.com
Rick’s Picks Monday, September 27, 2010 “Phenomenally accurate forecasts” The Mother of All Bear Rallies wafted to within easy distance on Friday of re-energizing a bull trend that had seemed unstoppable until last spring. Back then, buyers who had driven the broad averages higher for fourteen months at an unsustainable, 45-degree pitch turned flaccid, sending stocks into a 1000-point sine wave that for four months has defied easy categorization as either a consolidation or distribution. However, bulls will have a chance to take charge unambiguously on Monday when stocks begin to trade, since it would take a mere 60-point rally, to 10921, by Tuesday’s close to turn the Dow’s daily chart decisively bullish. We should note that that wouldn’t quite clinch the bullish case for the longer-term, however, since a thousand-point rally to at least 11868 is needed.
Last week’s dramatic liftoff was brought on by the usual suspects, including: 1) the virtual absence of sellers in a market that has been driven 99% by computer-trading and institutional prop desks; 2) a sufficient quantity of aggressively spun but ultimately meaningless “good” news to drive short-squeeze buying through key resistance; 3) a helping hand from opportunistic buying of U.S. index-futures in illiquid, overnight markets; and 4) a mood-driven window of opportunity for the mountebanks, self-promoters and insipid droolers of the talking-head world to interpret whatever news hit the tape as bullish. For example, there was the marquee-named Quincy Krosby. She is the chief market strategist at Prudential Financial, and her cue was an item on the tape that said U.S. companies were spending more, according to the Wall Street Journal, “at a time when the global economy looks to be on the rise.” No matter that the rising appearance of things was as fleeting as dew on cactus, or that the supposed uptick in corporate spending apparently involved just a handful of high-tech firms. Such details were easily overlooked in a moment when virtually any and all news that crossed the wire was going to be construed as bullish.
Follow a Bear’s Bear
Naturally, this pendulum swing toward giddiness included the obligatory, bullish take on the U.S. dollar’s ongoing collapse -- about how this would “help’ U.S. exports, even if we hardly export anything any more save Hollywood movies and cultural flotsam. The resident genius at Jefferies, market analyst Art Hogan, took a pot-shot at all of the silly talk about a double-dip recession. "The concept of a double-dip recession has been replaced with slow and steady improvement [oh really?], and even if we don't get it, we have a Federal Reserve that's ready to step in and support the rally," said Hogan. Not to be outdone at elevating abject inanity to the status of cult religion, the Journal itself provided this transitional paragraph: “The market also received a boost from the Federal Reserve's message earlier in the week that it is prepared to take action if the economy weakens.” This sentence pretty much sums the forces that are driving the markets higher. It’s OPM at work, and who are we to argue with such factually-challenged craziness. If you’d like to be on top of a powerful rally as seen by a bear’s bear, we’d suggest that you check out our daily trading recommendations by taking a free trial to Rick’s Picks. *** 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 Monday, 27 September 2010 | Digg This Article | Source: GoldSeek.com
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