-- Posted Wednesday, 15 June 2011 | | Disqus

Rick’s Picks

Wednesday, June 15, 2011

“Phenomenally accurate forecasts”

Stocks got a lift yesterday from retail numbers that supposedly weren’t as bad as economists had expected. Sales dropped “only” 0.2% last month versus economists’ dartboard expectation of a 0.6% decline.  Because it was a merely bunch of economists who were doing the expecting, perhaps we shouldn’t be surprised that the numbers were so far off.  No matter though, since the not-totally-disastrous stats were exactly what the doctor ordered to send shares into a bullish spasm that left the Dow sitting 123 points higher by day’s end. The sales data evidently had been leaked Sunday night, and DaBoyz lost no time using it to put the  squeeze on bears.  They effortlessly ran the index futures up the equivalent of more than a hundred Dow points in thin trading overnight, all but guaranteeing that the broad averages would have to play catch-up on the opening bell.  This is exactly what they’ve been doing for more than two years as the Mother of All Bear Rallies has run its course, but in psychological terms, they don’t seem to be getting as much bang for the buck. There was little joy in Mudville, for one, where a trader quoted by the Wall Street Journal allowed only that stocks were due for a snapback rally. However, he added, “I don’t think one day makes a trend.”

For sure. Permabears looking for the dark cloud rather than the silver-flecked lining need only ponder the hourly chart of the E-Mini S&Ps above. Notice how yesterday’s supposed stampede turned docile just inches shy of two important prior peaks.  We’d have been impressed if the rally had gotten past those peaks on the first try, but now they’ll have to try again on Wednesday, presumably with a running start from yet another thinly traded night session. While it sometimes happens that “real” rallies begin as timidly as this one, accelerating as more and more shorts are induced to cover, we doubt that yesterday’s upthrust has the moxie to get very far. Nor does it have the support of economic data that would persuade anyone other the village idiot or the mainstream media that a strong, broad-based recovery is under way.

To the contrary, even the fraud-based resurgence of the banking sector has come a cropper, with the chart of Bank of America’s shares, for one, looking like the company is headed for bankruptcy (see above).  Hidden Pivot analysis implies that the stock could fall to as low as minus $17. That’s impossible, of course, but we learned during the Great Financial Crisis of 2008-09 that such numbers do have meaning. For in fact, we came up with similarly negative numbers for Bear Stearns (!) and Lehman Brothers (!)  when we sent out an alert to subscribers just before the banking sector went into its nearly fatal dive back then. Even our best-case forecast for B of A is nothing to cheer about. We see the stock falling to at least $1.37 (and you heard it here first). If you want to learn how to do your own forecasting and to be far better at it than many gurus who do it for a living, consider taking the upcoming Hidden Pivot Webinar in late June. For further information click here, and use this code for a $50 discount:  7D5629.

***

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 © 2011, Rick Ackerman. All Rights Reserved. www.rickackerman.com

-- Posted Wednesday, 15 June 2011 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus
Previous Articles by Rick Ackerman

© 1995 - 2019

Live GoldSeek Visitor Map | Disclaimer