-- Posted Monday, 25 June 2012 | | Disqus
Crude oil prices appear primed for a nearly 30% collapse, implying that the global economic slowdown is starting to take hold. Our minimum downside projection for August Crude, currently trading for around $80 a barrel, is $55.69. That target was derived using our proprietary method of technical analysis and would imply a decline of 27% from current levels. Please note that this is our minimum bear-market price objective and that crude’s ultimate bottom could be significantly lower. How much lower? If the “Hidden Pivot support” at $55.70 were to give way easily, we’d infer that quotes as low as $35-$40 a barrel impend.
That might be viewed as great news by the mainstream media, since it suggests that gasoline prices are headed below $2 a gallon. But that’s like saying a nuclear detonation in midtown Manhattan would be great news for apartment dwellers because it would solve everyone’s cockroach problem. CNBC’s “experts” seem to think that a mere softening of crude prices would act as a kind of tax-cut stimulus for the U.S. economy. But softening is not what we foresee — more like a deflationary bust in a key global commodity to which huge swaths of financial assets are tied. And although we’ll concede that more travelers will hit the roads this summer if gasoline prices fall below $3, the gain in tourism dollars would not be much of an offset to the global economic collapse that appears to be gathering force.
Summer of ’87?
At this point, it looks like a perfect storm. Europe’s economy is about to go into a recessionary free-fall, China’s slowdown is looking increasingly like a hard landing, and the U.S. is at cliff’s edge on jobs, income growth and consumer confidence. Statistically speaking, all are fading so fast that it seems clear the Great Recession’s dead-cat bounce is just about over. In the meantime, we should expect Wall Street and its news-media lackeys to keep stocks buoyant for as long as possible so that the rubes – including widows, pensioners and Baby Boomers desperate for yield — can be enlisted as bag-holders before the boom drops. We have our doubts that DaBoyz will be able to keep this shell-game going till August, as they did in 1987. In fact, it’s possible that early May’s highs in the broad averages will come to be seen as a top equivalent to the one 25 years ago that preceded the October Crash.
For our part, we’ve enlisted graduates of the Hidden Pivot Course to help identify short-able, corrective rallies in such popular trading vehicles as the Diamonds (DIA), the QQQs and the E-Mini S&Ps. Want to join us? A free trial subscription, including access to a chat room that doesn’t sleep, is yours by clicking here. And if you’d like to have Rick’s Picks commentary delivered free each day to your e-mail box, click here.)
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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 indication 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 Monday, 25 June 2012 | Digg This Article
| Source: GoldSeek.com
