Just when things looked darkest yesterday, Jim Cramer apparently saved the day by telling CNBC's viewers to 'Sell everything!' We thought for sure the Dow would be down a thousand points, but when the Mad Man of Wall Street hit the panic button on the Today show, the blue chip index turned miraculously higher, recouping more than half the session's losses to finish down a less-than-suicidal 370 points. We don't mean to suggest that Cramer is foolproof as a contrary indicator, or even that we dislike the guy. He's a smart cookie who knows his way around the investment world, and, occasionally, talking to millions of CNBC faithful, he'll even put the knock on a lousy stock. (For one, he was all over Boeing's suppliers a short while back, a few critical days ahead of sellers who trashed the group's shares because of the machinists' strike at Boeing.) This time around, Cramer has advised pulling out of the stock market completely if you are going to need your assets in the next five years. 'I thought about this all weekend,' Cramer told the Today show's Ann Curry. 'I do not want to say these things on TV." And you know he's telling the truth about that, since no one has ever stayed in the public eye for long by telling it like it is. While we don't doubt that Cramer was being sincere, we would be surprised if he doesn't find a way to express lovely, Kudlowesque thoughts when he's on the air in the months to come -- regardless of how relentlessly stocks are falling. Where We Disagree Like us, Cramer expects Q3 earnings to be worse than horrendous. But we part company on two key points: 1) he evidently thinks stocks could work their way back to new
Tuesday, October 7, 2008
C Citigroup (17.10)
– Posted in: Current Touts Free Rick's PicksWe were briefly long some December 17.50 calls yesterday but bailed out for a piddling loss of less than $30 when the stock failed to do what we had expected. We also naked-shorted a November 12.50 put for 1.20, reducing our premium risk on four Nov 15-20 put spreads that we already owned effectively to zero. We are in a position to not give a hoot what Citi does for the next month, although our bet will work best if the stock doesn't strengthen too much. Regarding Citi's legal battle with Wells Fargo over Wachovia, the most bullish scenario possible would be for Citi to lose the fight, since it is not in a position to make hay with an acquisition.
E-Mini S&P (1050.25)
– Posted in: Current Touts Free Rick's PicksThe futures were down almost 100 points yesterday, overshooting by 9 points the very bearish target at 1020 that I'd furnished. The subsequent short squeeze off the lows, coming as it did after a Hidden Pivot support was breached, is a patent fraud, but we'll need to respect it anyway, since it created an unmistakably bullish impulse leg on the 15-minute chart. I've reproduced the chart alongside so that pivoteers can extrapolate a c-d midpoint to get short overnight, or perhaps early in Tuesday's session, once a point 'C' low is in.
December Gold (866.80)
– Posted in: Current Touts Free Rick's PicksYesterday's rally got impressive mileage, but let's hold off on the celebration until it clears the external peak at 881.60 shown in the chart. The fact that the bull will not have achieved this feat on the first attempt is mildly discouraging, but it's nothing that a pop today exceeding 904.20 (a tiny peaklet made on the way down September 30) wouldn't cure instantly. That would be very bullish indeed for the near term.
Silver December Silver (11.210)
– Posted in: Current Touts Free Rick's PicksThe good news is that the futures show no great eagerness to pull back to the 10.640 support noted here earlier. However, to "actualize" the bullish implications thereof, they'd need to surge above 13.080, a peak recorded last Wednesday on the way down. Until one or the other occurs, the December contract is in limbo, tradable only by way of patterns discernible on the 3- and 5-minute charts, though probably not the 15.
