Back in January, after the press had written off McCain in the primaries, we published a commentary headlined 'Why McCain Will Win It All'. We've changed our forecast and now think McCain is going to get buried. This is a recent development. Until a few days ago, we'd argued that no matter what the polls said, the presidential election would be almost as close as the last two. Our reasoning was that the electoral quilt of red and blue had not changed much in the last eight years, and that the same voting patterns that obtained in 2000 and 2004 would repeat. But based on anecdotal evidence, and a conversation we had yesterday with a gentleman in the locker room of a local gym, we are firmly convinced that Barack Obama will be sitting in the White House come January. The gentleman we mention was a Republican right out of central casting. A mortgage banker since graduating from Wharton School in the late 1960s, he's retired professionally but sits on the board of some Denver-area corporations. He also does fund-raising for several non-profit cultural organizations and serves as a trustee for one of them. He owns rental properties in Colorado, but also in New York City. A fat cat, for sure. But also an Obama/Biden voter. 'I really hope McCain loses,' he said, unprompted. More than anything, he fears that if Sarah Palin were pressed into service as commander in chief, America would be in deep trouble because of her dismal lack of experience in foreign policy. . (If you'd like to receive Rick's Picks commentary free each day by e-mail, just click here.) Fat Cats for Obama Until we met this guy, we were in denial. Although almost no one we know personally plans to vote for McCain, we
Friday, October 17, 2008
DJIA Dow Industrial Average (8979)
– Posted in: Current Touts Free Rick's PicksThe rally looks bound for at least 9105, or perhaps 9138, since it has already exceeded the 8935 midpoint associated with the latter number, a Hidden Pivot. However, if 9105 were to be exceeded on a closing basis for two consecutive days, we'd be looking at a possible nuclear detonation capable of blowing the Indoos all the way up to Kingdom Come: 10011. Stranger things have happened on Wall Street -- or perhaps not -- but there's no point in trying to look at it rationally. Some attributed yesterday's thrust to the mildly bullish outlook espoused by Bob Farrell in a conference call yesterday to Merrill's brokers. He thinks that recent lows near 7900 could hold for a while, and although we disagree, anything that Bob Farrell says will always deserve the benefit of the doubt.
C Citigroup (15.93)
– Posted in: Current Touts Free Rick's PicksWe blew out eight Citi December 25 calls (CLE) for a $120 trading loss, since Citi failed initially to get any lift from the release of less-than-disastrous earnings (only by current standards -- the loss was more than $2 billion!) The stock eventually rallied, unable to ignore the general hysteria that carried most other stocks higher, but on its own, Citi looked like warmed-over crap yesterday. My hunch is that the stock will not only test the $12 low made last week, but break it and go much lower. For that reason, we'll be looking to leg into a far-out-of-the-money calendar put spread, much as we attempted to do in GM just as it went into its recent death dive. Citi would be a great short for us at 18.02, a midpoint resistance on the hourly chart, but the stock has very seldom accommodated us by rallying to a fat target. In any case, stay tuned!
December Gold (809.50)
– Posted in: Current Touts Free Rick's PicksThe futures crushed a Hidden Pivot support at 806.50, implying there is another wave of selling coming. If so, my minimum downside expectation would be 747.40, a Hidden Pivot derived from the somewhat arcane pattern shown in the accompanying chart. If there's a battle between bull and bears, it will likely take place near 803.30 the midpoint pivot associated with the 747.40 target.
November Crude (72.79)
– Posted in: Current Touts Free Rick's PicksCrude did everything we asked of it yesterday, stair-stepping its way down to the lowermost of three Hidden Pivot targets that had been identified here. The intraday low at 68.57 exceeded the target by 33 cents, which in this vehicle is not quite enough for us to infer that more weakness is likely over the near term. If the rally does indeed continue, look for a midpoint pivot at 73.72 to show some stopping power. However, a decisive breach of that hidden resistance would portend more upside over the near term to as high as 75.39.
