We forecast an 1800-point plunge in the Dow Industrials here yesterday, but an even scarier prediction appeared in the Touts section of yesterday’s edition �' i.e., that Citigroup’s shares would fall to $3.58 -- accompanied by the sound of “trumpets from on high.” The way the stock has been crashing though Hidden Pivot supports lately, there was little reason to doubt it eventually would reach the target. But we did not imagine it would happen as early as this week. Now it seems likely. In just the last two days, Citi has plummeted 48%. If you go back to November 14, when the stock traded as high as $14.68, the losses total 70%. Yesterday Citi settled at 4.67 after rebounding in the final minutes from an intraday low of 4.39. We held a small long position coming in yesterday, having bought a few January call options the day before as the stock unraveled. But we told subscribers to dump them for a 35% loss at the opening, fearing (as we wrote at the time) that the former banking giant’s shares were nearing the “vortex of bankruptcy”. Until recently, Paulson & Friends had managed to keep Citi out of the headlines. Although there have been recent announcements of huge layoffs at the bank, the last time they made waves on the front page was when they tendered a bogus, $2 billion offer for Wachovia at the same time Wells Fargo was offering $15 billion in more or less real money. Citi initially had the chutzpah to threaten Wachovia with a law suit in order to force the deal through, but someone way up in the chain of command must have told them to back off and keep their mouth shut. Which they did. But if Paulson was hoping investor scrutiny of
Friday, November 21, 2008
DJIA Dow Industrial Average (7552)
– Posted in: Current Touts Free Rick's PicksI thought I might be able to finagle a reprieve for the Indoos by rejiggering my Hidden Pivot calculations, but even under the most optimistic assumptions, the blue chip average appears to have slipped beyond redemption. Specifically, I slid my point 'A' backward to the 11867 high recorded in mid-August, effectively lowering the ultimate target to 5812 from 6196, but also lowering its associative midpoint. Unfortunately, even the lower midpoint, 7803 (vs. 7995), has already been decisively breached, increasing the odds that the Dow is about to go much lower. Under the citrcumstances, a rally up to either midpoint should be used as an opportunity to get short.
E-Mini S&P (754.75)
– Posted in: Current Touts Free Rick's PicksBoth of the Hidden Pivots flagged here yesterday supported tradable bounces, but the fleeting nature of the rallies warned of the weakness that was yet to come. After hours, DaBoyz were playing squeeze-o-rama, but ineffectually so, since thre 759.25 peak as of early evening was well shy of the 772.25 print it would take to turn even the lowly 1-minute chart bullish. My minimum downside projection for the near term is 726.25, a target that looks quite compelling in the accompanying chart.
QQQQ Nasdaq 100 Trust (25.59)
– Posted in: Current Touts Free Rick's PicksThe ease with which the Cubes crushed a Hidden Pivot support at 25.95 that had served as our minimum downside target portends even lower prices. If so, the next place we might look for a bounce is 24.63. (However, the first spot that looks relatively safe for tightly stopped bottom-fishing is 23.87.) Alternatively, it would take a pop to 26.08 to turn the 1-minute chart bullish. A potentially more significant turn would take a print at 27.83 on the 15-minute chart.
Dollar Index (88.29)
– Posted in: Current Touts Free Rick's PicksI'm raising the 89.22 rally target to 90.38, since DXY is head-butting an 88.25 midpoint associated with the higher number. There is just one Hidden Pivot obstacle between here and there -- 89.22 -- and if it is easily breached, that would hint that the finish stroke to 90.38 is coming without delay.
