Financial stocks got goosed yesterday, and for a few blissful hours everything was right with the world. The shares of JP Morgan led the way, up 26%, followed by Goldman Sachs, which tacked on $10.80 to close at exactly $70. A while back, we promised to don a grass skirt and dance the hula in Times Square in the middle of winter if Goldman does not eventually fall to at least $29. However, yesterday's wilding spree in the banking sector may have pushed back a day of reckoning till February of 2010. Meanwhile, every big rally offers a fresh opportunity to get short, even if the position is not one that you could simply forget about till 2010. Nor is there such thing as a buy-and-hold, as Apple shares have demonstrated time and again. The stock has gotten pummeled repeatedly in recent weeks because of speculation over Steve Jobs' health. Yesterday, though, AAPL soared on great earnings news, trading up $12 after the close. We have trouble believing that the upbeat announcement could have been surprised anyone, though. We mentioned here the other day that Apple stores were packed during the holiday shopping season and have remained so since. The same is true for Verizon stores we've visited over the last couple of months. You could load up on Verizon call options ahead of earnings, but we like the Steelers more, even giving up seven points. *** Inflation vs. Deflation We were deluged with responses after we challenged readers to explain how inflation might emerge amidst the devastating asset collapse now occurring throughout the world. [ Click here to drop in on this lively discussion at the Rick's Picks forum.] Here's another great letter that offers much to enlighten, from reader Eric Andrews, to whom we are most grateful: "I'll
Thursday, January 22, 2009
February Gold (853.20)
– Posted in: Current Touts Free Rick's PicksOur bid down at 841.00 missedededededed the intraday low yesterday by $1.50 -- not quite close enough to get us aboard. Now, the futures look bound for an important hidden resistance at 876.90, the midpoint of a pattern tracing back to November. A decisive intraday breach of the pivot, or a two-day close above it, would hint of more upside over the next 2-3 weeks to as high as 952.30. However, even if such a thrust awaits, the futures do not yet appear ready for it. If it were otherwise, they would have taken out the two labeled peaks before receding in the last couple of days.
DJIA Dow Industrial Average (8228)
– Posted in: Current Touts Free Rick's PicksYesterday's snap-back rally followed the serious breach a day earlier of an an important midpoint support at 7985 shown in the chart. (The E-Mini S&P did likewise.) The actual low occurred 45 points beneath the support, and although we'd said it would be cause for concern if the Indoos closed beneath the pivot for two consecutive days, the 45-point penetration is probably reason enough to view the rally with skepticism. Our opinion could change, but it would require nothing less than a 932-point rally from here to do the trick, since that would create a bullish impulse leg on the daily chart. We won't hold our breath, but neither will we attempt to intercept this nuttiness until there are signs of terminal fatigue, as there will be. In the meantime, our minimum downside target is 6883, and it will remain so until such time as 9089 is exceeded to the upside.
