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COMMENTARY for Saturday
TODAY'S ACTION for Friday
Rick's Picks for Friday
Close but no cigar. Goldman opened on a short-squeeze gap that came within 74 cents of our target — not close enough to get us short using the strategy that was recommended. We’ll set the trade aside, but I should mention that anyone who was long coming in yesterday might have used what I call a “dynamic trailing stop,” keeping risk and reward in a 1:3 ratio at all times. This means that when the stock came within 74 cents of the target, an implied trailing equal to a third of that, or 25 cents, would have been in effect. I read it as moderately bearish that Goldman fell so hard without having achieved the target. Since the stock is a key bellwether for the market as a whole, we’ll need to monitor its further progress/regress closely.
The 1074.50 target kept our confidence from wavering when gold recently came under (futile) attack. I still expect sufficient resistance at that price to warrant a position adjustment by long-term investors. A tradable pullback seems highly likely, and even if it is not a big one, odds are good that you will be able to replace any stock exited with shares acquired at a lower price. If the futures trash the target, however — and by “trash,” I mean close above it the day they first hit it — that would indicate they are gunning for a major Hidden Pivot at 1134.50 identified here yesterday.
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SIDE BETS for Friday
Just a reminder that we have a score to settle with Google if and when it gets to a 553.87 target flagged here a while back. We’ll almost surely use a camouflage entry to avoid pain and risk to the extent possible, so stay tuned.
Hidden Pivot Webinar & Tutorials
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Rick’s Picks Weekend Edition
by Stephanie DeMaria on October 10, 2009 12:01 am GMT
A Bad Time to Put the Knock on Gold?
“Gold Is Still a Lousy Investment,” proclaimed a Wall Street Journal headline over the weekend. Does this sound like sour grapes, or what? It ran atop a feature by Dave Kansas in weekend editions. Kansas, who used to work for Jim Cramer, is currently European markets editor for the Journal. We wonder what could have possessed him at this moment to do a hit-job on gold, since it is one of the only investment assets to survive the global asset crash of the last several years. It is also one of just a small handful of investment assets that is still worth more than in 1999. Much more, actually. And most recently, no…
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World Is Watching Stanford’s Fire Sale
Stanford University is attempting to unload $1 billion worth of hard-to-sell assets — a treacherous undertaking that the Wall Street Journal said was being closely watched by private equity. That’s an understatement, since hundreds of the world’s biggest institutional and sovereign investors have portfolios very similar to Stanford’s, and many of them will be equally desperate to raise cash in these straitened times. The portfolio model they have embraced, perhaps all too eagerly, in recent years was pioneered by…
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Inflation Arguments Too Lame to Debate
On the Rick’s Picks web site yesterday, we featured a link to Mish Shedlock’s latest, lovely essay concerning deflation. We thought we could avoid getting drawn into the debate ourselves, but it was not to be: the topic touched off quite a firestorm in the forum that began with this introductory note on the home page:
“We stopped ‘debating’ the inflationists a while back simply because their arguments had become too bloody stupid to endure. Obviously, they have not been playing with a full deck, since they continue to obsess over the absolutely useless textbook definition of deflation – ‘a decrease in the money supply.’ Rather than have you become confused by all the drivel…concerning the money supply, which virtually no one [really] understands, we would rather that you see deflation for what it is [in our lives]: an increase in the real burden of debt.
“One of my ablest comrades-in-arms has been Mish Shedlock, a deflationist with more patience…
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Two Mining Stocks with High Leverage
Let’s look at two exploration companies which are linked by their being undervalued and by their locations in Quebec, one of the most mining-friendly places in the world. Becanse these companies operate in Quebec, the market will assign a premium to their respective share prices. Plus, in both cases the infrastructure is also very positive, a detail not to be ignored. Please remember that for any stocks I recommend, I suggest that you go to their…
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Deflation Overwhelms Niggling Price Hikes
We’ve had a rollicking good time in the Rick’s Picks forum lately as inflationists sought to rise to the level of debate in explaining why deflation is unlikely. You can judge for yourself how well they succeeded by clicking here, but on our scorecard, at least, they didn’t win a round. How could they have when they are evidently blind to evidence that the global engine is perilously close to being suffocated by deflation? As always, there were quite a few beleaguered consumers ready to testify that they are getting hammered by rising grocery prices. One of them is a friend of ours who lives in an L.A.-area home that has lost a third of…
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