Rick's Picks » Commentary

The Lesson of Greece for Flint, Michigan

Rick Ackerman — Thu, 09 Feb 2012 01:23:58 +0000

The financial world was on pins and needles Wednesday as it awaited Europe’s latest, quasi-momentous decision on the fate of Greece. The Greeks themselves, no fools, were a step ahead of the politicians and bankers, rioting in the streets. Many of them have probably imbibed enough austerity to last a lifetime. Keep tightening one’s belt a notch at a time and eventually you’re left with two bloody torso halves. Not that the bankers would mind the mess as long as they get paid. So what, actually is at stake in this latest chapter of the eurobailoutpalooza? The rescue package under discussion amounts to a piddling €130 billion, and we can’t see how it’s going to make much of a difference. Even if it’s only intended to buy a little time, a sum as meager as that may not see the Eurocrisis through the weekend, much less through 2012. For perspective, Flint, Michigan’s unfunded retirement and health benefits total about three times as much. Is Flint in worse shape than Greece? Hard to say, although the close proximity of such charming resorts as Corfu and Rhodos, as opposed to beautiful downtown Detroit, would seem to tip the quality-of-life numbers in favor of the Greeks, even the down-and-out day-trippers. (...)
Read the rest of The Lesson of Greece for Flint, Michigan

Rick's Picks is a trading newsletter for stock, gold, silver and mini-indexes. All trades are based on the proprietary Hidden Pivot technical analysis method.
© Rick Ackerman and www.rickackerman.com, 2012. | 15 comments |

Led by Banks, Stocks Are Inches from Key Targets

Rick Ackerman — Wed, 08 Feb 2012 00:19:59 +0000

The stock market hasn’t been much fun to trade in a while, but that could change today as the broad averages approach some potentially important rally targets of ours. Want to know exactly where these targets lie but don’t subscribe? Click here for a free trial subscription that will give you access to our proprietary numbers. One of them foresaw a 600-point rally in the Dow that is nearly complete. The other is a bullish target for the E-Mini S&Ps that smacked us in the eye yesterday with its clarity. There are also two bank stocks whose deft handlers appear to be setting up suckers for the kill. These financial biggies are household names, but because they are in the thick of Europe’s bailout hoax, they are destined to go down with the ship. Under the circumstances, the hysterical, short-squeeze rallies that have driven their shares steeply higher may be ready to seven-out. (...)
Read the rest of Led by Banks, Stocks Are Inches from Key Targets

Facebook IPO Hubris a Sad Commentary on America

Rick Ackerman — Tue, 07 Feb 2012 05:42:22 +0000

It’s a sad time for America when a firm that does what Facebook does is on track to become one of our largest companies. Based on capitalization, the web-based lubricator of social interaction could be in the top 50 within a few years, or even in the top 25 if analysts’ wildest expectations pan out. Facebook’s IPO promises to top Google’s $27 billion offering, reaping early backers a giant windfall. But wouldn’t it be far better if a company that actually made something were to enjoy such extravagant enthusiasm on Wall Street? Facebook of course makes nothing, and what it sells is of little economic value to anyone. And yet its founder, Mark Zuckerberg, is about to become one of the wealthiest men in the world.(...)
Read the rest of Facebook IPO Hubris a Sad Commentary on America

Dubious Payroll Numbers Ignite Wall Street

Rick Ackerman — Mon, 06 Feb 2012 01:26:27 +0000

As last week ended, one might have believed Wall Street investors had just about everything wrong. Stocks were up sharply on bullish payroll news that flatly contradicted something every American knows – i.e., that the Great Recession is still very much with us; T-bonds were getting whacked on the flimsy assumption that the economy is picking up strength; and gold and silver were under attack because, well, because all was right with the world. Even the hacks and scribblers who bring us the news did their bit to feed Friday’s feel-good binge. For one, there was nary a discouraging word on the Web’s main news pages about Greece and its slow-motion bankruptcy – only a story about how Europeans were working diligently to protect the homeless from a cold snap. And the left-tilting L.A. Times, thinking wishfully, weighed in with the most fatuous story of the day: an analysis piece saying that the payroll numbers could prove to be a turning point in Obama’s reelection year — the day when he shifted from slight underdog to favorite. (...)
Read the rest of Dubious Payroll Numbers Ignite Wall Street

Another ‘Camouflage’ Trade, This Time in Silver…

Rick Ackerman — Fri, 03 Feb 2012 02:09:40 +0000

We’ve been known to keep odd hours, which, depending on the circumstances, can be good or bad when attempting to earn one’s daily bread trading. Sometimes it seems as though the best opportunities — meaning the ones that produce quick and easy gains with relatively little stress – occur in the dead of night. At other times, especially in the first hour or so after the opening bell, the low-hanging fruit positively beckons those who are able to stay cool while most other traders, too scared to act, are waiting for the dust to settle. We love it when the action is heated – wild, even — since this tends to drive most other traders to the sidelines. Let them sit on their thumbs, as far as we’re concerned – it just means easier pickings for us. When things get moving, the Hidden Pivot Method that we use to trade and forecast is especially good at identifying the “filet” of uptrends and downtrends. As such, the terms bullish or bearish apply only to the extent that the “impulse legs” that drive these trends are headed higher, or lower, in a given time frame. (...)
Read the rest of Another ‘Camouflage’ Trade, This Time in Silver…

An Elusive Bear Market Low in Natural Gas

Rick Ackerman — Thu, 02 Feb 2012 01:32:17 +0000

Natural Gas futures were trading for around 3.58 in November when we projected a possible bear-market low at $2.30. Imagine our excitement when, ten days ago, on January 23, the March futures contract trampolined from within exactly 1.6 cents of our target, shattering the despair and deathly calm of a relentless, multiyear sinking spell that had not seen respite since last spring. The initial leap was enormous, to 2.63, and anyone who bought down around the target would have reaped a $3400 profit per contract on the first day of the move. We had prepared subscribers for a potentially tradable bounce, reiterating our contrary stance on January 12 with this advice: The futures were barely able to muster a dead-cat bounce on that last effort. Even so, the 2.305 will remain a good place to try bottom-fishing aggressively with our habitual penny-ante stop-loss. At the time, the futures had been falling, falling, falling, but they were still well above our target, trading around 2.80. However, the next week saw them plunge, kamikaze-style, precisely to the Hidden Pivot support where we had anticipated a turn. (...)
Read the rest of An Elusive Bear Market Low in Natural Gas

Why We Don’t Swing for the Fence Trading Gold

Rick Ackerman — Wed, 01 Feb 2012 02:21:11 +0000

Although we’d be thrilled to be able to brag a year from now that a trade we recently advised in Natural Gas futures caught a bear-market low within two cents, we’re not prepared to bet the farm on it. Similarly, a winning gold trade that got stopped out earlier in the week may have caused us to miss a moon shot, but we’re not about to look back. For when all is said and done, we’d rather not be prayerfully holding our breath or losing sleep as gold in particular swoons, leaps, caroms and careens its way higher. Aggravation and stress aside, on a simple risk:reward basis there is never justification for buy-and-hold speculation. Yeah, we’ve heard the story about the commodity whiz who made $50 million riding a brahma bull in soybeans/cattle futures/crude oil all the way to the top. But the guy couldn’t possibly have made all of that money without experiencing devastating setbacks along the way. And he could not have kept doubling down on subsequent trades without giving it all back. In our book, it is slowly but surely that wins the race, and the massage we preach to subscribers and students who take the Hidden Pivot Course is to never risk more than $1 to make $3. This applies along the entire route of a trade, from entry to exit. Moreover, we recommend that positions be constantly “worked” so that s trader’s hard-won gains will not be entirely and constantly at risk. (...)
Read the rest of Why We Don’t Swing for the Fence Trading Gold

Europe’s Banks Afloat on Dwindling Credibility

Rick Ackerman — Mon, 30 Jan 2012 22:01:47 +0000

Sometimes it’s impossible to tell whether the financiers and politicians who carry water for the central banks are bad liars or just clueless dolts. A bureaucrat from the U.K. surfaced in the Wall Street Journal over the weekend, exhaling what seemed to us an ostentatious sigh of relief over the supposed success of the European Central Bank’s latest loan program: “[It provides] a very significant degree of breathing space to banks.” Yeah, sure. A very significant degree — as though the banking system’s terminally decaying colossus were not in danger of imploding tomorrow — and for no greater reason, possibly, than that some hapless bank clerk erroneously misplaced a decimal point.

The bureaucrat’s remark appeared, with unintended irony, in a story about how European banks are in a quandary over how to redeploy a torrent of digital cash that has recently come their way from the ECB’s magical credit-infindibulator. Recall that the banks sucked up €489 billion ($641 billion) in a matter of weeks after the ECB made that sum available to them in December for three years on super-easy terms. But what to do with it all? None of them are in the mood to lend to – heaven forbid! — businesses, and that leaves only two bad alternatives: using the digital money to buy government bonds from the(...)
Read the rest of Europe’s Banks Afloat on Dwindling Credibility

A Really Bad Plan for Reviving the Housing Market

Rick Ackerman — Thu, 26 Jan 2012 22:01:35 +0000

For breathtakingly stupid political ideas and catastrophic “solutions” to America’s biggest problems, it’s hard to beat the New York Times op-ed page. There, joined by such jihadists of the Left as Frank Rich and Maureen Dowd, resides the peerlessly wrong-headed economist Paul Krugman, whose Nobel Prize was as well-deserved as the one Yasser Arafat received for helping to bring Peace to the world. Until yesterday, we might have thought Krugman had cornered the market for the absolute worst ideas on how to revive the economy. Here’s a guy who actually seems to believe, in his heart of hearts, that the reason this has not yet occurred is that the central banks of Europe, the U.S. and Japan have not thrown enough money at the problem. We stopped counting stimulus dollars and guarantees ourselves when the total hit $15 trillion a couple of years ago. That was long after we’d become convinced that deficit spending in such cosmic quantities, far from reviving the economy, would ultimately bury the U.S. in debt. As it has. Such concerns pose no problem for Krugman, however, since he simply avoids using the word “debt” in his Martian-friendly economic essays. (...)
Read the rest of A Really Bad Plan for Reviving the Housing Market

Yellow Flag Out for Stock and Gold Bulls

Rick Ackerman — Wed, 25 Jan 2012 02:00:48 +0000

We’re not keen on market alerts, dear readers, because you probably have far too many of them to sift through already, each with a different and sometimes deliberately outrageous point of view. Even so, we should like to caution you that recent, coincident tops in Comex Gold and the S&P 500 are best not ignored. Although we remain bullish on both of these vehicles, you can infer that the yellow flag is out. This means that bullion and the broad indexes will be receiving more scrutiny than usual in the days and weeks ahead, so that Rick’s Picks subscribers will be better prepared to dodge the avalanche that is increasingly a possibility. Our specific predictions, disseminated to subscribers in the form of daily “Trading Touts,” had called for a shortable top at 1316.75 in the E-Mini S&P, and at 1681.50 in Comex March Gold. In the actual event, the recent high in Gold occurred at 1681.80, three ticks from our target; and in the E-Mini at 1318.25, six ticks from our target. (...)
Read the rest of Yellow Flag Out for Stock and Gold Bulls