ARCHIVED COMMENTARY
Who'll Be Next
Professor Fisher?
For edition of September 21, 2006
Let the Dow Industrial Average get within a hundred points of new record highs, as it did yesterday, and America’s economic troubles seem to melt like lemon drops. “I think this market action is telling us that the economy may be past its worst point,” Wells Capital’s James Paulsen told the Wall Street Journal, evidently inspired by yesterday’s 72-point gain in the blue chip average. Paulsen will have to ratchet up the hubris if he wants to be a contender for the Professor Irving Fisher Award. Fisher, you may recall, was the economist who was immortalized after saying, just a few days before the 1929 Crash, that stocks had “reached what looks like a permanently high plateau.”
(Click to enlarge)
Maybe we shouldn’t be so hard on Paulsen, since a glance at the chart above more or less confirms that the Dow Average has indeed been on a plateau for a long, long time, even if not quite permanently. Ignore the anomalous post-9/11 dip and the Indoos have spent nearly all of the last eight years cruising at heights that would not have been believed before the tech boom radicalized investors’ imaginations in the late 1990s.
But does this really mean the worst is behind us, economically speaking? We think not, for reasons that have been piling up recently like crumpled vehicles in an I-70 fog. The most alarming of them is of course the housing bust, which, Paulsen’s optimism aside, is all but certain to intensify in the coming months. Even so, we are willing to suspend disbelief until the Dow reaches 13045, the very bullish target broached here just a couple of days ago. Coldly objective chartists that we are, we have no qualms whatsoever about joining the bullish lunatic fringe, if only for another couple of months. The stock market has quite obviously de-coupled from reality, perhaps because there is too much funny money in play globally to allow it to discount recession in the normal way. Soon or later, though, gravity is going to prevail. Until then, we await more irony-charged words to entertain us from the next Prof. Fisher.
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Seminar FAQ?
Registration forms for the October 28-29 Hidden Pivot seminar at the Fairmont Waterfront in Vancouver went out last week to those who earlier had said they plan to attend. Click here to receive the form if you were not on the list. If you are wavering, here is some possibly useful information that was elicited by the following query:
“I received the email with the registration form this weekend. I am seriously considering attending the weekend in San Fran and would like to ask a few questions which should help me make my decision easier.
“I have studied technical analysis and traded for a short while using various parameters to determine which stocks to trade and when. I have also studied options trading and traded options for a short while. My account was never funded at a high enough level to really do this full time and I then found an opportunity to work in the giant online gaming industry.
“That brings us back to this:
“What level of knowledge should I possess to be able to understand and learn the things you will be teaching? “
There are no prerequisites. The method I teach is unlike any other, and the concepts are more visual than mathematical. It is fundamentally simple, since price action is the only variable considered.
“Do you provide enough information and training that I can come back home and immediately begin applying the concepts and techniques in my direct access account?”
Yes, you will come home from the seminar with enough knowledge to try some easy trades. However, before students put more than mere pocket change on the line, I strongly urge them to solidify their learning, and to build their confidence, by visiting the free chat room that has been set up mainly for their benefit.
Just four months after the seminar, some of my grads are nearly as good as I am at identifying Hidden Pivot swing points. My goal is nothing less than to make every student as proficient at forecasting as top pros who do it for a living. With just a couple of months of free mentoring, I can promise you that you will never need to ask some “expert” what he thinks about this stock or that, or about “the market”.
“Will I need other subscriptions and paid access to various other services to put this knowledge to use? (I will gladly subscribe to your newsletter bulletin, but some programs require other subscriptions after they have collected the seminar fees with no mention of this before the conference. I do not mind additional monthly charges but they should make sense and not be there for the primary sake of creating an ongoing revenue stream without any real benefit to the subscriber!)”
Though not required, a Rick’s Picks subscription will give you access to the chat room; it should prove sufficiently useful to pay for itself. I encourage you to subscribe and warrant that you will find it well worth the price.
“What is the recommended minimum amount to have in my direct access account to trade using your Hidden Pivot method?”
Trading relatively cheap options in lots of four, $5,000 should be more than enough. I currently keep about $25,000 in my direct access account, since this allows me to hedge trades with stock, and to sell puts and calls naked-short. However, most of the trades I recommend, and most of the ones that I do myself, are relatively simple and involve buying stock, puts or calls, not naked-shorting.
“Are there any books that you recommend reading before attending the seminar?”
The 110-page classroom manual you will receive is complete in itself and adequate for self-teaching. For a good option primer, try Options Demystified by my friend Tom McCafferty.
“Anything else you would like to mention about the material covered during the weekend?”
You will not find an easier forecasting system that works as well as this one.
“Sorry for the long email – I am very serious about making a decision to fly down to San Fran so your thoughts are greatly appreciated.”
No trouble at all. I hope the information I’ve provided is helpful to you.
