Which stocks should we be watching most closely to gauge the health of the economy in the coming months?  A year ago we’d have topped the list with Citigroup, which seemed destined to thrive as long as the Fed was in easing mode. However, a glance at the chart below shows that Citi shares have fallen steeply even as monetary policy has shifted once again toward aggressive stimulus. In theory, as long as the central bank continues to push administered rates down, Citi and other banks should be able to rake in mountains of “free money” by lending short and borrowing long.  In practice, though, the tightening of mortgage lending standards has drastically limited the supply of qualified borrowers, which in turn has caused CDO markets downstream of U.S. real estate to become skittish and tight. Moreover, recent court decisions in the U.S. threaten to turn these markets upside down, since it’s unclear who holds legal title to homes that have been financed, ultimately, via securitized debt.

[Insert Citi chart here]

The big surprise in all of this is that the consumer economy has continued to function more or less normally despite a growing deflationary crisis in the real estate sector. We can only surmise that the phrase “Shop till you drop” has become literally true for America, and that retail sales will not collapse until unemployment surges to recessionary extremes. In the meantime, the stock market continues to act as though just a few companies, most evidently Apple, Google and Research In Motion, are the economy. Although we seriously doubt this illusion can persist for much longer, there is no gainsaying its ability to outlast the hubris that gave it life.

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Your Last Chance!

“While perusing some of your posts chronologically from months back, I'm truly struck by the remarkable prescience of many of your fearless calls. The results are uncannily accurate. Thanks again for this opportunity to profit from your usually directionally correct analyses. The subscription is worth every penny - and then some.”

-- Colin L. MacVeagh, a subscriber

Aloha Rick.  I just want to thank you personally for all of your posts in Comex Gold and Silver.  I have traded gold/silver futures for a decade and there is NO ONE who has identified prices as accurately as you do. FACT:  Your New Year's Eve call of a high at 643.10 call was dead-on (even if floor traders ran it up a few days later to flush the momentum traders.) But your subsequent forecast of a pullback low at 603.00 was mind boggling! I Sold my longs at 643.10 and covered my shorts at  603.00 -- the exact bottom.

   -- Mark Johnson, Hawaiian subscriber

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Want to learn exactly how I do it? Then click here for details concerning the upcoming online Hidden Pivot Seminar on January 5-6 (Saturday/Sunday morning). Sign up now while there are still some seats left. The goal of this course is nothing less than to teach traders and investors of all levels of experience how to forecast stocks and commodities at least as accurately and confidently as those who do it successfully for a living.

With just a cursory understanding of the material taught in the course and a little bit of follow-up, you will never again have to ask an “expert” what he thinks about a particular stock or “the market.” That’s because you will be better equipped yourself to answer the question simply by looking at a few charts.

[Insert Rothko here]

The course is not about technical analysis in the conventional sense, with its tired and overly scrutinized trendlines, its familiar oscillators, channels, volume indicators, and all the rest, Rather, it is a way of looking at charts with a fresh eye – to see charts as “art,” with emphasis on visual elements of harmony, symmetry, and, indeed, beauty. My annotated charts do not look even remotely like those of other technicians, and that is why the “buy” and “sell” signals that come from them rarely coincide with those favored and used by the herd.

Never Again Rely on ‘Experts’

The online class will be a particularly good opportunity for those who were unable to attend my classes last year in New York, Sydney, Vancouver, San Francisco and Denver. If you’ve visited the Rick’s Picks chat room and marveled at the forecasting skill of seminar grads, this course is designed to quickly bring you up to their level. While I cannot guarantee that the course will turn you into a fabulously rich trader,  I can promise, as stated above, that with a little diligence and practice, your ability to precisely predict price reversals in stocks, indexes, options and commodities will be at least as good as anyone whose forecasts you have ever paid for.

Although the on-site course was offered for as much as $2,000, I am offering it online for $960, since many of the expenses incurred in holding “live” seminars – including hotel and travel costs, and the rental of conference facilities -- are not a factor. If you are seriously interested in attending, click here for more information, or go directly to the registration page by clicking here, then clicking the “UPCOMING” tab.