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August 12, 2018 | Stocks Due for a Nasty Reality Check

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Expect securities markets to bend toward increasingly menacing realities in the weeks ahead. The crazed spectacle of the FAANG stocks in particular ratcheting moonward as geopolitical events threaten to spin out of control has become too unsettling to last for even another day.  It’s one thing for shares to climb a wall of worry, but quite another for them to act as though the wall did not even exist.

A couple of months ago we could dismiss tariff threats as just Trump playing poker with our trading partners. Who knew the leader of the free world was going to go “all-in” every hand? And now he’s escalated a dispute with Turkey, causing the lira to collapse.  This has increased systemic risk in the global financial system simply because the players themselves think it has. And yet, until Thursday, the wack-jobs on Wall Street maintained their focus on corporate earnings, blithely ignoring the headlines in order to ballyhoo every instance where companies beat the estimates of the Street’s best and brightest pencil pushers. Investors’ perspective and priorities are about to change dramatically, and not because Turkey and China have come around.

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August 12th, 2018

Posted In: Rick's Picks

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