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October 18, 2018 | Falling Stocks Reflect a Darkening Reality

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.

Stocks fell hard Thursday, supposedly because of  growing US-Saudi tensions over the gruesome murder of  Jamal Khashoggi, a journalist who has been tough on the monarchy and easy on the Muslim Brotherhood. If such tensions did in fact push stocks lower, as a headline in the Wall Street Journal tried to suggest, then why didn’t oil prices rise? After all, the Saudis, pressed to admit the murder was officially sanctioned, have told inquisitors to back off — either that, or risk a curtailment of crude supplies that would push prices into the danger zone in a world dependent on cheap oil.

For better or worse, it is not tensions over the murder that have been worrying investors, but rather the upward skew of interest rates. This development has reached a menacing threshold where a global economy as dangerously dependent on cheap credit as it is on cheap energy could start to falter. Economic growth in Europe and Asia has already slowed significantly, although not yet appreciably in the U.S., where bull-market mania evinced nary a hint of concern until very recently.

Gird for a Fearsome Friday

Expect those concerns to snowball on Friday as traders wrap up another week by further discounting a darkening reality. The erstwhile Masters of the Universe couldn’t bring stocks back even a third of the way Thursday after selling the Dow down 470 points. My hunch is that DaBoyz will apply a feather-light touch in the wee hours Friday, distributing what little stock they can to widows and pensioners; then, following a flurry of short-covering on the opening, they will pull the plug. Whatever the case, you can follow along in real time, with running commentary and the front-row vantage point afforded by the Rick’s Picks chat room. Click here for a free trial that will give you all the privileges of paying subscribers for two weeks.

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October 18th, 2018

Posted In: Rick's Picks

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