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April 8, 2019 | Glue-Sniffing on Wall Street: ‘Small Price to Pay for a Good High’

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.

Considering the dour outlook for Q1 earnings, the stock market’s exuberant run-up over the last month feels like Tennyson’s Charge of the Light Brigade: “Into the valley of Death rode the 600…’  And yet, we know from watching the shares of Boeing, Apple (see chart inset) and Facebook go vertical into a steady stream of negative news concerning each that Wall Street’s ‘600’ really don’t give a damn about the news, or even about ‘fundamentals’.  Earnings are expected to come in around 4.5% lower than a year earlier, and this will be the first quarter in three years with negative earnings growth. Bank-stock profits in particular have come under pressure because of the yield curve’s flatness, and financial shares are therefore likely to be laggards if the broad  averages continue higher on vague emanations of possible Fed easing.  This amounts to glue-sniffing, and although the habit will kill you, or at least your brain, eventually, at the time you are doing it, it probably seems like a small price to pay for a good high.

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April 8th, 2019

Posted In: Rick's Picks

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