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The Morning Line

There’s Nothing to See Here, Folks, Just Move Along….

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U.S. stocks executed a shallow swan-dive around mid-session on Thursday, spooked by news that a bunch of hedge funds had withdrawn spare collateral parked with Deutsche Bank. (See tout at bottom of this page.) Predictably, the pundits downplayed Deutsche’s problems, including a $14 billion shakedown by U.S. regulators to settle mortgage claims from the Great Financial Crisis. With unintentional, heavy-handed irony, Bloomberg.com calmly noted that “the situation doesn’t appear to be that dire for Deutsche Bank at the moment. But it’s clear the lender’s problems are escalating rapidly.”  Did your scalp tighten, or your heart palpitate, when you read that sentence? None of us will have forgotten that “the situation” didn’t appear to be “that dire” for Lehman or Bear Stearns either — up until mere days before each went down like the USS Thresher.

So much for the theory that the problems of some little bank could conceivably be the black swan that topples the global financial system — for the second time in a decade. This particular bank is as symbolically important to perceptions of Germany’s financial stability as B of A is to America’s.  Bloomberg’s reassurances aside, and notwithstanding the fact that U.S. stocks ended the session with a moderate bounce, an investor would have to be completely out of his mind to be fully loaded with shares at these levels — just inches from all-time highs, with no respite in sight for a decline in U.S. corporate earnings that is about to enter its sixth straight quarter. To repeat: OUT OF HIS MIND!

Rick's Picks for Saturday
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Touts

$GCZ16 – December Gold (Last:1326.80)

EST

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$SPY – S&P (Equity) (Last:216.25)

EST

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$AMZN – Amazon (Last:829.04)

EST

amzns-rally-is-powerful-enoughI have bullish targets outstanding to as high as 871.11, but most immediately the stock will be bound for 833.90 if it can close for a second consecutive day above the red line. This projection is worthy of your attention because, as I noted here earlier, it is unlikely the stock market as a whole will be going down any time soon as long as Amazon, a key bellwether stock, is headed significantly higher. A pullback to p could conceivably set up a mechanical ‘buy’, stop 809.40, but only if the stock returns to p after having moved decisively above it, and stayed above it, for at least three consecutive days. This is a Hidden Pivot-based ‘mechanical’ trade, and I’d suggest tuning to the chat room in real time for guidance if the opportunity should ripen._______ UPDATE (Sep 29, 12:23 a.m. ET): Trade-desk lunatics and panic-stricken bears have inadvertently joined forces, pushing the stock toward my 833.90 target with meteoric force. The move has been tradable only at night, since most of AMZN’s upward progress has occurred via gap-up openings on nearly each and every day when the stock has moved higher.  If 833.90 unexpectedly gives way easily, there is a coincident hidden resistance at 834.02 that is derived from these coordinates on the hourly chart: A=771.00 (9/19); B= 807.75 (9/23); C=797.27.  The double target will act as a magnet until AMZN get there, then as a likely rally-stopper._______ UPDATE (8:11 p.m.): The stock reversed sharply, giving up nearly all of a $9 gain achieved on the opening bar.  This is bearish on its face, but because the intraday high occurred above a crystal clear Hidden Pivot target at 834.02, we shouldn’t eulogize AMZN quite yet. In any event, we’ll watch from the sidelines today — specifically, for minor, downtrending abc patterns that exceed their d targets. That would be warning of a possible major reversal from Thursday’s top.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$SIZ16 – December Silver (Last:19.140)

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$+SNIPF – Snipp Interactive (Last:0.1230)

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glimmer-of-hope-for-snipfWith last week’s rally, SNIPF looks like it is trying to cheat death, technically speaking. The pattern shown offers a very compelling bear-market target at exactly 0.0764.  And yet, the stock rallied sharply last week on word than a big customer had re-upped with a $1.5 million advertising campaign. It didn’t hurt that Canaccord, which has been on the sell side all the way down, has evidently become a buyer — of 2.48 million shares, according to an officer of the company, Gary Singh. All things considered, however, I’m inclined to sit tight with the shares I currently own, and to augment the position only if SNIPF dips below 8 cents.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$+TLT – Lehman Bond ETF (Last:137.10)

EST

tlt-which-tracks-t-bond-yieldsI’m tracking a 500-share, long-term position with a cost basis that has been reduced by profit-taking to 128.02. Pivoteers who follow this vehicle may have noticed the recent dip to a midpoint support at 133.44 on the long-term chart (see inset). In theory, according to the proprietary trading rules we follow, this made TLT a ‘mechanical’ buy at the red line, stop 127.25. Because I missed signaling the trade, however, we’ll have to wait for another entry opportunity. There will likely be plenty of time for this, since the theoretical mechanical fill at 133.44 implicitly re-acknowledged a longstanding bull-market target at 151.99. That’s sufficient reason to give us a bullish bias for any trades we initiate going forward — presumably with far less risk than the ‘mechanical’ entry tactic noted above. Our goal would be to augment our existing position. If the 151.99 Hidden Pivot target is achieved, it would correspond to a yield on the long bond of about 1.50%. It is currently yielding around 2.33%, and we can only surmise that so significant a drop would be concurrent with the U.S. economy’s slide into very deep recession.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$GDX – Gold Miners ETF (Last:26.91)

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USZ16 – Dec T-Bond (Last:165^14)

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$TYX.X – 30-Year T-Bond Rate (Last:2.138)

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30-Year Bond Rate points much lowerSince early 2014, when 30-year T-Bonds were yielding close to 4%, Rick’s Picks has been confidently predicting rates would ultimately fall to at least 1.64%.  The technical basis for this forecast is shown in the accompanying chart (see inset). It went sharply against a consensus that includes nearly every economist, bankster and pundit who has been quoted on the subject. It has also flouted the publicly stated opinions of such heavyweights as Bill Gross, Paul Krugman, George Soros and some Federal Reserve governors.  Through it all, only someone with a deflationist perspective could have seen the relentless decline in rates that was yet to come. We doubt the inflationists will have learned much, however, since they still seem to be expecting long-term rates to reverse and start moving sharply higher “any day now.”  There are some exceptions, but even the few who disagree say rates are likely to “stay low” for a while, rather than continue to fall as we expect.

It’s easy to see why they have clung to this idea, since long-term rates have already fallen from a high of 15% in 1981 to a recent, record low of around 2.13%.  Simple arithmetic says that they cannot fall much farther. However, from an investment standpoint, because bond prices vary inversely with yields, and because long-term bonds are very leveraged to small changes in long-term rates, there remains substantial capital gains potential if the 30-year should hit 1.64%. We have made this point before many times — not only in Rick’s Picks, but in interviews available online with BBC’s Max Keiser, Kenneth Ameduri at CrushTheStreet, USA Watchdog’s Greg HunterThe Korelin Economic ReportBenzinga.com,  Urban Survival Network and Howe Street, to name a few.

From a technical standpoint based on the chart pattern shown,  the steep decline over the last two weeks has made the 1.639% target even more likely to be achieved. Moreover, because 2015’s powerful but relatively fleeting bounce in rates began almost precisely from the pink line, a ‘secondary Hidden Pivot’ support at 2.223%, odds are strong not only that 1.639% will represent an important bottom, but that the bottom will be precise.  With this week’s decisive breach of the 2.223%, the formerly supportive pivot has become resistance, implying it can be shorted ‘mechanically’ using our proprietary rules governing this type of entry. The opportunity would be at least a few weeks off, but as always, you can tune to the chat room for further guidance in real time. One final note: There is an additional downside target derived from pattern of even larger degree that suggests a bounce could also come from 1.683%. If this were to happen it would imply a possible final low at 0.624% (!) that would challenge even the hard-core deflationist to imagine what kind of economic disaster might accompany it.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$DB – Deutsche Bank (Last:12.75)

EST

Deutsche looks likeHard times have once again befallen Deutsche Bank, which played a key role in blowing the global mortgage bubble that popped eight years ago.  On Wednesday, the bank announced a $7 billion loss for Q3 and a dividend cut, sending shares plummeting by 6% on the NYSE.  The long-term chart (see inset) suggests the stock is likely to fall a further 68%, to at least 9.10, before the carnage ends. If that price is hit, it would represent a 94% decline from the record-high 158 recorded in 2007.

From a technical standpoint, using our proprietary Hidden Pivot Method, the stock tripped a ‘mechanical’ short to 9.10 in March at 34.38, stop 42.81.  Traders who are familiar with our forecasting system will notice in the chart that the target for Deutsche Bank’s bear market is minus $16.18.  Although this is a practical impossibility, we know from experience that it could imply that a bankruptcy lies down the road. That proved to be the case for Lehman Brothers and Bear Stearns, whose charts similarly projected into negative territory prior to the Great Financial Crash of 2007-08.  Even if DB does not go to zero, we would rate the chances of a fall to at least 9.10 at around 70%._______ UPDATE (September 26, 9:28 a.m.) There’s chatter in the chat room this morning about Deutsche Bank, whose shares have been plumbing record lows recently. It was nearly a year ago, with the stock trading just below $30, that I projected in the tout above that the stock would fall to at least 9.10. That target still holds.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.


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The consistent accuracy of Rick Ackerman’s forecasts is well known in the trading world, where his Hidden Pivot Method has achieved cult status. Rick’s proprietary trading/forecasting system is easy to learn, probably because he majored in English, not rocket science. Just one simple but powerful trick -- managing the risk of an ongoing trade with stop-losses based on ‘impulse legs’ – can be grasped in three minutes and put to profitable use immediately. Quite a few of his students will tell you that using ‘impulsive stops’ has paid for the course many times over.

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