The chart below shows the Industrial Average working on a bullish flag. This is accumulation, plain as can be, and it suggests the stock market is looking for a reason, any reason, to grab shorts by the balls and squeeze them for a quick 200-400 points. Search brokerage houses from Maine to San Diego and you wouldn't find a single investor with a compelling reason to buy stocks at these levels. But neither would you find any bears eager to get short, given the strafing they took last Friday when the Fed announced a surprise cut in the discount rate. Between the two camps, bulls with nothing whatsoever to be bullish about, and bears wary of a Bernanke-instigated Pearl Harbor, you can see why the stock market for the time being has opted for heart-stopping tedium. But make no mistake, unless World War III erupts in the days ahead, the pattern shown in the chart all but guarantees a resolution to the upside. When it comes, and it will, there are two Hidden Pivot targets above that we can use as telltales. Both have been precisely identified in the Touts section of Rick's Picks, with the lower of the two representing our minimum upside projection for the near term. If it is breached by more than a few ticks, however, or if the Indoos settle above it overnight, we should expect the higher target to be reached almost for certain and soon thereafter. We are eager to try shorting at both targets, risking just small change in the process. A tight stop-loss and the use of Diamond options, or possibly the Mini-Dow contract, will allow us to meet the next gratuitous, brainless upthrust with no more anxiety than we might feel upon learning that the pimento filling was missing from
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