Dow Industrial Average

The Indoos dove more than 300 points last week after topping at the precise intersection of a well advertised trendline and an important Hidden Pivot target. The two obstacles together represented the most formidable technical challenge bulls have faced in more than a year. Ordinarily we might expect a correction lasting at least four to six weeks. But these days, four to six days of weakness seems more likely, given the relentless enthusiasm of buyers and the very narrow list of stocks on which they have trained their buying power. So where to next?  I'd suggest using a 30299 target for now. It comes from the weekly chart and is the secondary (p2) Hidden Pivot of a rally pattern begun from A=15,503 in February of 2016. _______ UPDATE (Jan 7, 10:10 p.m.): Before tonight's selloff I'd assumed last Thursday's slight penetration of a very strong trendline was bullish. I still think so, albeit with somewhat reduced confidence. The trendline itself is as clear and compelling as they come, and that's why I think the pop above it holds bullish implications. Here's a chart that shows it. _______ UPDATE (Jan 8, 9:34 p.m.): The Indoos popped above the trendline again before settling about 80 points below it. If they can close for two straight days above the line, look for more upside to at least 29,299. That Hidden Pivot comes from the following coordinates on the daily chart: A=27,801 (12/11); B=28701 (12/27). Please note as well that p2=29,059 could offer resistance that would potentially be tradable. ______ UPDATE (Jan 13, 5:40 p.m.): Remember that scene in Mars Attacks! where the U.S. military, having failed to stop the aliens with missiles and cannons, explodes a nuclear device in outer space near their spaceship? An alien sucks the mushroom cloud into his lungs

For more than a decade the bull market has flouted trendlines, Hindenburg Omens, Hidden Pivot resistances, cycles, channel tops and other ostensible rally killers, so there's little reason to think it will not soon overcome the double whammy of some new impediments it encountered on Friday (see inset). We recently discussed the imposing DJIA trendline shown in the chart because it precisely capped three rallies earlier in the year; on Friday it came within a few points of nailing the high of yet another. What I hadn't noticed before is an additional resistance, a 28,738 Hidden Pivot target that fell within a tenth of a percent of Friday's high. Long experience has taught us that bulls are likely to be frolicking above this seemingly crucial technical threshold soon, presumably bound for Dow 30,000. Even so, there are reasons to doubt they will do so before 2019 ends, and that even if they should push the Indoos to new record highs early in 2020, they are unlikely to blithely ignore the unsettling problems of two corporate giants, Boeing and FedEx. Rather than get worked up about the possibility of a major top, we'll simply adopt a cautious, if not to say mildly bearish, trading bias for the remainder of the year. In practice this will entail monitoring minor, downtrending abc patterns for signs of waxing strength. If they should start exceeding their 'd' targets, that would mean the dominant trend -- a.k.a. the bull market -- is weakening or worse. ______ UPDATE (Dec 30, 5:15 p.m.): A good start!  Bears were understandably skittish about going on the attack for a rare change, but they did manage to push the Dow down by 183 points. Interest in the markets is next to nil at the moment, especially in the chat room, so

Friday's modest leap narrowly missed our still-interesting trendline, which came in at around 28,661.  Because it is rising with a slope of about 12 points per day, we should look for resistance on Monday at 28,673, moving up to 28,721 by week's end. If and when it is hit, plan on buying some cheap DIA puts with about two weeks left on them. Be ready to jump on it if this happens on the opening bar. Otherwise, I'd suggest waiting till the close for a better deal. It will always be highly speculative to bet against a bull market that has been chugging  along for more than a decade, so don't overdo it. This is just to have a horse in the race. ______ UPDATE (Dec 23, 6:05 p.m.): The trendline comes in Tuesday at around 28,705, as near as I can make it.  My gut feeling is that the Indoos will get within 10-15 points of this 'hidden resistance' before feeling its downforce. If you are keen on getting short, the instruction above still applies. ______ 'UPDATE (Dec 26, 12:30 a.m.): For Thursday, I estimate the trendline will be at 28,712. The trading guidance given above remains viable. Last week's 28,608 high got close enough to the line that we should be open to the possibility that the anticipated top has already occurred. _______ UPDATE (Dec 26, 5:14 p.m.):  Use 28,721 for Friday. If it's hit, don't be surprised if this occurs four seconds before the closing bell. Buy a few puts anyway -- what could possibly could go wrong over the weekend?

Okay, so I couldn't help myself. Just when you thought I'd run out of bull-market targets, here is yet another -- and it's not even based on the Hidden Pivot Method. Still, the trendline looks very appealing, and besides, it'll give us something to shoot at as the lotus eaters force stocks higher into year's end. The trendline comes in at around 28,692 on Christmas Eve, and that seems as logical a place as any to look for a potentially tradeable top. We'll attempt to buy some cheap DIA put options if and when the Indoos get there, so stay tuned. More immediately, a caveat: The stock market has felt heavier than usual these last two days, and buyers will have to pick up the pace to avoid doing a Lomcovák. without having achieved the target. _______ UPDATE (Dec 19, 6:01 p.m. EST): The pace quickened with a moderate rally, but this was not sufficient to trigger a short-squeeze.  The week has put most traders in a coma, so don't be surprised if Friday shocks us by being interesting.

The Indoos have come down hard after rallying to within an inch of an important Hidden Pivot rally target at 28,463 three weeks ago.  There were two targets above it, but they should be put aside for now, until the correction -- assuming that's what it is -- has run its course. Elsewhere on the page, in The Morning Line, I've implied that the selloff could be the beginning of the end for the ten-year-old bull market. That is my gut feeling, but I will continue as always to let the charts speak for themselves.  For now, we'll need to see a rally and then a second leg down before we can draw useful conclusions about the health of the bull market.  A 0.618 correction of the massive rally leg begun in early June would bring the Dow down to 25,719. _______ UPDATE (Aug 5, 9:08 p.m.): Don't look now, but today's nasty plunge triggered a nice-looking 'mechanical' buy at 25,694, stop 24,680. You can spectate if you'd like, and that is what I am recommending. But if you interpolate the trade with real money using, say, DIA calls, be aware that the nominal theoretical risk for the cash index is a whopping 1038 points. A 'camouflage' set-up could provide a much cheaper way to get aboard, but you're on your own if that is the path you choose. _______ UPDATE (Aug 6, 9:52 p.m.): The mechanical trade worked exactly as it is supposed to work, getting us long at a time and price when most traders would have been frozen with fear. The position showed a theoretical profit of $1885 per contract at the intraday high and a current gain  of around $1500. No subscribers reported doing the trade, nor did I explicitly recommend it, so I am not

The bull market has been chugging along for more than ten years, so there's little point in pretending we can know precisely where or when it will end. However, neither should we ignore the fact that the Dow, having traded as high as 27,399, is mere millimeters from a key 'Hidden Pivot' resistance at 27,463.  As a practical matter, because this is a logical place for a top of at least middling importance to form, we can lay in a small put position just to have a horse in the race.  Tune to the Rick's Picks Trading Room for more-detailed guidance in the week ahead. We'll be looking to buy a small quantity of put options with 3-4 weeks left on them and which sell for 0.80 or less. Use 274.42 for a target in DIA, since it is closely equivalent to the one at 27,463 given above. _______ UPDATE (Jul 24, 7:47 pm.): Nibbling on some puts. Check my 19:42 Wednesday post in the chat room for details. _______ UPDATE (Jul 30, 10:25 p.m.): The DIA 23 Aug 255 puts I suggested buying at prices down to 0.35 have since traded no lower than 0.42.  Please let me know in the chat room how you've fared. ______ UPDATE (Jul 31, 9:48 p.m.): Only one subscriber reported doing the trade, so I am not establishing a tracking position. For the record, with stocks falling hard today, he said he exited half of his puts for twice what he'd paid. This means he now owns 50% of the original position at no cost. Today's plunge should continue down to at least 26,755, but if that midpoint support is busted, a 'D' target at 26,504 would be in play (15-min, a=27,220 on July 31 at 1:45 pm.m EDT). _______ UPDATE (Aug 1,

Here are three numbers to jot down to get an accurate and potentially useful 'read' on the aging bull market: 27,436, 28,738 and 33,161. These are 'Hidden Pivot' resistance targets for the Dow Industrials, and any one of them could stop the bull in its tracks. Each is a good place to attempt getting short with a tight stop-loss, but if the stop gets pulped, assume that the next-higher target is in play.  And if the Indoos should hit 29,000 (or so) and then plummet to the green line (24,5740), treat that not as a sign that the long-awaited bear has finally arrived, but as a great buying opportunity. Above 33,161, I have no additional targets to offer. That would be the bull's final charge, as far as I'm concerned, and the best opportunity to get short that we might see in a very long while. Why should you trust these numbers? For one, if you've followed Rick's Picks for any length of time, you'll know that the big-picture forecasts -- for T-Bonds, gold, the U.S. dollar, interest rates,  inflation (or lack of, actually)  and major stock averages -- have gotten it mostly right.  (But not always, as those of you still waiting for crude to hit $28 a barrel would be ready to attest.)  Another reason is that these sunny numbers come not from a hopped up permabull who thinks that decade-old rally will go on forever; rather, they are from someone who could give you a dozen good reasons why the Dow should be trading at 10,000 now, not heading toward 30,000 as would appear to be the case. _______ UPDATE (Jul 16, 8:30 p.m.): Tuesday's high came within an inch of our longstanding target at 27,436, the first of three important stair-step Hidden Pivots. Let's see how

The Indoos tripped a 'mechanical' buy signal last week that I neglected to mention. We can use it nonetheless to inform a bullish bias in the weeks ahead, as the blue chip average makes its way toward the 27,125 target.  If you did the trade on your own, you should have taken a partial profit Monday on half the position at p=26,594. A further 25% should be taken off at p2=26,860, and thence 27,125 for the remainder.  The corresponding HP levels for DIA lie, respectively, at x=263.27, p=265.96, p2=268.63, and D=271.32. _______ UPDATE (May 7, 10:07 p.m. ET): The upturn at day's end has continued into the evening, but the salvage attempt appears doomed because the intraday low breached a clear Hidden Pivot. This has negated the 27,125 target given above, but a rally touching 26107 would generate a new one at 27060. _______ UPDATE (May 8, 9:01 p.m.): Today's rally slightly exceeded  26,107, generating a new bullish target, but the move was too feeble to be even the least bit impressive. Get ready for a relapse.

The Dow Industrials look primed for a 900-point rally, assuming they can close for two consecutive days above Friday's high. It occurred slightly beneath a 26,656 Hidden Pivot resistance that's a good bet to show stopping power. However, anything above it would bring a new pivot resistance at 27,463 into focus. That's exactly 904 points above, and it would become all but certain to be achieved if the lower number is breached decisively. Longer-term, the chart shows that the Indoos could ascend to as high as 33,213 -- 6654 points, or 25%, higher -- if the bullish rampage begun in January continues into 2020. I am confident that the Hidden Pivot levels on the chart can tell us exactly how much power is pushing the aging bull market. Although the chart shows a long-term trend, it can be read exactly as we might an hourly chart. The same rules apply, and any conclusions we might draw thereof can be assumed as reliable as those we derive from the lesser charts. Indeed, the interchangeability of time frames is a crucial aspect of the Hidden Pivot Method. In this case the chart speaks so clearly that there is little room to doubt their conclusiveness. _______ UPDATE (Apr 25, 9:17 p.m. ET): The 26,656 pivot noted above has given way, although not by much. Now, if the next run-up can close for two consecutive days above the so-far high at 26,696, I'd infer the Indoos are on their way up to at least D=26,974, or 27,125 if any higher. FYI, a 'mechanical' buy missed triggering today by a hair, but I'll track it anyway -- from x=26,329. Here's the chart.