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The Morning Line

Will Hindenburg, Eclipse Turn Out to Be Duds?

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With this week’s solar eclipse and the recent flashing of yet another Hindenburg Omen, traders should probably be braced for Armageddon.  Alas, the stock market has a way of thwarting preparedness by boring to death those who would attempt it. And if millions of traders are indeed ready for the worst at this moment, you can bet that Mr. Market will be on his best behavior.  I’d just about given up on a 10.24 target for VXX, which, if reached, would imply that already brain-dead volatility is about to sink even lower. Perhaps it’s time to dust this target off?

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ESU17 – Sep E-Mini S&P (Last:2453.75)

EST

Subscribers who followed my simple instruction — bid 2416.00 with a five-tick stop-loss — were able to cash out of a $2300 winner on Tuesday, a day after initiating the trade.  The futures came though for us, bouncing 39 points after touching 2414.75, the Hidden Pivot correction target I’d flagged when I put out the trade. Although I’d originally suggested swinging for the fences with the 25% of the position that remained, I opted for a three-bagger instead, since I am not entirely confident that the current rally is immediately bound for new record highs.  Incidentally, some subscribers who bought at the exact low would have been reversing short positions entered on August 8, when the futures topped after hitting an all-time high just 1.00 point from a 2488.50 target I’d flagged earlier. It would appear that the swing highs and lows of this vehicle have been precisely predictable lately, even if the ever-elusive Mother of All Tops has not.

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$AAPL – Apple Computer (Last:157.16)

EST

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$BA – Boeing Co. (Last:235.82)

EST

Boeing accounted for most of the Dow’s gains in July, arousing my curiosity about how high this blowoff could go before bulls get their comeuppance. The weekly chart suggests 257.36 as a logical topping place (see inset) for this incredible bull run, which began in February 2016 from $102. This Hidden Pivot target is unlikely to produce the kind of penny-precise bullseye we’ve become used to working with, but it should serve adequately as a minimum upside target for the near term. If the stock gets there, the move would amount to an 8% gain from these levels. I won’t explicitly suggest shorting at the target, but we should keep it firmly in mind if BA’s ascent continues, since a reversal from there could cap the DJIA’s bull market as well.________ UPDATE (Aug 6, 6:30 p.m.): Boeing’s vertical trajectory suggests we might have success using a ‘mechanical’ bid to get long on a pullback to the red line, a midpoint Hidden Pivot at 215.56. If it happens next week, it will be a no-go, but thereafter, the entry should be attempted and tied to a 201.62 stop-loss. We’ll figure out a way to cut the initial risk when the time comes, but the 257.36 target will remain viable in theory regardless of what kind of correction is about to unfold._______UPDATE Aug 9, 7:14 p.m.): The stock has sold off  hard since peaking on July 31 at 246.49, well shy of my target.  The correction looks bound for at least 230.98 (30-min, a=246.49 on 7/31), a Hidden Pivot support that you can bottom-fish as you please with a tight stop-loss. If the support fails badly, it would imply a move severe correction lies ahead._______ UPDATE (Aug 14, 11:20 a.m.): Surprise surprise. Boeing has taken a giant bounce to a so-far high of 238.88 after bottoming four cents from the 230.98 target flagged above. If you got aboard at the low please let me know in the chat room so that I can determine whether to establish a tracking position.________ UPDATE (Aug 20, 6:05 p.m.): Boeing’s ability to maintain altitude with the broad averages falling is impressive. That it has done so with little apparent effort attests to the fact that those who make their living throwing Other People’s Money at a half-dozen stocks have resolved to hang together on Boeing. In this task they are supported by hubris from analysts and ceaseless cheerleading from the Wall Street Journal, which would have us believe that only blue skies lie ahead for this company over the next hundred years.

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$DJIA – Dow Industrial Average (Last:21703)

EST

The Dow’s intraday low on Thursday came within 0.22 points of the crystal-clear, 21750.54 target shown. I hadn’t noticed this because I don’t track the Industrial Average diligently, but it is surely worthy of our attention. If the Hidden Pivot support were to get trashed on Friday or next week, it would be the first time that an ostensible correction pattern of daily-chart degree had exceeded its ‘d’ target since May 2016. The bull market survived that one, but the Indoos were not in nosebleed territory at the time.  They’ve got much farther to fall now, as you can see in this chart. The roll-down from way on high looks ominous, wouldn’t you say? ________ UPDATE (Aug 21, 11:45 p.m.): A strong rally wouldn’t undo the damage done by Friday’s decisive downside penetration of the 21750 target flagged above. The Indoos fared even worse on Monday, with a 21600 low on the opening bar (click here for a chart)  that exceeded my bearish threshold by 150 points. The short squeeze that followed doesn’t look like it will get very far, since DaBoyz have failed for two consecutive days to extract much leverage from brazen shakedowns on the respective opening bars.  This is the clearest bear-market action we’ve seen in the Indoos in many years. Generally speaking, corrective abcd patterns are not supposed to achieve, let alone exceed, their d targets in bull markets, but it has finally happened here. As a result. we should start taking technical signs of weakness more seriously than before.

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$GCZ17 – December Gold (Last:1289.50)

EST

Gold’s tedious shenanigans should not cause us to take our eyes off the little sonofabitch for too long, since we might miss something interesting. Like now, for instance. The December contact has mildly caught fire and is making another run at 1301.20, a very important midpoint Hidden Pivot resistance that has stopped promising rallies three times since April, including one earlier this week. This is a very crucial obstacle, since once decisively above it the December contract would be no worse than an even-odds bet to reach 1462.70. How decisively?  Two consecutive weekly closes above the pivot would do the trick, or alternatively an intraday thrust exceeding 1325.00 or so. The chart (see inset) shows the whole picture, including the 1301.20 midpoint pivot that I have revised slightly upward from an earlier 1300.70.

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$AMZN – Amazon (Last:952.96)

EST

With respect to the health of the bull market, it is crucial that AMZN not start overshooting its correction targets, even minor ones.  Today’s chart shows the stock an inch shy of that threshold. The 949.79 target, a Hidden Pivot support, slightly alters the one given here previously. In visual terms, although the support was slightly exceeded by Friday’s downtrend, the overshoot was within permissible bounds. But if it should be decisively exceeded Sunday night or Monday morning — a strong possibility if the crisis with North Korea escalates — that would hold potentially bearish implications for the stock market going forward.  We’ll wait to see what the day brings, but please note that it would take a move above the point ‘c’ high of the pattern, 1031.99, to lift AMZN tenuously from the danger zone._____ UPDATE (Aug 15, 6:14 p.m.): After falling to within an inch of the 949.79 target flagged above, AMZN has rallied $40. It’s still not out of the woods, however, and there is nothing in the hourly chart to suggest the stock is about to blast off for new all-time highs above July 27’s record 1083.31. More immediately, bulls would need to push past the 1006.40 peak that I’ve labeled to suggest they’re capable of this. _______ UPDATE (Aug 18, 1:55 a.m.): If the stock finds no support at 951.01, it could fall all the way to 910.27 before getting traction. Here’s the relevant chart, with a correction pattern that uses some parts of an older one. _______ UPDATE (Aug 22, 12:07 a.m.): Monday’s weakness shortened the odds of a further fall to 910.27Click here for updated chart.________UPDATE (Aug 22, 6:18 p.m.): Tuesday’s downside penetration of a midpoint HP support at 951.01 turns out not to have been decisive enough to make further slippage to 910.27 a done deal. Even so, a print up at 971.37 would be a ‘mechanical’ short in theory, stop 991.75.  Use camouflage to set up the trade, though, since the implied entry risk would be about $1000 per round lot.

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$+TLT – Lehman Bond ETF (Last:123.33)

EST

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Tuesday, August 1, 2017

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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