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The Morning Line

‘The Crock of Gold’ — a Magical Tale for Young and Old

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Have anything beautiful you would like to share with Rick’s Picks readers?  Send me a link that I use and you could win a free month’s subscription to the newsletter, including 24/7 access to one of the trading world’s friendliest chat rooms.  Meanwhile, in the complete absence of any market activity worthy of note, here’s something I would like to share with you today.  It is an excerpt from The Crock of Gold, a wondrous work of Irish wit and transcendent poetry from James Stephens.  There is no other book remotely like it in the English language.

As described by a reviewer at Amazon, “the story begins with two philosophers who are married to two women (spitefully). The wise advice of the philosopher earns him the enmity of Leprechauns, when the crock of gold is stolen. Satiric and yet generally light you will love this inventive book.

“Many very modern challenges to the human spirit are presented extremely well, The old thief’s tale is poignant and sad.

“Some analysis of the deeper meanings in this book are in short, a distaste for the modern era; modern ennui and angst; the limits of philosophy; an indictment of justice systems; and attacks on the loss of the Irish heritage to western fables; the value of beauty and art; the meaning of wisdom; the nature of man and woman; and the meaning of love.

The story begins…

In due process of time two children were born of these marriages. They were born on the same day and in the same hour, and they were only different in this, that one of them was a boy and the other one was a girl. Nobody was able to tell how this had happened, and, for the first time in their lives, the Philosophers were forced to admire an event which they had been unable to prognosticate; but having proved by many different methods that the children were really children, that what must be must be, that a fact cannot be controverted, and that what has happened once may happen twice, they described the occurrence as extraordinary but not unnatural, and submitted peacefully to a Providence even wiser than they were.

The Philosopher who had the boy was very pleased because, he said, there were too many women in the world, and the Philosopher who had the girl was very pleased also because, he said, you cannot have too much of a good thing: the Grey Woman and the Thin Woman, however, were not in the least softened by maternity-they said that they had not bargained for it, that the children were gotten under false presences, that they were respectable married women, and that, as a protest against their wrongs, they would not cook any more food for the Philosophers. This was pleasant news for their husbands, who disliked the women’s cooking very much, but they did not say so, for the women would certainly have insisted on their rights to cook had they imagined their husbands disliked the results: therefore, the Philosophers besought their wives every day to cook one of their lovely dinners again, and this the women always refused to do.

They all lived together in a small house in the very centre of a dark pine wood. Into this place the sun never shone because the shade was too deep, and no wind ever came there either, because the boughs were too thick, so that it was the most solitary and quiet place in the world, and the Philosophers were able to hear each other thinking all day long, or making speeches to each other, and these were the pleasantest sounds they knew of. To them there were only two kinds of sounds anywhere–these were conversation and noise: they liked the first very much indeed, but they spoke of the second with stern disapproval, and, even when it was made by a bird, a breeze, or a shower of rain, they grew angry and demanded that it should be abolished. Their wives seldom spoke at all and yet they were never silent: they communicated with each other by a kind of physical telegraphy which they had learned among the Shee-they cracked their finger-joints quickly or slowly and so were able to communicate with each other over immense distances, for by dint of long practice they could make great explosive sounds which were nearly like thunder, and gentler sounds like the tapping of grey ashes on a hearthstone. The Thin Woman hated her own child, but she loved the Grey Woman’s baby, and the Grey Woman loved the Thin Woman’s infant but could not abide her own. A compromise may put an end to the most perplexing of situations, and, consequently, the two women swapped children, and at once became the most tender and amiable mothers imaginable, and the families were able to live together in a more perfect amity than could be found anywhere else.”

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CLM18 – June Crude (Last:72.13)

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$ESM18 – June E-Mini S&P (Last:2729.00)

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There is little point in getting all worked up about technical subtleties at the moment, since the very simple key to the chart shown lies in bulls’ conspicuous failure to surpass the 2744.25 peak after three weeks of trying. Even if they are able to get past it in the week(s) ahead, that would not mitigate the obvious weakness they have displayed so far. Presumably, their ability to make headway after doing so would be very limited — almost certainly falling shy of new record highs.  Bears are wholly enfeebled as well, so get ready for a potentially long, boring stretch that will satisfy no one. If, in a year, the broad averages are trading about where they are now, don’t be surprised. _______UPDATE (May 21, 5:39 p.m.): A day of huffing and puffing failed to lift the futures above the key peak noted above. DaBoyz may succeed at this in the days ahead, but don’t be impressed with their bluff unless bears lose their cool. Short-covering is what pushes markets through ALL significant resistance, and it can never be ruled out entirely. _________ UPDATE (May 22, 6:43 p.m.): A mildly bearish day changed nothing in the outlook given above. _____UPDATE (May 23, 7:42 p.m.): Zzzzzzzzzz.  Zzzzzzzzzzz.  Zzzzzzzzzzzzzzzzzzz.  Zzzzzzzzzzzz.

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

GCM18 – June Gold (Last:1311.30)

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Is gold headed below $1000?  I doubt it. Like every other bullion investor who has tired of watching gold’s price meander sideways for nearly six years, I’ve grown increasingly disappointed and frustrated. But also concerned, as many apparently are, that one last, hellish plunge may be necessary to shake out the weak hands. However, looking at the long-term chart, I’m persuaded that bulls still have the edge, if not a big one. That’s because the ‘impulsive’ leap gold took between October 2008 and August 2011 was so powerful, pushing the price of an ounce from $680 to $1912. Although the subsequent retracement took 70% of it back with the $1046 low that occurred in December 2015, bears have been challenged ever since to win the skirmishes that prefigure changes in the long-term trend.

By my analysis, gold ‘should have’ fallen to $821 at its correction low.  It could still get there, and that target will remain valid in any event until such time as 1432.50 is exceeded to the upside. But there is nothing in the chart that implies bulls are going to give up that much ground. To the contrary, they took a shot across bears’ bow with a $328 thrust in 2016 that tripped a theoretical long-term ‘buy’ signal at the green line (see inset).  The move exceeded no fewer than four ‘external’ peaks on the daily chart, and that’s why the bad guys have struggled so hard to push gold back down. They may be able to crush the spirit of bulls, and to do so repeatedly. But this is not the same as crushing prior lows that continue to provide ‘structural’ and psychological support on the long-term charts.

Set an Alert at 1208

If you want a warning signal that the tide could be turning in bears’ favor, simply watch for downtrends that exceed two or more prior lows on the monthly chart without a significant correction. At the moment, that would imply a sell-off exceeding 1208.60.  Even that wouldn’t necessarily mean gold is headed below $1000 — only that we should be especially mindful of downtrending abcd patterns on the lesser charts that start to exceed their ‘d’ targets. That would be warning that the bear is gaining the upper hand. We should also watch for ABCD uptrends that fail to reach their targets. This has actually been happening, and it needs to be monitored. But the effect is not so pronounced as to suggest any more than chronic-but-not-fatal fatigue on bulls’ part.  One more thing concerning the big picture:  Gold would need to push above 1662 to suggest that a move to the 2278 target is likely. That is a midpoint Hidden Pivot, and unless 1046 is exceeded to the downside, it will remain crucial to price action in the months or even years ahead.

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

$DXY – NYBOT Dollar Index (Last:93.60)

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The Dollar Index has rallied for three weeks without a significant correction, raising the odds that April’s 89.23 low could turn out to be a very important one. Notice as well that the dollar’s romp has exceeded numerous prior peaks, including no fewer than one ‘internal’ and two ‘externals’ labeled in the chart. From a ‘Hidden Pivot’ perspective, this defines the rally as a powerful ‘impulse leg’ — i.e., one with the presumptive moxie to generate another once the inevitable correction has run its course. The technical implications would be even more significant if buyers are able to push this vehicle past yet another ‘external’ peak without correcting along the way. The number to watch is 94.22, where DXY apexed in December.

I’m monitoring the dollar’s vital signs closely; for if the bull market begun in March 2008 has resumed, then, as I wrote here earlier, “everything is about to change — and I mean everything. A strong dollar would surely flatten exports, raising trade-war paranoia to a shrill crescendo. But the main effect would be deflationary in that it would tighten the noose around the throats of all who owe dollars.  Could the stock market move higher in such an environment?  Stranger things have happened, but it seems most improbable.” _______ UPDATE (May 10, 8:11 p.m.): Sellers overshot a clear Hidden Pivot support at 92.58 (15-minute, a=93.42 on 5/9), but not by much. Let’s see if bulls can get traction here.  It would start with a rally exceeding 93.10, equal to a minor peak made today on the way down. _______UPDATE (May 13, 10:10 p.m.): Any lower will produce a breakdown and a new short-term target at 91.96Click here for the chartUPDATE (May 15, 11:33 p.m.): Bulls are back in charge and with a nice single bar C (click for updated chart) could start to make some serious gains to the upside. Keep an eye on the LTTL peaklet 93.56_________ UPDATE (May 20, 6:44 p.m.):  Here’s a new chart that shows how the Dollar Index could romp to exactly 94.51 if and when it gets past a 93.82 midpoint Hidden Pivot resistance that stymied buyers as last week ended.  ________ UPDATE (May 22, 5:54 p.m.): The pullback from above the red line has triggered a ‘mechanical’ buy signal that implies more upside to the 94.51 target. The trade implied a stop-loss at 93.11 that is still in effect. Here’s the chart.

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

$AMZN – Amazon (Last:1603.32)

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It would have suited my dour economic outlook perfectly if AMZN had laid an egg when earnings were announced after Thursday’s close. The stock had already fallen more than 150 points in the days preceding the news, and there seemed to be little chance that it would reverse and surpass two peaks recorded in March. I’d said that such a move above would revive the flagging bull market, but my heart wasn’t in it.  Better that the stock should continue to fall, reinforcing my gut feeling that the bull market begun in 2009 is over. Kaput. Finito.

Instead, when the earnings hit the tape, AMZN erupted like Vesuvius, rocketing 249 points, or 16%, from the previous day’s low in mere hours. What are we to make of this?  I’ve heavily promoted the idea that Amazon is the best proxy we have for the so-called smart money — a window into the thieving, rapaciously greedy minds of Wall Street’s best and brightest. I have also long regarded the stock as the perfect bellwether for the U.S. economy — even moreso than GM during its heyday more than a generation ago.

So where to next?  My gut feeling is that AMZN’s rally into record territory is Mr Market’s way of setting the hook so that neither bulls nor bears will escape when the bear market, which may already have begun, comes a-roaring. It is practically unimaginable that the broad averages could keep pace with AMZN and some of the other lunatic stocks for long.  Something’s got to give, and my guess is that the stock market will drag the wack-o stocks down rather than be pulled higher by them. In any event, you should use the 1699.04 target shown as a maximum price objective for the near term.  There is no way the stock will push past it by much — certainly not on the first try.  When AMZN subsequently falls, that’s when we might expect to see the broad averages keep pace or even  lead the way lower. _______ UPDATE (May 3, 5:39 p.m. EDT): I still view AMZN as the most important bellwether for the bull market begun in 2009. In that regard, there is nothing bearish about this chart — other than the suspicion that last week’s marginal new record high would be a terrific way for Mr Market to set the hook for disaster. Regardless, we’ll continue to look at the impulse leg and pullback that have occurred in the last week as we always do. That implies, for starters, that the 1699.04 target will remain valid until such time as C=1346.25 is exceeded to the downside.________ UPDATE (May 13, 11:03 p.m.): AMZN has been curiously subdued lately — not just low-beta, but actually falling slightly when the broad averages have rallied.  Maybe its canny handlers are simply taking a breather?  In any case, the bullish trajectory of the hourly chart remains visually compelling, even if it flattened slightly over the last two weeks, and it would take a print below 1508.00 on the ‘hourly’ to become even mildly worrisome.

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

$TNX.X – Ten-Year Note Rate (Last:3.06%)

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It was back in December, when rates on the Ten-Year Note were hovering around 2.35%, that I first projected a move to as high as 3.11%.  Now, just a small turn of the screw will satisfy that target.  Some seers have said that anything above 3.00% will turn the economy to sludge, but I’d prefer to see a little higher — perhaps 3.25% — before I blow taps for the aging bull market. Notice the ‘external’ peak at 3.22% near the leftmost edge of the chart. If it is surpassed by the same upthrust that reaches our 3.11% target, the move would be warning bond bulls to stay out of the way. It would refresh the impulsive energy of the weekly chart, implying significantly higher yields and lower prices for T-Bonds and Notes. ________ UPDATE (May 20, 6:53 p.m.): The Ten-Year rate has pulled back, moderately so far, after topping last week within 0.05 points of the minimum upside target I drum-rolled here six months ago.  It may be a little while before we can determine whether the top will turn out to be a very important one, but my gut feeling is that still higher rates are coming — enough to put a good choke-hold on the U.S. economy.

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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Tuesday, April 17, 2018

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.

Another secret Rick will share with you, “camouflage trading,” takes more time to master, but once you get the hang of it trading will never be the same. The technique entails identifying ultra-low-risk trade set-ups on, say, the one-minute bar chart, and then initiating trades in places where competition tends to be thin.

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