Tuesday’s brutal slide left some key targets unfulfilled — most notably in AAPL and the E-Mini S&Ps. The targets are not far beneath the intraday lows, so we might look for a significant reversal if stocks open Wednesday morning on merely moderate weakness. Seasonality is strongly bullish, and DaBoyz are unlikely in any event to leave much unfinished business — i.e., heavy dumping — for a Friday when trade desks will be deserted. Rick’s Picks will be providing only limited coverage itself, so the next updates will be Sunday evening. Let me take this opportunity to wish you all a happy Thanksgiving. Enjoy the holiday!
Just a Little Farther to Go….Posted Tuesday, November 20 1 comment
$ESZ18 – DEC E-Mini S&P (Last:2646.75)Posted November 19, 2018, 6:23 pm
Although the futures have been falling hard, the weakness has been punctuated by upward spasms that have made staying short practically impossible. The bearish, 2624.75 target shown, which lies about 70 points below, looks like a good bet to be achieved over the next day or two. But I am not suggesting a mechanical short on a rally to the green line because of the choppy price action of the A-B leg. More appealing would be a ‘counterintuitive’ buying set-up from near the 2603.00 low that occurred on October 29. Stay tuned to the chat room if you care.______ UPDATE (Nov 20, 9:35 p.m.): The low of today’s 60-point plunge brought the futures to within seven points of the 2624.75 Hidden Pivot target proffered above. It remains viable, but if buyers can push this brick above 2683.50 intraday, that would raise the odds we’ve seen an important turn. Here’s the chart.
$AAPL – Apple Computer (Last:177.00)Posted November 19, 2018, 5:12 pm
The World’s Most Valuable Company (TWMVC) got the stuffing knocked out of it again on Monday and there may be more. Which is to say, things are likely to get worse before they get better. For now, use the 182.88 target shown as a minimum downside objective. Please note, however, that if that Hidden Pivot support gets crushed, or the stock closes for two consecutive days beneath it, that would augur a bloodbath to as low as 170.78 over the near term. At that point TWMVC will have given up a little more than 28% of its value since October 3, when shares peaked at a record $233.
Under $100 Eventually?
Isn’t it remarkable how quickly the first phase of a bear market can unfold? Looking well ahead, it could take six to twelve months or longer for the stock to grind out an additional 25% loss. But don’t be surprised if the final capitulation takes AAPL well below $100. The company will be far more vulnerable than most retailers in an economic downturn because its main product, the iPhone, is so pricey. If strapped customers should need to delay a trade-in for an additional 2-3 years, they will, no matter what kind of “new-and-improved” hubris accompanies future product launches.
One more caveat — for bears: Every portfolio manager on Earth owns this stock, and they are not about to go quietly into the night. It is therefore 100% predictable that the short-covering rallies will be spectacular, buttressed by planted news stories explaining why the stock is such a great bet to achieve new record highs. Don’t believe them. But neither should you stand too stubbornly in the way when AAPL test bears’ resolve._______ UPDATE (Nov 20, 9:42 p.m.): The stock began the day with a 10-point plunge to 175.51, $5 from the still-valid target at 170.78 given above. The low got re-tested at the end of the day and held, but we’ll need to see a rally to at least 183.80 before bulls could breathe even a small sigh of relief.
$CLF19 – January Crude (Last:54.09)Posted November 18, 2018, 5:14 pm
Crude’s price fluctuations are a circus act that I’ve watched with diminishing interest over the years. It’s easy enough to predict short-term swings with sufficient accuracy to make money at it, as Rick’s Picks subscribers who traded NYMEX futures and energy ETFs yesterday would be happy to attest. But paying diligent attention to the constant barrage of supply-and-demand spin that drives the big moves could make a guru’s head spin. On some days, the Saudi princes seem out-of-sync with their own PR flacks, promising plenty of oil when their gallimaufry of useful idiots are spreading a ‘tightening’ story like some strain of flu.
The China Factor
I’ve added this oil tout to today’s list nonetheless because I was curious about where prices might actually be headed. Clearly, not to the 2.06 target shown in the chart. But it’s still a good number to use to get the trend right, suggesting as it does that prices will continue to be pulled sharply lower by global forces that are only now becoming recognized. Near the top of the list would be the threat of a global slowdown. It has gotten a good start from China, whose already-serious recession has become an important factor in crude’s dive since early October. Prices peaked around $77 a barrel, but they were at $55.40 when the regular session ended on Tuesday. This equates to a decline of 28%. We shouldn’t be surprised to see quotes go even lower in the weeks and months ahead, possibly to the $30.25 ‘secondary Hidden Pivot’ shown in the chart. If that were to occur we could conceivably witness that rarest of miracles — i.e., lower prices at the pump. But I wouldn’t hold my breath. We should also allow for the remote possibility that forces unknown — war in the Middle East? — could reverse the current decline, pushing a barrel to as high as $90. That’s in the chart as well, albeit as an outlier tied to the upward correction from around $30 begun nearly two years ago._______ UPDATE (Nov 15): The January contract has an unfulfilled downside target at 56.35 that will remain viable as long as 57.18 is not exceeded to the upside first._______ UPDATE (Nov 18, 5:08 p.m.): The futures ratcheted tediously higher last week without exceeding any external peaks on the hourly chart. This left a bearish picture unchanged and an intraday low that came within 12 cents of the 56.35 target proffered above. Now, if the January contract falls anew, decisively exceeding the 55.91 midpoint Hidden Pivot support shown in this chart, it would put the pattern’s 53.66 target in play._______ UPDATE (Nov 20, 9:48 p.m.): Crude got savaged yet again, eventually turning from a low at 52.77 that lay 89 cents beneath the target flagged above. The overshoot is sufficient to imply that still lower prices are coming. However, an upward correction would get legs if buyers can close the January contract above 54.98, equal to an ‘external’ peak made Tuesday on the way down.
$HUI – Gold Bugs Index (Last:148.52)Posted November 18, 2018, 5:05 pm
$AMZN – Amazon (Last:1499.00)Posted November 18, 2018, 5:05 pm
AMZN has taken a tentative bounce from a secondary pivot at 1545.16. This is a logical place for a reversal to occur if the bounce is going to get legs. However, for bulls to nail it they would need to push the stock a further $80, exceeding the external peak at 1673.00 shown in the chart. That would put 1696.51 in play as a minimum upside objective, with potential for a run-up to as high as 1846.51. Alternatively, a relapse exceeding 1545.16 would put in play the 1465.55 target shown. _______ UPDATE (Nov 29, 9:05 a.m.): The stock has gotten schmeissed overnight and should now be assumed headed down to at least 1415.36. That’s the last logical short-term target available on the hourly chart, derived from sliding the point ‘A’ high up to Oct 17’s 1845.00. Please note that an alternative low at 1400.67 is possible if I use the 1859.69 ‘A’ created overnight on 10/17. One target or the other, precisely, is extremely likely to produce a tradeable bounce. ________ UPDATE (Nov 20, 9:56 p.m.): A spectacular, 92-point plunge brought the stock down to within less than $5 of the 1415.36 target I’d sent out the night before. It remains viable in theory, but bulls appeared to be gearing for a rebound to at least 1544.07. If they can get decisively past that midpoint Hidden Pivot resistance, they’ll have a shot at 1601.44.
$GCZ18 – December Gold (Last:1222.00)Posted November 11, 2018, 5:06 pm
Gold fell a further $13 on Friday, pausing just a few ticks above the 1206.70 target I’d sent out the night before. I say that the futures have merely paused because the void beneath that low looks like it wants to be filled. That would imply renewed weakness in the days or perhaps weeks ahead to at least 1190.50, the midpoint Hidden Pivot support shown in the chart. Notice that the worst case over the next several weeks would be 1134.90, a crystal-clear target that lies 6% below. A decline of that magnitude would be discouraging, but it would still be a far cry from the sub-$1000 prices that some bullion bears have long predicted. A half-hearted sell-off would reflect the reality that weakness since 2011, when gold’s price hit a record high $1911, has been merely corrective of a long-term bull market begun in 2008 from $680.
Sellers Unable to Deliver a Coup de Grace
As persistent and vexatious as sellers have been since 2011, they have lacked the power to deliver a coup de grace. While it’s conceivable that gold could eventually fall below $1000, there are no strong indications on the long-term chart that this is likely. Indeed, price action since early 2016 has been bullish and could support a push to as high as 1452.60. This would be in the context of a decade-long bull market that could ultimately reach 2278.20. Click here to see the picture. _______ UPDATE (Nov 14, 9:34 p.m.): A sharp push past 1225.40 would re-energize bulls for a possible shot at 1254.10. Here’s the chart. _______UPDATE (Nov 15, 7:30 p.m.): This pattern looks extremely likely to work, meaning that a decisive stab past p=1216.30 will put December Gold on course for a run-up to exactly 1225.50. If so, that would set up a correction and then a further push past 1225.40.________ UPDATE (Nov 16): Subscribers reported making hay Friday when December Gold surged to within 50 cents of the 1225.50 target given in my last update. The pullback so far has been shallow, suggesting buyers are consolidating for another push. If it gets past the 1228.50 ‘external’ peak shown in this chart, that would re-energize bulls for yet more marauding. ________ UPDATE (Nov 20, 10:03 p.m.): Gold relapsed as it so very often does, but not before buyers spiked above the ‘external’ peak at 1228.50 noted above. That refreshed the bullish energy of the intraday charts, but I am making no specific recommendation at the moment. The pullback tripped a mechanical buy signal at 1223.20, stop 1218.40, but we’ll let it pass.
$TYX.X – 30-Year T-Bond Rate (Last:3.45%)Posted October 22, 2018, 6:55 pm
Anyone hoping Treasury rates will ease, cutting stock-market bulls some slack, must first reckon with the chart shown (see inset). It implies that a significant rise in yields on the 30-Year Bond is coming, and that they will hit 3.59% before borrowers get any relief. If this occurs as appears likely, 30-year mortgages will be pushing above 5%, causing an already shaky housing sector to implode, along with the auto-leasing business. A key resistance to watch sits at 3.44%. That’s a Hidden Pivot rally target of lesser degree than the one noted above, and if it gives way easily there should be little doubt that the long bond is on its way to at least 3.59%. Some may point out that the U.S. economy has survived much higher rates; however, that should come as scant comfort, since rates have never risen so sharply after having been artificially held so low for so long. As to Fed hubris that would have us believe the economy is strong enough to weather higher interest rates, the banksters will discover otherwise — discover that most of the supposed ‘strength’ has come from stock-market and real-estate valuations pumped to the sky by easy-credit policies._______ UPDATE (Nov 3): TYX blew past 3.44% on Friday, further shortening the odds that the 3.59% target given above will be reached.
$DXY – NYBOT Dollar Index (Last:96.64)Posted October 11, 2018, 7:04 pm
$BRTI – CME Bitcoin Index (Last:4380)Posted September 13, 2018, 5:20 pm
Bloomberg news is out with a breathless dispatch tonight that suggests digital currencies have bottomed. If so, I can find no compelling evidence of it in the charts. Their expert is a guy named Michael Novogratz, a former Goldman Sachs partner who likes the current look of Bloomberg’s Galaxy Crypto Index. It measures the performance of the largest cryptocurrencies versus the dollar and was compiled jointly in May by Bloomberg and Novogratz’s investment fund, Galaxy Investment Partners. I use the CME’s Bitcoin Index (Symbol: BRTI) myself, and it looks brain-dead to me. I would turn quite bullish if BRTI were to thrust above the 8594.57 peak labeled in the chart (see inset), but until such time as that happens, I’m inclined to think it will dip first to the 4396.32 target shown in the chart before warranting our serious attention. ________ UPDATE (Nov 16): My dour outlook is about to give way to a new, bullish reality. For my reasoning, check out the commentary on this page under the heading Ruminations: Why a Hard-Core Bitcoin Bear Is About to Turn Bullish.________ UPDATE (Nov 20, 10:15 p.m.): Sellers crushed an important Hidden Pivot support at 4396 with rather more force than we might have expected, implying they are likely to inflict further damage before this vehicle can bottom. A rally exceeding 4892 would turn things around, but failing that, BRTI could fall all the way to 2991, or perhaps 2601, before it finds traction. The latter number is a Hidden Pivot support of unimpressive pedigree; the former, a key low recorded ten months ago as bitcoin was blasting off.
TNX.X – 10-Year Note Rate (Last:3.225%)Posted August 19, 2018, 5:05 pm
J.P. Morgan Chase CEO Jamie Dimon recently raised his forecast for rates on the Ten-Year Note, currently trading just below 3%, to 5%. He’d predicted a rally to 4% back in May but now thinks the bull market in stocks could run for another two or three years, putting additional upward pressure on long-term yields. For its part, Rick’s Picks has told subscribers to expect a push soon above the 3.11% peak recorded back in May — a peak we had foreseen five months earlier when the Ten-Year Note was paying around 2.35%. We offered no specific target at the time but will now: 3.32%, as shown in today’s chart (see inset).
It’s hard to square Dimon’s interest-rate forecast with the notion that the bull market in stocks has a few more years to run. Our gut feeling is that anything above 3.25% will asphyxiate the U.S. economy and send it into recession. The housing sector is already in a sharp downturn as reported here last week., and even a small turn of the interest-rate screw could asphyxiate it, along with auto leases. This would be a double whammy for the stock market, since mortgage rates have been held for a long time at levels that allow Americans to buy more home than they can afford. Similarly, car leases are structured so that we can drive more car than we can afford. The silver lining here turns out to be an unappealing scenario: rates go no higher than 3.50-4.00, but only because the U.S. economy has nosedived. _______ UPDATE (August 19, 5:07 p.m.): The uptrend stalled at 3.106% and in the three weeks since has receded to the middle of the 2.72% – 3.11% range in which rates have fluctuated for the last six months. My bias is neutral for now. Here’s an updated chart. ______ UPDATE (Sep 24, 10:46 p.m.): Rates on the Ten-Year Note are breaking out following a four-month consolidation. My minimum upside projection, shown in this chart, is 3.157%, but an easy move past that Hidden Pivot would imply yields are headed still higher._______ UPDATE (Oct 3, 8:28 p.m.): The uptrend impaled our 3.157% target, opening a path to the 3.319% Hidden Pivot resistance of an even bigger pattern. When it gets there — and it will — the February 2011 peak at 3.744% will beckon a test. Were the rally to fail at that level, the financial system would still be under considerable stress at that point to pay the going rate on debt._______ UPDATE (October 7, 5:53 p.m.): Two big thrusts last week have shortened the path to the 3.319% target. If it’s decisively exceeded, look for more upside to at least 3.469%, the Hidden Pivot resistance shown in this chart.
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Tuesday, January 8, 2019
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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AAPL, Broad Averages Joined at the Hip
Believing Our Lying Eyes
Why a Hard-Core Bitcoin Bear Is About to Turn Bullish
Using AAPL to Precisely Time the Stock Market’s Big Swings
A Field Day in the Rick’s Picks Chat Room
Bear Market Will Require Trading-Style Changes
Read This If You Don’t Like to Be Fooled or Surprised
Mind Games Keep the Aging Bull Alive
Midterm Results Trigger a Bullish Frenzy, but Why?
Wall Street Oddsmakers Feverishly at Work