The FAANGs and a few other ‘lunatic’ stocks beloved by institutional buyers have deservedly been getting thrashed, but it looks like the pain is unlikely to abate any time soon. My downside targets in two key stocks, GOOG and AMZN, are well below current levels, implying they will remain a drag on the market. One stock that has been bucking the tide is Microsoft, which is within a three-day rally of all time highs. DaBoyz seem to have settled on the stock as their top choice for flight-to-safety, presumably because the company has got its subscription-revenue model dialed in. This provides a very predictable stream of profits that has become nearly as bomb-proof as utility company earnings. Another plus is that, unlike Apple, Microsoft hasn’t announced plans to jump into the streaming content business. Indeed, the software giant has shunned hubris in favor of quietly making money the old-fashioned way. It has been winning over customers (including me) with improved products, but also with a level of customer support that has all but disappeared from the digital world.
Is it okay for Tesla bulls to come out of their bomb shelters? Perhaps, but only with caution. The stock bounced sharply on Monday from a low that was close to the 193.31 Hidden Pivot support we were using as a minimum downside target. On the hourly chart (inset) the selloff looks to have reversed an inch from where we’d expected. But I hesitate to declare the target achieved, since the tiny-looking gap was actually $5.45. Given the sinewy delicacy of the pattern itself, we might have anticipated a tradeable bounce from within no more than 15-20 cents of the target. In addition, downside gaps at the red line (p) and the secondary pivot (p2) imply that sellers are not yet spent. Bottom line, I’ll suggest keeping your enthusiasm in check until such time as TSLA exceeds 213.30 — or better yet, closes above that number. It is equal to an ‘external’ peak recorded Friday on the way down, and a move above it would generate a robust impulse leg on the lesser charts. _______ UPDATE (May 22, 4:07 p.m.): Down nearly $12 midway into Wednesday’s session, TSLA bounced from within a nickel of the 193.31 target. Unfortunately, it subsequently slipped lower and closed 62 cents beneath it. Any further slippage would send the stock down to 188.81, a minor Hidden Pivot support, but a close beneath it would put a 170.21 target in play.
Rick’s Picks Member-only content. Please Login (in Right Column)You must have a current Rick’s Picks Subscription to view this page
A 10% fall over the last seven days has generated some bearish impulse legs on the lesser charts without doing much damage to the much larger uptrend begun on January 3. Even so, because Apple has nothing new in the pipeline as profitable as iPhone sales, which have been weakening, we’ll want to make sure that bulls prove their case each step of the way before we buy into it. For now, that would mean a thrust exceeding the green line (click in inset). It would trip a theoretical buy signal for a shot at 233.50, but more immediately to the 208.14 midpoint pivot of the pattern. Keep in mind that neither of these Hidden Pivots nor their targets will even exist until AAPL reaches 200.45. _______ UPDATE (May 13, 11:16 a.m. ET): AAPL’s plunge today has put a 179.48 target in play. Judging from the way sellers crushed the midpoint Hidden Pivot at 189.02, I’d rate the target an 80% bet to be reached._______ UPDATE (May 14, 4:11 p.m.): A small rally has changed nothing. Set an alert at 198.56, since that’s where it would become technically meaningful. ______ UPDATE (May 19, 10:29 p.m.): DaBoyz are having trouble propping up the stock. If it slips below 185.54, use D=178.61 as a minimum downside target. Here’s the chart. _______ UPDATE (May 23, 11:41 p.m.): AAPL fell to our 178.31 target as expected, then struggled for the rest of the session to hold above it. Next stop on the way down: 175.48. (30-min, A= 201.68 on 5/9).
Bulls failed on the last upthrust to take out a 1293.10 ‘external’ peak recorded in mid-April, but we’ll give them the begrudging benefit of the doubt anyway because bears seem even more enfeebled right now. A push above p=1292.10 in the early going on Monday would put the futures on track to hit D=1304.00. We’ll watch for a ‘mechanical’ buy set-up to develop in the meantime, since such opportunities are few and far between in this oft-leaden trading vehicle. _______ UPDATE (May 13, 11:34 a.m. ET): The futures have popped to 1300.70 today, making them an even better bet to hit the 1304.00 target. They did so, however, without having pulled back to a mechanical bid that would have triggered at 1286.20. For the record, I regard the so-far $13 rally as pretty weak, considering that the Dow is down nearly 600 points at the moment.______ UPDATE (May 13, 9:40 p.m.): The futures topped at 1304.20 tonight, two ticks above the rally target provided above, before pulling back by $4 [and now $29!]. The next thrust would need to exceed 1314.70, equal to an ‘external’ peak recorded on April 10, to refresh the bullish energy of the hourly chart. _______ UPDATE (May 19, 10:39 p.m.) Selloffs are as unconvincing as rallies, so we should be surprised if this one takes out lows near 1268 recorded within the last month. If it does, use 1256.80 as a target. Here’s the chart. ______ UPDATE (May 23, 2019): I love this rally — to get short, that is! You can do so mechanically at 1292.40, stop 1304.20. The chart linked in the May 19 update is still relevant.
Dollar bears seem to be everywhere these days, so perhaps it’s a good time to revisit the longer-term charts, which remain bullish. Notice that each visually significant upthrust in the Dollar Index exceeded an external peak. This has serially refreshed the bullishness of the chart while implying that any bout of weakness is merely corrective. However, a key resistance lies not far above in the form of a 100.71 midpoint Hidden Pivot. Although this number can be used as a minimum upside target for now, DXY would need to push decisively above it, to perhaps 103 or higher, before we could infer that the 113.16 ‘D’ target is solidly in play. At that point, p2=106.93 could be used as a minimum upside objective.
In an earlier DXY tout, I provided a long-term view as well as a detailed explanation of why I think the dollar is ultimately headed much higher. (Note: DXY represents a basket of currencies that is 60% weighted toward the euro.) An extremely strong dollar would be congruent with the global deflationary collapse that I believe is necessary to correct millennial excesses of debt in the financial system. I see this as unavoidable. For my essay on the coming debt deflation, click here.
Google was down a hellacious 112 points, or 9%, at Tuesday’s low, but the plunge did little damage to the bullish look of the weekly chart (click on inset). The fact that this occurred after the stock had pushed above last July’s record high makes the selloff merely corrective rather than impulsive. It was attributable to a dour earnings report which suggested Google is losing ground in advertising to Amazon and Facebook. From the look of the chart, however, it seems predictable that the company will find a way to cope and get back in the race. Another thing to be inferred from the stock’s steep dive is that it was engineered by the same institutional wiseguys who have been buying it all along. They’ve created for themselves a fire-sale opportunity, and we should therefore look for GOOG to stabilize, presumably at somewhat lower levels, before the accumulation cycle begins anew. Alternatively, the stock would need to fall a further 290 points (!), or 25%, exceeding the 894 ‘external’ low recorded last June, to turn the weekly chart bearish. This seems unlikely, even after today’s heavy losses. _______ UPDATE (May 8, 8:58 p.m. ET): With GOOG struggling for altitude, I’ll note that any slippage could send the stock down to at least 1123.71, a midpoint Hidden Pivot support shown in this chart. It is associated with a ‘D’ target at 1056.68. _______ UPDATE (May 13, 2:33 p.m.): The stock has bounced $12 so far after bottoming at 1122.11, an inch below my minimum downside target. If a relapse crushes the target, that would imply more slippage to as low as D=1056.68._______ UPDATE (May 16, 4:14 p.m.): Bears have gotten squeezed hard for two straight days, but the pressure appears to have eased slightly with a close in the middle of Thursday’s range. The rally came within less than $3 of stopping out a mechanical short from 1157.28 that I did not recommend. Now, buyers would refresh the bullish energy of the daily chart if they can close this hulk above 1190.85. _______ UPDATE (May 19, 10:57 p.m.): The stock became a weak ‘mechanical’ short at 1157.28 last Wednesday, stop 1190.86, with a downside target at 1056.58 that was noted above.
Click here for a special deal for graduates of the Hidden Pivot Course who want to stay on the cutting edge
Tuesday, June 11, 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.
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.
Most important of all, Rick will teach you how to develop market instincts (aka “horse sense”) by observing the markets each day from the fixed vantage point that only a rigorously disciplined trading system can provide.
The three-hour Hidden Pivot Course is offered live each month. If it’s more convenient, you can take it in recorded form at your leisure, as many times as you like. The course fee includes “live” trading sessions (as opposed to hypothetical ‘chalk-talk’) every Wednesday morning, access to hundreds of recorded hours of tutorial sessions, and access to an online library that will help you achieve black-belt mastery of Hidden Pivot trading techniques.
The next webinar will be held on Tuesday, June 11. Click below to register or get more information.
Jim Grant Says It’s Time to Abolish the Fed
Inured to Bad News, Stocks Waft Higher
A Jittery Standoff
Far Bigger Concerns than ‘Game of Thrones’
Bitcoin Mania Is Back! Are You Ready to Rumble?
WeWork IPO a Sobering Thought
Learning to Love Heavy New Tariffs
Did Trump Outsmart China by Tanking Trade Talks?
A Scary ‘What If?’
Tariff Fears? Get Ready to Buy the News