Wednesday, June 20               Published daily Receive a free trade each day
The Morning Line

When Distribution Quacks Like a Duck

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Although the broad averages have risen sharply in each of the last three sessions, none of these short-squeeze lollapaloozas has recouped the even bigger losses sustained earlier in the day. Do we detect a pattern here? The biztainment media seem to wax enthusiastic whenever stocks trampoline off some ugly low like Tuesday’s. But we shouldn’t lose sight of the fact that if the three-steps-down, two-steps-up dynamic witnessed in recent days were to continue for long enough, the Dow would eventually fall to zero.

That will never happen, of course, even when the trumpets sound from on high. But it is a good description of how bear markets typically unfold — i.e., with shares initially falling on most days, gaining momentum until sellers are spent; then, rallying so spectacularly as to fill the crippled, wounded and maimed with hope. “Hope” is the last thing an investor should want to feel, the last refuge of the loser.

Don’t Get Sucked In!

I mention all of this so that Rick’s Picks readers don’t get sucked into what feels like flagrant and pernicious distribution lately by the smart money. For all of us, of course, it is ultimately about making money no matter what the market does, and we should expect to do so regardless of which way stocks are headed. Today, for instance, a SPY chart posted in the chat room by “Nervis Novice” prompted some Hidden Pivot analysis that caught the exact-to-the-penny 273.53 low of a plunge that saw the Dow down more that 400 points at low ebb. A timely interpretation of Nervis’ chart allowed subscribers to buy expiring June 275 calls at or near their low of the day, 0.42, for a quick and easy doubler. (The options nearly tripled, actually, trading as high as 1.16 before the session ended.)

Unless stocks are headed into summer doldrums — always a possibility — there will be opportunities galore to leverage Wall Street’s madness, which seems to be intensifying. My suggestion is to tune out CNBC and all the rest — especially when they are talking about tariff wars — and focus solely on price movement. You will be amazed to discover how stocks drive the news rather than the other way around. Join the fun at Rick’s Picks by clicking here for a free two-week trial subscription and a ringside seat in a 24/7 chat room the draws great traders from around the world.

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Touts

$ESU18 – Sep E-Mini S&P (Last:2764.00)

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$NFLX – Netflix (Last:404.96)

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$TNX.X – Ten-Year Note Rate (Last:2.924%)

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Because mid-May’s multiyear high at 3.11% precisely matched a target I’d sent out to subscribers five months earlier when rates were around 2.35%, I was open to the possibility that yields had made a major top.  This seemed even more likely when the Ten-Year Note plunged to 2.76% over the next 12 days. Now, however, a strong recovery rally has shortened the odds of a move to new highs.  is a  If it is coming, it would generate headwinds above 3.25% sufficient to slow the U.S. economy or even suffocate it, since rates for mortgages and car leases would rise as well. At the very least, based on the chart shown, Ten-Year Note yields look very likely to challenge the May high, since the target is actually 0.04 points above it. The rally could turn out to be a bull trap, either by forming a double top or, less likely, an upthrust to new heights that reverses precipitously. A third possibility is that, once above May’s highs, rates will continue to rise. Whatever the case, I will be monitoring this vehicle closely, since a move into the 3.25%-3.50% range would significantly reduce the flow of oxygen to the U.S. economy’s heart and lungs — i.e., housing and autos. ______ UPDATE (June 14, 9:14 p.m. EDT): Check out the $TYX.X tout above, since it recalibrates my thinking about where long-term rates may be headed. ______ UPDATE (June 17, 5:10 p.m.): Rates on the Ten-Year now look primed for a fall to at least 2.831, a compelling midpoint Hidden Pivot support shown in this chart.  However, if the support is breached decisively (i.e. 28.00 or lower), look for yields to fall to as low as 2.653 over the near term.

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

$TYX.X – 30-Year T-Bond Rate (Last:3.067%)

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In the tout above, I wax mildly bullish on $TNX.X, a vehicle that tracks interest rates on the U.S. Ten-Year Note. This implies that I am bullish on rates and believe they will rise, but bearish on the Note itself, because its price would fall.  Now, with an insightful nudge from my friend Doug Behnfield, a Boulder-based financial adviser whose thoughts have been featured here many times, I am persuaded to take a closer look at both vehicles. Lo, the chart of $TYX.X, which tracks rates on the U.S. 30-Year Bond, reinforces a somewhat different conclusion — i.e., that long-term rates are headed lower, perhaps significantly so. (To embrace this point of view would make me a bond bull, since bond prices would rise rise as yields fell.) From a technical standpoint, the crucial number here is 2.994%. Rates look very likely to fall at least to this level. But if they easily trounce that ‘Hidden Pivot’ support, trading 2.970% or lower intraday, or if rates close for two consecutive days beneath the pivot, I’d infer that they are headed  down to at least 2.847%. At that level, the same observations would obtain: a quick and decisive breach would portend still-lower rates. I’ve set an alert and will keep you closely apprised, so stay tuned to this tout if you care.

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

$AG – First Majestic Silver (Last:7.77)

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$FB – Facebook (Last:197.51)

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$GCQ18 – August Gold (Last:1285.80)

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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.

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.

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