Rick Ackerman

The U.S. dollar took a massive hit in stride following last week's announcement of a $6 trillion bailout package. The news caused the greenback as measured by the Dollar Index (DXY) to fall by just a few points from recent highs. The dollar's seemingly inexplicable strength is a harbinger of the catastrophic debt deflation I've been warning about for many years, since it will increase the real burden of debt on all who owe dollars.  It also shows how the dollar can be subject to short-covering pressure capable of pushing its value far above any logical threshold, even when the Fed is practically giving away dollars to the rest of the world. Let me explain. At present, exceptionally strong demand for dollars is being driven in significant part by liquidity issues originating in Japanese financial markets. Like all central banks, the Bank of Japan has usurped the role of debt markets in order to create a nearly unlimited supply of money to prop up the economy. One way it force-feeds yen into the system is by buying Japanese government bonds held by dealers. Dealers have been reluctant to sell lately, however, because they need the bonds to collateralize short-term borrowing in U.S. repo markets. They are more eager than ever to borrow dollars because the Fed has made them so cheap. 'Opportunity Moves to Size' The Fed's intention in backstopping global markets with an effective $4 trillion credit line, in addition to a $2 trillion consumer stimulus, was to avoid a run on financial markets. Instead, the banksters may be about to discover that they have stimulated infinite demand for U.S. dollars. I once wrote about this in the context of my experience as a floor trader. One might think that if, say, IBM shares were trading in 50,000-share blocks,

Just so you know, the biggest rally since 1933 has yet to surpass even a single 'external' peak on the hourly chart. For that reason, I'll reserve my enthusiasm for the time being -- especially since we know that the purpose of bear rallies is to fool us into believing they are the real McCoy. Did today's wild-eyed buying ignore the reality that grave uncertainties will continue to hang over the economy for the foreseeable future? Of course it did. Did Trump's optimism go over-the-top when he circled April 12, Easter, as the goal for loosening the lockdown on commerce? For sure. As it happened, just minutes before he spoke, the World Health Organization was predicting America will be the scene of the next big outbreak. Don't think I am going to get in the way of this speeding locomotive, though, no sirree.  But I will remain skeptical as long as my stock charts fail to confirm such unwarranted exuberance as we saw today. As I keep reminding you, it's all about impulse legs, and I will continue to look at ABC patterns in ES and other trading vehicles as though they were formed from inconsequential, one-minute price bars. They are all the same to me. For now, that means buyers will need to push this brick past past 2542.75, an 'external' peak that I've labeled in the chart. Also, I cannot simply overlook the fact that the recent lows shredded a clear and very important downside target at 2206.75. Some chartists would say this Hidden Pivot support held, albeit barely. In my estimation it didn't, and the 1956.25 downside target given here earlier will therefore remain theoretically valid until such time as C=2697.25 is exceeded to the upside. Until that happens, forgive me for not being excited. Isn't that

To My Readers: I have sent the following note to Sean Hannity, Rush Limbaugh and Holman Jenkins of the WSJ Journal. It is a MUCH better idea than squandering $2 trillion sending out checks to...EVERYBODY. Here is what the President needs to do. Forward this to your Congressman if you agree: President Trump needs to mobilize the Army to set up Civil Conservation Corps/WPA-type work camps to rebuild America. Virus-test each recruit who shows up, train them, then put them to work. The mobilization would be similar to the WWII effort, when crash courses turned no-nothings into navigators, bombardiers and radiomen in mere weeks/months. Taxpayers would be getting a much better value for their $2 Tr than sending checks/debit cards out to every household. This would be a huge political winner for the President, but also for America. Everyone has talked about rebuilding America’s infrastructure, but this is a great opportunity to actually do it. Sincerely, Rick Ackerman

Yesterday in the chat room, I asserted that gold should have been up $120, not a mere $70, to discount the Fed's planned dollar giveaway to...EVERYBODY. However, I was unmindful of the fact that the supposedly omniscient stock market is actually as dumb as a fence post, hence the delayed reaction. It can be dumber than a fence post, actually. Recall how it took more than two weeks for stocks to drop after people began to keel over dead in Wuhan. If Feinstein and Burr knew enough to sell their shares, 'the market' should have too. Anyway, I do NOT see inflation on the horizon, and that is why I think this rally is unlikely to hit $2000. We should enjoy it while it lasts, though. It is guaranteed to hit a minimum 1731.20 (basis April) over the very near term, or 1852.00 if any higher, with a possible stall at 1751.70.  The chart shows the provenance of these targets.

The pros who confidently bought the dips for more than a decade are now quietly selling the rallies. During the bull market, accumulating stocks on weakness was a no-brainer, as easy a ticket to big profits as investors will ever enjoy. But the bear market has ended this rare opportunity. Instead, the Masters of the Universe have been unloading as much stock as they can into every rally. This tactic was clear on Friday in the wee hours, when shares rose sharply on gaseous volume while most of us were sleeping. The intent to distribute was so obvious that Rick's Picks put out a recommendation at 5:34 a.m. to short the E-Mini S&Ps. (Here's the actual post in the Trading Room. The futures subsequently fell more than 200 points.) Only a few subscribers were able to take advantage of this guidance, however, because of the ungodly hour. Get used to it. Short-squeeze spikes tend to occur at times that are either inconvenient or intimidating to most traders: on Sunday nights; in the final hour on Friday; on the opening bar of day sessions. Rinse and repeat. How to Recognize Distribution Distribution is the name of the game these days, and you will need to understand how it works if you want to survive the bear market. We saw a sustained example of it in Boeing [BA] when shares held above $300 for an entire year while scandal engulfed the company. After deftly unloading as much BA as possible during that time, DaBoyz pulled the plug and the stock plummeted to $90 just ahead of the pandemic selloff.  Equally adroit was the outwardly gentle distribution of U.S. shares that occurred in early February. You may recall that the stock market hovered defiantly aloft for weeks, even as coronavirus stories out of

I am recommending bottom-fishing if AAPL gets within a 10-15 cents of the 223.93 target shown in the chart. Buy two options expiring March 27 at the lowest out-of-the-money strike at which calls are priced under 1.00. This trade is suitable for rookies because the target, which comes from a gnarly pattern that is just my style, looks likely to work precisely. You can interpolate my instructions, perhaps increasing the size of the bet, if you know what you are doing. Check back before Monday's opening in any event, since I might be able to refine my instructions. That is impossible now, since Tradestation is not currently showing Friday's closing bid/ask data for AAPL options. I have not made the 223.90 price target publicly viewable, but be aware that moles from Goldman, Morgan Stanley et al. seem to be aware of them and could front-run us. _______ UPDATE (Mar 23, 9:15 a.m.): Better get used to it. AAPL popped a $17 rally from 221.25 that would have offered an excellent bottom-fishing opportunity -- except that the low occurred at 4:30 a.m., and the move was over by 8:30, an hour before options open. Trend and target, as you will have observed, are as easy to nail as shooting fish in a barrel, but we can only make money on them if they occur at the 'correct' time of day. There will be other opportunities. ______ UPDATE (Mar 23, 5:46 p.m.): AAPL relapsed to a target that worked even more precisely for bottom-fishing. With apologies, here's the chart that I mistakenly thought I'd posted in the Trading Room in timely fashion. Under ordinary circumstances, the precise completion of a pattern that has taken more than two weeks to play out would augur a strong bounce lasting at least 2-3 days. We

For all of last week's violent price swings, the April contract appears to be basing above 1450. The 1407.30 downside target remains viable nonetheless, and the futures did in fact trigger a 'mechanical' short to that number on Friday at 1517.60 (240-min, A=1597.90 on 3/13).  Looking at a much bigger picture, the chart (inset) stretches back a decade in order to put the bull cycle begun in 2016 in a useful perspective.  You don't need to be a technician to see that the $260 surge begun last November, encouraging though it was, fell well shy of the moon shot that would have signaled much higher prices. Specifically, the upthrust failed to generate a strong impulse leg on the weekly chart when it died well shy of the key peak at 1794 recorded in 2012. That doesn't necessarily mean the high won't eventually be exceeded, only that it could take quite a while -- meaning years -- for it to happen. I am not ruling out a spectacular bounce shortly from somewhere above 1400, but if there is instead a protracted rally, even a strong, steady one, its potential would likely be limited. _______ UPDATE (Mar 23, 5:57 p.m. EDT): Gold's biggest rally in recent memory failed to exceed even a single 'external' peak on the hourly chart. The nearest lies at 1574.80, about $5 above today's high, but we'll reserve judgment about the health of the uptrend until we've seen a little more of it.

A week's worth of extreme chop has not altered the 2204.50 minimum downside target proffered here last Sunday. It can be used a minimum downside objective for now, but also as a place to attempt to get long with as tight a stop-loss as you can abide.  Friday's recommendation to get short was posted in the chat room at 5:34 a.m., when most U.S. subscribers to Rick's Picks were asleep. It could have produced a profit of as much as $10,000 per contract, since the June contract fell 200 points after the trade triggered. The actual price at which the trade was to have been initiated differed by just a few points from the 2464.81 trigger given, since the high of the day occurred slightly above where it was when I published my guidance. The set-up followed tactics we have been using routinely during Wednesday tutorial sessions, but I'll leave it to you to figure out why I suggested taking the plunge when I did. ______ UPDATE (Mar 23, 6:10 p.m.): Sellers exceeded the 2204.00 target by enough to suggest that more slippage looms. If so, look for the futures to hit 1956.25, the D target of this pattern.  The Dow will be trading under 16,000 if that happens. Bulls could get a repreive if whatever short-squeeze is planned for Tuesday exceeds the 2386.00 peak shown in the chart.

The futures finished the day exactly where they were last Friday, at the bottom of a monster rally. Thousand-point swoons aside -- and there were more of them than we could accurately recall -- the week has been a big nothingburger. Seeing the glass as half-empty, some might have characterized Thursday's gratuitous swings as bearish, since stocks made no headway. But others would have noticed how sellers failed to break new ground. It was in fact an inside day, with a high and low that fell within the previous day's range. Add in the fact that nearly all of the FAANG/lunatic stocks showed substantial gains, and you might think DaBoyz were developing thrust for a week-ending short squeeze. The fact that AAPL and Boeing lost ground makes the bullish case even more persuasive, since it suggests the ultrasmart money was saving its energy to spring a bear trap worthy of the name. That's my take, and I'd feel even more strongly if index futures are trading moderately lower at the opening bell, looking ready to rumble.  As for the 2204.25 downside target we've been using since Sunday, it looks almost too phat to go unfulfilled. But if this triple witching day ends with the E-Minis above Tuesday's 2543 peak and news over the weekend is less than horrible, expect bulls to come out swinging Sunday night. Virus news has been ever-so-slightly less depressing over the last two days and economic news ugly but not indigestible. The subtle shift could provide perhaps just enough emotional decompression to give shares room to take a deep breath.