Rick Ackerman

I mentioned shorting this wacko-powered gas-bag in the The Morning Line, which is publicly viewable, but without divulging any proprietary details. Ordinarily I would advise waiting for SPX to hit the D target at 3477 (see inset) before we place a bet. In this case, however, I have a strong gut feeling that the target may be too obvious to reward us for doing what many others who use ABC or Gartley 1-2-3 patterns will be attempting to do. Bull markets have been known to die somewhat shy of picture-perfect D targets like this one, and I don't want to miss a great opportunity to bet the 'don't pass' line if that should happen here. It is not incidental to my argument that hubris surrounding the stock market, the economy and Trump's presidency has reached a deafening pitch.  Everything seems just a little too perfect, and the bull market has no right anyway to be rampaging at a time when the coronoavirus threat to the global economy is still unknown. China has already shut down economically, and commodity markets, especially oil and copper, have fallen sharply to reflect this, even if, conspicuously, the crazed U.S. stock market has not. I mentioned in my Morning Line comments that we will have an enticing opportunity to make money on this trade even if the S&Ps turn around after falling and surge to new record highs. Odds are good, in my estimation, that once they hit the X trigger at 3199 they will fall to at least p=3051, where we could take a partial profit or perhaps cover the entire position. Here's a chart that shows the pattern, with the rABC shorting set-up. Those of you who trade futures can interpolate using the E-Mini S&Ps, which move almost point-for-point with the cash CBOE

What's powering the U.S. economy? 'It's a mystery,' concludes a think-piece by Noah Smith posted Wednesday at Bloomberg.com. He ultimately settles on a boring economic environment as the main reason why U.S. consumers continue to spend. While we may be living in all-too-interesting times from a geopolitical standpoint, the U.S. economy is arguably on a modest glide path, with no misguided Fed policies, oil price spikes or wild speculation to trigger a recession, Smith writes.  Of course, the eternal optimists who nurture and sponsor bull markets have voiced similar thoughts just ahead of every recession that has ever occurred, so we should probably take what they are saying now with a grain of salt. Stocks are priced, if not for perfection, then for expectations that nothing will go seriously wrong. Paradoxically, the worst thing that could actually could go wrong, and eventually will, is the onset of a bear market. It is predictable that it will begin for reasons that will not be apparent until we are all waist-deep in it.

Gold continues to bide its time, coping with seemingly limitless strength in the stock market.  Precious metals have held up well, considering that even two-day selloffs on Wall Street are becoming an endangered species. The chart shows nearly a month's worth of tedious oscillations punctuated by a couple of gratuitous feints higher. One of these days buyers will catch fire and complete the pattern shown in the chart, pushing this vehicle to a target at 1690.20 flagged here earlier. In the meantime, unless there's a dip beneath the 1542.80 point 'C' low, our minimum upside objective will remain p=1616.50.  We can trade it from either side of the market almost at will, as a $2200 scalp demonstrated on Tuesday, but this will require more patience than most of us have got. ________ UPDATE (Feb 19, 7:01 p.m.): After rallying sharply over the last two days, April Gold has stalled just 60 cents from the 1616.50 target we've used as a minimum upside projection. Two consecutive closes above it would put the 1690.20 target also flagged above in play. The move has been easily tradeable, even by doubters and nervous Nellies, using mechanical set-ups like this one. ______ UPDATE (Feb 23, 10:14 p.m.): The little sonofabitch exploded higher on the opening bar tonight, recording a peak at 1684.10 that missed my longstanding target by just $6.10. How could you have exited on the fleeting spike? Check out my posts Sunday evening in the Trading Room for the simple secret of the 'dynamic trailing stop'.

Bulls are in good position for another shot at Dow 30,000, not that anyone should have doubted they'd be back. Few could have foreseen, however, that their second-wave assault would come so soon. It was only last Friday that stocks were getting hammered on fears that coronavirus would take a toll on the global economy. It will, of course, but this has had little net effect so far on stocks that are constantly being pumped by giddy portfolio managers who are paid to throw Other People's Money at a small handful of high-profile stocks. Oil Traders Know Better Oil traders know better and have pushed quotes down into bear-market territory in response to the already significant curtailment of economic activity in China. Copper prices have fallen sharply as well, with the implication that the Fed may soon be battling deflation. Again. But with what? The interest rates the central bank controls are already too low to get much pop from easing. The alternative is prayer -- that China and the world are able to contain the virus quickly and convincingly. This can't happen too soon if U.S. stocks are going to sustain altitude. A short ascent to Dow 30,000 seems inevitable in any event, but there will remain the possibility that this historical benchmark could become the Dow 1000 of this era: very closely approached in 1966, but not exceeded until 17 years later.

Here’s an illuminating selection of subtleties, including a close look at two rABC winners that had gone out as recommendations the night before. One, a bottom-fishing foray in April Gold, produced a gain of as much as $2200 overnight for anyone who jumped aboard when I posted the advisory in the Trading Room around dinner time. The other, explicitly detailed in a fresh E-Mini S&P tout Tuesday night, nailed – within 1.00 point – a pre-dawn high that gave way to a 20-point pullback worth as much as $1000 per contract. The high was not exceeded until the final hour of the regular session.

Today's fist-pump through a clear midpoint resistance at 3291.00 implies the rally will continue at least to the pattern's D target at 3369.25. Your trading bias should be bullish in the meantime, although rABC entry set-ups may be difficult to come by if the trend goes uncorrected on the lesser charts as it did today. Since all vehicles seem to be pulling back from p2 these days, you can use the one at 3330.13 to get short, albeit probably not for long. Alternatively, a pullback to x=3251.88 would trigger a mechanical buy signal, stop 3212.50. The 39-point entry risk cries out for an entry set-up using a pattern of much smaller degree. Ask in the Trading Room for guidance if the opportunity gels. _______ UPDATE (Feb 5, 9:09 p.m. EST): Here's a chart with a lesser target at 3352.00 that has been slow in coming. The one at 3369.25 remains viable regardless. _______ UPDATE (Feb 8, 12:25 p.m.): I've hung out the yellow flag, since the futures should not have died last week a pathetic couple of inches from the 3369.25 target. The bullish argument would hold that they are simply consolidating for a thrust that will turn the target into suet. If that proves to be the case, we'll have opportunities to buy ahead of the move and to limit risk to bupkus. For now, though, let's hang back. I've recommended a short in SPX (instructions will appear in the touts list Sunday evening), but the index would have to fall 129 points to trigger it. _______ UPDATE (Feb 10, 9:04 p.m.): The futures were lunaticking higher Monday night, inexorably bound for the 3369.25 target flagged above. It's clarity is adamantine, suggesting it will repel the charge as though it were granite, but who knows?  The futures will probably

Today's fist-pump through a clear midpoint resistance at 3291.00 implies the rally will continue at least to the pattern's D target at 3369.25. Your trading bias should be bullish in the meantime, although rABC entry set-ups may be difficult to come by if the trend goes uncorrected on the lesser charts as it did today. Since all vehicles seem to be pulling back from p2 these days, you can use the one at 3330.13 to get short, albeit probably not for long. Alternatively, a pullback to x=3251.88 would trigger a mechanical buy signal, stop 3212.50. The 39-point entry risk cries out for an entry set-up using a pattern of much smaller degree. Ask in the Trading Room for guidance on this if the opportunity gels.

Bulls doubled down on their bet Monday that the U.S. will remain an economic island, unaffected by the spread of coronavirus. The Dow was up nearly 400 points in the early going, briefly recouping two-thirds of what it had lost on Friday. Have traders lost their minds? China, after all, was in a state of lock-down, with quarantines in many large cities affecting the mobility of scores of millions of people. The potential impact of this on the global economy was not lost on energy traders, who sent crude-oil quotes plummeting a further $1.50 a barrel on top of last week's nearly $3 loss.  This happened despite Saudi Arabia's threat to curtail supplies by whatever amount is necessary to prop up prices. When the dust settled, the Dow Industrials had gained a respectable 144 points, pushed by... well, let's allow someone from Wall Street who is paid to be an incurable optimist explain.  According to Michael Mullaney, director of global markets research at Boston Partners, U.S. stock investors may have seen Friday’s selloff as a buying opportunity. Mullaney, as reported Monday in The Wall Street Journal, noted that with past outbreaks, such as severe acute respiratory syndrome, or SARS, stocks have tended to drop initially, only to bounce back once the rate of new infections slows. “Once you see a slowdown in the uptick of new cases, historically the market has generally done quite well after that,” he said. Virus Deaths 'Slowing' Buttressing Mullaney's congenital optimism was a note posted in the Rick's Picks Trading Room by one 'Signfisher': 'The coronavirus death to case rate has dropped dramatically from almost 10% now down to about 2% which is a good thing. After this coming weekend hopefully these numbers will hold and even drop.'  Hopefully indeed. However, it seems most unlikely

Coronavirus anxiety has replaced trade war anxiety as the one-size-fits-all explanation for the stock-market's bad days.  Wall Street initially thumbed its nose at the virus threat, staging a strong rally early last week even as the death toll mounted in China.  But when a few cases turned up in the U.S. and airlines started canceling flights in and out of China, investors took notice. Their anxiety became manifest in Friday's 603-point decline in the Dow Industrials, and no one was suggesting the selloff was climactic. For unlike tariff anxiety, which rose or fell every time Trump tweeted on the subject, the path that coronavirus takes is unpredictable and could remain so until illnesses and deaths either start to taper off or become catastrophic. Will the stock market be able to bide its time, hovering somewhat beneath current levels, until the virus is better understood? That would be the optimistic scenario, especially since the economic fallout from coronavirus has already driven commodities, most significantly crude oil, sharply lower. This could spread more than mere ripples into the economy, since inflated oil prices underpin the global financial system's hyper-leveraged store of collateral. A Scary Place to Get Long From a technical standpoint, it is troubling that the Dow's seemingly invincible rally sputtered out without having reached the 29,757 target shown in the chart. This is close enough to the milestone number 30,000 that it should be considered magnetic. A case of 'close but no cigar'?  Wall Street would be forever shamed if the greatest bull market of them all were to die just inches from so obvious and compelling a target.  It will remain viable nonetheless unless the pattern's point 'C' low, 27,326, is exceeded to the downside. I should also mention that, under the rules of our trading system, the Dow