Rick Ackerman

Sellers turned gutless Wednesday night after swinging a wrecking ball for most of the day. Shortly before midnight, index futures were trading moderately higher. Usually, prices move at night only when impelled by news that makes buying or selling over short stretches nearly riskless.  It wasn't news that sent the Dow Industrials plummeting nearly a thousand points over the last two days, however; rather, it was a negative drumbeat over the last several weeks that persisted for long enough to feed into a presumably minor bear cycle. I say 'minor' in respect of a forecast I made here earlier -- i.e., that the bull market would keep on chugging at least until AAPL, the key bellwether stock these days, ascends to at least 242.48. That's a $24 leap from here, equating to about 11%.  Although AAPL got slammed on Wednesday, it still closed above Friday's settlement price, showing the kind of resilience we should expect from a stock that portfolio managers revere above all others (save only Boeing, had the second 737 Max crash never happened).  Regardless of what AAPL does over the next few days, odds of the DJIA not falling to at least the 25,363 target shown (or alternatively to a maximum 25,280) are close to zero in my estimation. First, AAPL to $242 So confident am I that Apple shares will reach the $242 target in the next bull run that I have banished from my mind a long list of troubling economic developments in the U.S. and abroad.  But more bearish than any such factors is a political one: the perception that Trump is likely to lose the election. This idea has little force at the moment and is unlikely to gain in strength merely because the Democrats are intent on doing him in. Their tactics

"As goes GM, so goes the nation."  That was certainly true in the 1950s, when the statement supposedly was made by the company's CEO during Congressional testimony. But it is not even remotely true any longer. GM still matters, of course, just not much.  Striking workers have idled 30 auto plants across the nation for 16 days, which, believe it or not, is the longest such shutdown in nearly 50 years. At issue are pay and benefits for 46,000 full-time factory employees. We should wish them good luck. And their employer, too, while we're at it. As far as Wall Street is concerned, because GM makes actual things and employs men and women who get their hands dirty, the company might as well be manufacturing lavatory pucks. The financiers love companies with 'disruptive' business models that put everyone out of work. GM, unfortunately, is a conspicuous disruptee. The last of the dinosaurs. $100 Million Rounding Error The automaker supposedly is losing between $50 million and $100 million per day, but that's just a rounding error compared to the daily price swings in the shares of two glorified advertising agencies that portfolio managers cannot get enough of: Facebook and Google. GM shares are near the middle of a $20 range that has contained them for the last five years.  A glance at the chart suggests that unless the strike stretches on for another month or two, the stock will not likely fall more than an additional $1 or $2 before picking up structural support from a key low at 35.58 recorded on August 28. The company reportedly has $17 billion in cash to tide them over; workers are getting strike pay of $250 per week. Can you guess which will win? Careful, because that's a trick question.

The futures have consolidated sufficiently to be ready for another big leg up. However, a glance at the daily chart suggests bulls may need to be shaken out one last time before December Gold can get off the launching pad. From an rABC/CI-trade standpoint, the ideal 'C' low would occur in the very small space between September 18's 1490.70 low and August 13's 1488.90. You should use A=1490.70 to generate a green-line (x) trigger  (see inset) even if the point 'C' low winds up being slightly beneath 1488.90. Obviously, this trade is intended for experienced Pivoteers.  Don't hesitate to jump on it, though, if there is sufficient clarification in the Trading Room to make you feel confident about participating. _______ UPDATE (Oct 1, 12:35 a.m.): The rABC pattern has yet to trigger a buy signal but is still valid, albeit with a point 'C' low that would be well below 'counterintuitive' range. Assuming tonight's 1468.60 low holds, the trade would trigger at x=1481.80 (with a profit target of p=1494.90).  Please note that that would imply more than $5000 of theoretical entry risk on four contracts. _______ UPDATE (Oct 1, 11:12 a.m.): The rABC buy signal drum-rolled above triggered at 1478.70 and has quickly propelled the futures to within a hair of a profit-taking opportunity at p=1492.50. Sudden and sharp as the rally was, a stop-limit order at 1478.70 would likely have been filled, since the futures dipped back to 1478.70 a few minutes after breaking out above it. _______ UPDATE (Oct 1, 9:45): The futures have pulled back moderately after triggering the trade noted above and getting buyers to a profit-taking level at p=1491.30 (revised slightly). Several subscribers reported having done the trade and making money on it. However, I didn't establish a tracking position because the opportunity played out

[Updates will resume on Tuesday after sunset, when observance of Rosh Hashanah, the Jewish New Year, officially ends. RA] Readers rightfully took me to task last week for putting out two headlines that appeared to at least mildly contradict one other and which taken together could only have left one wanting more clarity. The first said Don’t Load Up on Puts Quite Yet;  the second, There’s Still Time to Load Up on Puts.  So which is it? Do we get short here, or not? Well, the answer, like the market itself, is more art than science and for me reduces to this: The bull's ten-year rampage has at least a little farther to go, but it can't hurt to nibble on put options now, just in case. Thus was your editor a buyer of DIA October 4 265 put options on Friday after pondering the chart above. It is one that I'd shared with you earlier but which I put aside in favor of an AAPL chart that looked more bullish.  It still does, and it leaves me quite confident that shares of Apple, a key bellwether for the bull market, are very likely to rise from a current 219 to at least 242 before the fat lady sings. That would equate to a rally of about 10 percent, which, if it occurs, would imply that the broad averages will remain buoyant at least until then. Formidable Wall of Worry Like many of you, I'm convinced stocks are a bad risk at these levels. Indeed, it is not difficult to reel off a list of good reasons why a bear market should already have begun. September is historically the market's worst month, and this year there were plenty of things to worry about when it commenced. For one, Europe is

It's no great stretch to imagine the December futures falling all the way to the 2811.00 low shown in the chart (inset) to test its support. More immediately, they seem bound for at least 2924.25, the bearish target of a gnarly pattern on the hourly chart (A= 3024.50 on 9/19; or alternatively D=2936.25, where A=3012.25 on 9/23). I will be observing the Jewish New Year and won't be in the chat room until Tuesday night, but I'd encourage you to use these patterns in the meantime to tame and trade this dervish. I bought a few DIA puts (October 4 265s) on Friday just to have a horse in the race, but I won't be able to add to the position after sunset Sunday evening.  You should consider it yourselves, though, laying in a small inventory of puts on intraday rallies. Don't bet big, since odds will always be against put buyers in a bull market that has endured for more than ten years. ______ UPDATE (Oct 1, 12:40 a.m.): Bears are once again on the run. They had better dive for cover if this gas-bag exceeds 2995.00. _______ UPDATE (Oct 1, 10:02 p.m.):  Today's plunge turned from within two ticks of a 2936.50 target posted by 'Bachus' in the trading room shortly before it occurred. The bounce so far has been feeble, suggesting still lower prices are coming. If so, use 2930.75, and then 2924.25 for targeting and trading against the trend. These pivots were calculated by sliding the point 'A' high to successively higher peaks on the hourly chart.

We've been monitoring Apple shares closely because they look very likely to rise at least 10% above their current $220 price before bulls are spent. AAPL is a powerful engine for the bull market, and a big rally in the stock would all but ensure that the broad averages get dragged higher or at least remain buoyant. The chart shows another reason why it may be premature to bet against the aging bull market, even if some key numbers for the U.S. economy, including most recently consumer confidence, have begun to weaken. Diverging Peaks Notice how the stochastic 'overbought' peaks recorded at the bottom of the chart rose in tandem with the Dow's price peaks. Together they effect a series of non-diverging tops, a formation that usually implies that the trend will continue.  Now notice how, when the stochastic peaks diverged relative to corresponding price peaks, the corrective moves that followed were steep and painful. If you're skeptical that the broad averages are capable of soaring to new highs with the global economy sinking fast, take a good look at the chart before you go aggressively against the flow.

We continued our experimentation with rABC trades on short-interval charts. Some of the trading vehicles we exploited in real time, including AMZN, will appeal only to high rollers who are looking for a quick in-and-out opportunity to bag their daily profit quota. But please note that the same trade set-ups are applicable using any $20 or $30 stock that suits your fancy.

So, impeachment proceedings are now bullish? But for whom? That question will likely hang over America until the 2020 election. In the meantime, it's possible the all-seeing, all-knowing stock market will continue to rally because investors anticipate a mellower outcome -- i.e. a vote to censure the President. This is not only a realistic possibility, it is probably how the matter will settle. That would give 'moderate' Democrats like Pelosi cover while sparing swing-state Democrats from having to vote for something so rancid as impeachment. Even if Trump did not break any laws, it seems clear that he did not act very presidential when he attempted to coerce Ukraine's leader into investigating the activities of a company on whose board sat Joe Biden's son. Ordinarily, the Democrats could push this one only so far, since the probe is certain to turn up sordid details that will enmesh Biden. But since that's exactly what they want -- to dump the poor schmuck -- the investigation will proceed at full speed. Because the basic facts of the case are already known or easy to guess at, the real spectacle will be in how the news media make fools of themselves as they unspool the story. We're betting that some New York Times sleuth will distinguish him or herself as no reporter from that paper has since Walter Durante filed fawning reports on Stalin while somehow overlooking the Great Purge.

I'd suggested buying on any weakness, but don't rush to load up on calls quite yet. We should be cautious because bulls failed at the top of this week's arc to surpass the 29.76 'external' peak shown in the chart.  Using it as the point 'A' high on the hourly chart yields a downtrending ABC pattern with a midpoint Hidden Pivot support at 28.00. That can serve as our minimum downside objective for the moment, but any lower would portend more slippage to p2=27.21. _______ UPDATE (Sep 29, 1:15 p.m.): Friday's low came within a dime of the 27.21 pivot mentioned above, but I wouldn't count too heavily on it for support. If gold's weakness continues into Monday, here's another view that should be taken seriously. The secondary pivot at 26.31 would warrant more-aggressive bottom-fishing than we might have attempted last week, but it is only near d=25.22 that you should consider backing up the truck.