Rick Ackerman

Short-covering late in the session helped lift stocks off their intraday lows after Trump promised to produce a transcript of his conversation with Ukraine's leader. However, the bounce should have been feistier, given that the futures had stopped out a visually important low at 2958.75 recorded two weeks earlier.  A relapse therefore seems likely, and a close beneath the low would probably suffice to send this vehicle down to early September's lows near 2900 in search of support. Most immediately, if it hasn't traded above 2979.75 by 10:00 a.m., look for a slump down to 2954.25, the first place whence a bounce would be logical (60-min, A= 2009.25 on 9/24 at 10:00 a.m.). You can bottom-fish there with a stop-loss as tight as 2952.75. ______ UPDATE (Sep 25, 9:11 p.m.):  The trade caught the low of a 40-point rally within two ticks (!) and was an easy winner. The trampoline bounce generated a $600 gain in just ten minutes and by day's end as much as $1900 of profit per contract. However, only one subscriber reported having done the trade, and so I did not establish a tracking position. The rally looked strong on the lesser charts, but it'll need to hit 3010 to show evidence that new record highs are coming.

Trump has been leading the stock market around by the nose for months, but one of these days traders are bound to tire of playing Pavlov's dog to his tweets. On Tuesday, speaking before the United Nations, the President had an opportunity to score a few points with China ahead of trade talks set to resume in October. All he had to say was that he is that looking forward to striking a deal that would be win-win, and that Xi Jinping wants this as much as he does. Instead, with the eyes of the world on him, he repeated the the well-worn trope that the Chinese are sleazeballs who can't be trusted. True enough.  But in the make-believe world of diplomacy, telling little white lies -- or even big ones if needed -- is the key to progress. Scorched-Earth Politics Stocks dove as they always do when ostensibly bearish trade news hits the tape. Someone in the Rick's Picks trading room commented at the time that Trump would probably make nice with a tweet Tuesday evening that would send the S&Ps back up above 3000 overnight.  So far, though, this has yet to happen. Stocks did recoup some of their losses late in the day, however, because of a separate development involving impeachment-crazed Democrats. Their latest excuse for pursuing scorched-earth tactics has focused on Trump's supposedly withholding aid from Ukraine while he pressed the country to investigate Joe Biden and his son. Trump said he would provide an exculpatory transcript of a key conversation he had with Ukraine's leader, and that was all traders needed to hear to bounce shares off their lows. This game undoubtedly is starting to wear on investors, and we therefore shouldn't be surprised if the stock market begins to fall for several days without

The markets have been challenging lately, to put it mildly. With the broad averages cavorting near record highs, investors are almost as nervous as they were when stocks plummeted in May and then again in late July/early August. The technical tea leaves have seemed tougher than usual to read, let alone exploit.  Rick's Picks frequently advises a tactic called a 'mechanical' entry that is designed to initiate trades at times when one might ordinarily be too scared to pull the trigger. Gold futures and the E-mini S&Ps both triggered 'mechanical' buy signals recently that were properly scary. The trouble is, they were too scary even for a trade that is supposed to be scary. Both vehicles ultimately turned up from lows that were within a hair of stopping out bulls. This is how Mr. Market thwarts and deceives even those who 'know' what he's up to. Gut feelings at times like this are no better than flipping a coin. The good news is that no one forces us to trade.

GDX ended the week strongly on the upswing. I've been eager to stock up on call options ahead of the next big move, but we'll be better served attempting this on weakness. Gold itself is still in a corrective pattern, and although the futures could break out as early as Monday, chasing gold above Friday's highs looks like an unnecessarily risky bet. Straddles have been getting hit hard lately, suggesting that unhedged calls may be the best way to go when the next buying opportunity comes. For now, though, use the 29.03 midpoint pivot as a minimum upside target. We should also be alert to the possibility of a 'CI' short developing. If Friday's 28.69 peak holds, a sell signal would trigger at 28.17. _______ UPDATE (Sep 23, 5:19 p.m. ET): GDX gapped up on the opening and continued higher, leaving timid bulls choking on dust. I will formally recommend trades here to get long only on weakness, but you should tune to the chat room for serendipitous intraday call-buying ideas if that works for you. My 14:31 post in the Coffee House was an example of this. _______ UPDATE (Sep 24, 9:34 p.m.): Weakness on the opening bar demonstrated once again that selloffs in this vehicle are to be regarded as a buying opportunities. My immediate target remains 29.99, posted mid-day in the Coffee House (30-minute, A=27.86 on 9:20 at 12:30 p.m.).

Although gold ended the week on an upswing, this occurred within the visual context of the corrective pattern shown in the chart. The pattern's A-B impulse leg is formidable, and that's why we shouldn't get too excited about the approximately $30 rally that has unfolded since the futures bottomed at $1490 last week. Note that that rally has generated a somewhat enticing 'mechanical' short at the green line (1513.70). We ignored it nonetheless because it was a risky bet to have taken home over the weekend.  Let's see what Sunday night brings before we act.  As of early afternoon, there were no disconcerting geopolitical developments that might send the markets into spasms.  Iran's Houthi proxies were threatening another attack on Saudi oil facilities, but that will have registered only dimly on Wall Street's go-go trade desks. _______ UPDATE (Sep 23, 5:52 p.m.): The futures have turned sharply from within a hair of stopping out the bullish pattern with a 1622.90 target first identified here nearly six weeks ago. For now, use its 1555.90 midpoint pivot as a minimum objective (and not for the first time, either). _______ UPDATE (Sep 25, 9:27 pm.): The futures were in a so-far feeble bounce Wednesday night after getting socked for a $23 loss intraday. The rally began in a too-obvious place just above some minor lows from last week, raising the odds of another swoon to put in a good bottom.

The hubris surrounding Stripe’s steep move up the venture ladder is a sad commentary on today’s financial scene.  The company, whose name is not exactly a household word, processes online payments. It was valued at $35 billion in a recent fundraising round, notwithstanding the fact that entry barriers to competition are almost nil. Lyft, for one – among Stripe’s biggest customers – is considering processing its own payments. Checkout.com and a score of other startups are making inroads as well. To give you an idea of how absurdly out of whack Stripe’s $35 billion valuation is, compare it to that of Rivian, a company that actually makes things. They’ve just received an order from Amazon to deliver 100,000 (!) electric delivery vehicles starting in 2021. Rivian’s current valuation is around $3.5 billion, a mere tenth of Stripe’s. That is the ‘penalty’ for producing real goods and getting one’s hands dirty as opposed to hiring a bunch of coders to create digital widgets. For further comparison, Humana, Hitachi and eBay carry valuations roughly equal to Stripe’s, while Allstate, Newmont Mining, Hilton, Mitsubishi Electric, Tyson Foods, Nissan and General Mills are smaller. Someone ought to teach these dinosaurs how to make digital chickens, hotels, cereal and automobiles if their owners want to be billionaires. What's Customer Service?? Stripe’s goals include issuing corporate credit cards and offering a variety of financial services besides payment processing. Sound familiar?  I am a Stripe merchant customer myself and regard the service as no better or worse than others that I use, including PayPal. Compared to old-fashioned banking, I would give Stripe a C-minus.  Unfortunately for customers, Stripe’s founders are too young to know or care about customer service. Like nearly all online businesses founded and run by millennials, Stripe has made it extremely difficult to reach

The futures tripped a 'mechanical' buy signal when they sold off Friday afternoon, but they subsequently failed to get airborne. The yellow flag will be out Sunday night because of this, even though the buy signal remains theoretically in effect. A bigger picture shows that last week's modest gains fell slightly shy of record highs. Stocks are in dangerous territory, with traders undoubtedly sharply divided over what is likely to happen next. We needn't share their anxiety, however, as long as we reckon the odds based, simply, on impulse legs in various time frames. Stay close to the Trading Room for timely guidance. _______ UPDATE (Sep 23, 6:01 p.m.): The 3042.25 rally target given here earlier remains viable, having survived Monday's swoon toward the pattern's point 'C' low by 1.50 points. Use p=3011.50 as a minimum upside objective for now. An easy push past it would shorten the odds of a follow-through to 3042.25.

[I am leaving this essay up over the weekend to increase its exposure. RA] The Fed's so-far $128 billion intervention in the repo market slipped off the Wall Street Journal's front page Thursday evening, hardly a concern. Don't be surprised if, years from now, the squeeze on short-term borrowers that caused this flurry of excitement is recalled as an early warning sign of the banking system's coming collapse. On Tuesday, there simply weren't enough dollars to keep short-term loans rolling.  This implies that the dollar short-squeeze I first wrote about in Barron's and the San Francisco Examiner more than two decades ago may have begun. This time the Fed handled the problem without breaking a sweat. The next time, however, the cost might run into the trillions. Which is to say, more funny money than the central bank can gin up on short notice. When this day of reckoning comes, the banks won't open the next day, nor will credit card transactions clear. Although there is no way that even a prudent person can completely protect him or herself from the fallout, it seems likely that those who hold Treasury paper and bullion as insurance will fare better than those who don't. A Curious Thing Regarding the run on repos, it is curious that a dollar shortage developed in one specific market at a time when dollars remain almost inexhaustibly available in so many others. Mortgage money is not tight, nor are 0% teaser loans for any credit card holder who is not in prison. Big companies have no trouble borrowing billions of dollars to buy back their shares. But borrowers in the repo market? They are potentially like short sellers of a stock that has suddenly become unavailable.  Which is to say, they will be dead ducks on that

A wild and wacky day, for sure. Traders are supposed to love volatility, but who among them could have captured the dollar opportunity in Wednesday's fearsome machine-driven swings after the Fed announced what everyone on earth had expected. The initial feint was lower, and it suggests that traders were at first disappointed that the Fed had not eased by 50 basis points rather than 25. But by day's end they seem to have figured out that a 'mere' 25 basis points was no cause for despair, especially since they can be certain more easing is coming. For now, use the 3042.25 target shown as a minimum upside objective. You can also use a pullback from our 'sweet spot' to initiate a mechanical buy at the green line. If you catch a ride, use a piece of your profits to cushion a tight stop-loss for a short from D=3042.25. ______ UPDATE (Sep 19, 5:20 p.m.): A pullback to the green line at 2996.00 (see inset) would trigger a mechanical buy, stop 2980.50. Initial risk is $775 per contract, so this one may not be for everyone. It will work best if the bid is hit overnight Thursday or early in Friday's session. _______ UPDATE (Sep 20, 8:32 a.m.): The pullback to the green line (2996.00) occurred  at 4 a.m. and produced a profit of as much as $1400 by noon, when the subsequent rally topped at 3024.50.  The 3042.25 target of the same pattern will remain valid unless C=2980.75 is breached to the downside. Several subscribers reported having done the trade.