Rick Ackerman

We could know soon whether Trump's trade war against China has been worth it. Beijing has increasingly good reason to give way, since there are signs that the Chinese economy is starting to implode. GDP was recently reported at 6.2%, the slowest pace since 1992, and consumers have been hit hard by the devaluation of the yuan. Cheapening the currency may have kept exports from collapsing, but it has also made imported goods more expensive, causing a corresponding fall in the standard of living. If China buckles, it would validate Trump's initial, tactical assessment that the U.S. was in better shape to weather a trade war. That seems to be true so far, but if just a little more tit-for-tat were to topple the global economy from its pins, the victory will have been Pyrrhic.  While America's economy is outwardly strong, inflated prices for stocks and real estate have made it extremely vulnerable to a downturn. Europe's ongoing shrinkage could prove to be the catalyst, since it is occurring with interest rates at or below zero. The failure of the euro-zone to reverse this trend is certain to dampen Wall Street's exuberance whenever the Fed hints of easing. This is a hazard that undoubtedly has begun to affect investor psychology, and its potential to kill the bull market once and for all should not be underestimated 'Greatest Theft in History' In the meantime, unqualified support for free trade has been remarkably on the wane, even in so strong a redoubt as The Wall Street Journal. Like the rest of us, the newspaper's editors seem to have tired of China's sleazy business practices. An op-ed piece on Monday cited China's "aggressive exploitation of the global trading system that amounts to stealing from other economies."  Still more remarkable was tacit op-ed support

This ETF proxy for gold miners turned weak Monday even though bullion quotes were strong, warning of possible trouble ahead. Stochastic indicators on GDX's daily chart were also problematic, having generated three price highs since late June that have diverged relative to corresponding overbought peaks. I continue to hold 6th Sep 29/31 calls spreads, but bought 30th August 28 puts today as a hedge. Some subscribers may still have calls, since I explicitly recommended buying them two weeks ago. This was just before GDX took off, enabling anyone who did the trade to easily 'double out' or better. Please let me know in the Trading Room where you stand so that I can determine whether to post a tracking position. Regardless, as noted here and in the Trading Room, we are waiting for weakness to re-establish a long position with cheap call options.

Look for Monday's moderate weakness to accelerate toward p=2821.50, the midpoint Hidden Pivot support of the pattern shown. It can serve as a minimum downside objective for the moment, unless the news turns unexpectedly sunny overnight. The talking heads have been attributing recent weakness to the headlines of the day concerning the trade war, but Beijing's hardened stance toward Hong Kong protestors is starting to weigh on investors as well. We are surely living in interesting times, and U.S. stocks seem to have lost their resilience, as well as their ability to shrug off even the most appalling geopolitical news. They may get a breather if lurid stories concerning Epstein's Pedophilia Island start to commandeer space on the front page. _______ UPDATE (Aug 13, 8:29 p.m.): Today's Whoopee Cushion bounce looks bound most immediately for 2963.00. The mechanical buy at 2914.75, stop 2898.50, that I recommended in the chat room remains viable. Here's the chart. _______ UPDATE (Aug 14, 2:25 p.m. ET): If the 2825.00 midpoint support shown in this chart is hit today, the Dow would be down more than a thousand points. Regardless, 2825 is my minimum downside objective for the near term. Given the location of the August 7 low at 2823.25, a print near it could set up a nice 'CI' bid for bottom-fishing. Stay tuned to the Trading Room if you care. ______ UPDATE (Aug 14, 9:54): Hard to believe that bears, the little woosies, couldn't bully their way down to the 2825.25 midpoint support. We'll sit back for now while the so-far weak short-squeeze runs its course. _______ UPDATE (Aug 15. 9:10 p.m.): The futures found precise support at the 2825.25 pivot, but bulls will need to push this brick up to 2961.25 to turn the short-term technical picture bullish. That's equal to an

The futures ended the week consolidating Thursday's exuberant short-squeeze, but the weakness stopped just shy of triggering a 'mechanical' buy at 2913.25 (shown in the chart as a green line). A slow, gentle move down to the line Sunday night would take some of the risk out of the trade, and so I will recommend it, but only to those who need no further instruction concerning how to execute it. Initial theoretical risk on four contracts is around $750 per contract, so this one is not for dabblers. You could substitute the micro-contract, which carries a tenth the risk, but liquidity could become a problem. _______ UPDATE (Aug 11, 11:55 p.m. ET): It took just a few ours tonight for the trade to produce a gain of $725 per contract. This is not hypothetical, since a subscriber reported having done the trade. You should be out of at least half, but if you decide to swing for the fences, the target is 2956.50.  Above p2, a 'dynamic' trailing stop is advised.

If you watched the news last week, it was impossible to avoid getting a loud earful about mass shootings and gun-control. President Trump, as we might have expected, got blamed by liberals for everything but pulling the trigger. As this accusation grew increasingly shrill, then deranged, probably half of America tuned out the discussion. However, one particularly useful piece of information that stuck with me is something we can all do, starting immediately, to reduce the death toll: Run like hell whenever we hear shots. ​ This simple advice was proffered by a law enforcement veteran interviewed on Fox, and it is worth heeding. If you are in an enclosed space, he noted, that is where the danger will always be greatest, and so you should reflexively make a beeline for any pathway to the outdoors. If you instead choose to hide inside the building where the shooter is, that is courting death, said the lawman. And if your back-up plan is to appeal to the killer’s conscience when he finds you cowering under some table or counter, that is literally begging for death. When you are in full flight, however, running as fast as you can, odds of getting hit by a bullet decrease very significantly, he said. Bolt for an exit the instant you hear what sounds “like firecrackers.” By now, everyone should know that unless it is the Fourth of July, those sharp pops are more likely to be gunshots. ​                                                                              Concealed Carry More stringent background checks are coming, for sure, but it is predictable that the shootings will continue. Better to have your own plan of defense regardless of how the laws governing firearms change. The best solution, arguably, is one that liberals don’t want to hear: concealed or open carry. This

Uber shares are in the capable hands of world-class manipulators, judging from the way they powered the stock past a tidal wave of bad earnings news on Thursday. Calling these arse bandits "the smart money" doesn't quite do them justice. If they were in another line of business -- horse-racing, perhaps -- what they accomplished over the last day-and-a-half with Uber stock would be equivalent to winning the Kentucky Derby with a ten-year-old glue horse. Take a look at the chart, which shows after-hours trading as green bars. When news hit after the close that the company had suffered its largest quarterly loss ever, the stock plunged $5.62, or about 13%, in mere seconds. But it gained back nearly 90% of it almost as quickly and has since settled into a holding pattern around $40. Amazingly, that price is above where the stock was trading the day before the awful news hit. It is currently near the midpoint of Thursday's wild gyrations, whistling an Adele tune as though nothing had happened. Harry's Mythical Furniture Store Uber's business model is reminiscent of the National Lampoon comedy sketch about a mythical Harry's Furniture Store, where prices are so low that the store loses a little money on each sale. "So how do you turn those losses into profits?" asks the interviewer. "We make it up with volume!!" replies Harry. Uber similarly is serving up the same story, helped by a credulous press that never tires of hyping companies that operate on a grand scale, no matter what their prospects. Uber's CEO doesn't quite come out and say it, but they are just a $70 billion version of Harry's, with a vision of, if not profits, then smaller losses. "The company’s bookings are still increasing at an impressive rate," reported The Wall Street

Gold futures and GDX slightly exceeded important Hidden Pivot rally targets today, but this vehicle still has a little ways to go before it hits one. I've hauled out the long-term chart just so that whatever pullback awaits does not cause us too much anxiety. Even so, the midpoint (p) pivot at 43.73 will pose a crucial test for buyers. If they impale the resistance on the first try, that would be encouraging with respect to GDXJ's ability to achieve the 61.64 target eventually. It lies 47% above current levels, compared to a target in GDX that is just 25% away. Without attempting to reconcile this discrepancy, I'll note simply that it could mean GDX will top out at p2=52.63 while GDX goes on to reach D=36.67. We'll attempt to build a position in this vehicle on weakness much as we've done in GDX. If you're interested, stay tuned to the chat room for guidance in real time.

Assuming the short-squeeze bounce in the broad averages and FAANGs is about to get legs -- a possibility I've raised in today's The Morning Line -- bullion will be under pressure. The institutional chimpanzees who build and dismantle portfolios can only follow simple instructions that have a single theme. One such theme unfortunately is that when one is buying stocks, one is necessarily selling bullion. Adding to my newfound caution in gold (and silver) is that today's rally hit a Hidden Pivot target at 1515.60 that has been two months in coming. The slight overshoot is ostensibly bullish and would become still moreso if gold closes above today's high (1522.70) for the next two days. In any event, we'll see what surprises crop up before we draw any strong conclusions. _______ UPDATE (Aug 8, 10:34 p.m.): Gold held its own today with stocks on a mini-rampage. This seems bullish, but let's see how things play out ahead of the weekend. _______ UPDATE (Aug 11): Gold got little boost when the Dow was trading almost 300 points lower on Friday, so we should be prepared for bullion to turn weak if the broad averages reverse and rally. First, let's see how things open Sunday evening.

My world view is much too gloomy at the moment for me to become a wild-eyed bull, what with the tariff war, mounting recessions in China and Europe, a top in the U.S. housing market, a possible top in consumer spending, and market leadership vested in fewer than a half-dozen stocks. Even so, the 'mechanical' set-up shown in today's chart virtually screams to be bought. I mentioned the pattern earlier, somewhat incredulously, in connection with the Dow Industrials, but confronting it on the chart of a vehicle we actually trade is a little unsettling. There was $26,000 of initial risk in this gambit if four contracts were used, and we would not exactly be sighing with relief with a gain so far of just $2600 per contract. Regardless, we should contemplate this chart with a bullish bias and trade it accordingly, albeit as cautiously as possible. The midpoint pivot at 2993.75 is my minimum upside objective for the moment, but I expect it to be a very bumpy ride.  If any of you actually did the trade and there are at least two of you, I'd be happy to set up a tracking position. _______ UPDATE (Aug 8, 10:44 p.m.): Short-covering pushed this hoax to the minor target at 2936.75 shown here. The pullback so far has been shallow, suggesting that buyers will be back at 'em when the exchanges open for regular business Friday morning.