Rick Ackerman

The short I detailed here yesterday never got close to triggering, but here's another: Get short if the futures fall to the green line, and use the red line (p) as a minimum objective.  I have not specified prices for either Hidden Pivot level because the rally could yet exceed the pattern's point 'C' at 2905.75, creating a new 'C'. The trade is based on the so-called rABC, or reverse ABC pattern, popularized by my mentor, the late Ira Tunik. However, the pattern had significant limitations for purposes of analysis and offered less-than-stellar odds for the trader. I am experimenting, however, to determine whether rABCs yields better results if two very specific conditions are met. My suggestion in the meantime is to paper-trade rABC-based recs until you are confident using them. I invite all subscribers to share their findings in the chat room. Please do so VERY sparingly, however, so that the discussion does not become cluttered with poorly developed, drawing-board ideas._______ UPDATE (Jun 11, 10:32 a.m. ET): Based on the so-far 2911.50 high this morning, the 'CI' short would trigger at 2870.19, stop 2912.00. Yes, that's risking $2100 per contract -- not recommended as a trade-out-of-the-blue, but for those who are in and out of ES actively.

Stocks took another bold leap Friday, heedless of payroll data that suggest U.S. employers pulled back on hiring in May across all sectors of the economy. Their clear concern is a global slowdown in China and Europe that appears to be deepening. Copper and crude oil quotes have signaled this as well with a 12% fall in the former and a 20% plunge in the latter. So has the Ten-Year Note, which is close to slipping below 2% for the first time in more than two years. Despite this, Wall Street was its blithely exuberant self on Friday, closing out its best week in months. The Dow tacked on 263 points, bringing the five-day gain to 1142 points. Not bad. But not good, either, since it was just reflex reaction to talk of Fed stimulus that can hardly be expected to prop up the economy while our major trading partners go down the tubes. A Capital Gains Kicker Are investors perhaps counting on U.S. stocks to attract increasing sums of safe-haven capital as the global economic picture darkens? If so, this promises to be a great bet until the day it isn't. Our advice is to lock in 2.57% returns on the 30-Year Bond while you can, since that rate could look pretty juicy when flight-to-safety money from around the world eventually panics into T-bonds, as it inevitably will. Were you aware that T-bond holders can rack up annualized gains of 20% or more when long-term yields fall hard? That's not bad just for playing it safe.

Today's chart is different from any I have presented here before because it emphasizes stochastic indicators rather than Hidden Pivots. The graph shows a potentially bearish divergence of price peaks relative to 'overbought' stochastic peaks. I say prospectively because the divergence would be negated if the futures were to rally above peak #1. In any event, the picture suggests that a very enticing 'counterintuitive' short could develop if ES were to turn down from a high close to, or even slightly above, peak #1.  If the downturn trips a conventional sell signal at X, go short there with the goal of taking a partial profit at p (which remains to be determined). The potential for any downtrend from near these levels to achieve 'd' is significant, since the stochastic divergence would act as a kind of turbocharger. _______ UPDATE (June 10, 9:26 a.m. ET): The 'CI' short noted above would trigger on a drop touching 2856.50. This is based on C=2898.00, the overnight high. This is somewhat above A=2894.00, but that would not diminish the turbocharger effect or the attractiveness of the trade. A resurgence above 2898.00, however, would. Here's the chart, which notes that a quick fall to the green line would give the trade a better chance of working.

On a take-no-prisoners rampage, the stock has bounced 12% since bottoming a week ago. This tripped a 'counterintuitive' buy signal at 181.72 that implies more upside to at least 193.18, the midpoint Hidden Pivot (see inset). However, AAPL would become a tempting 'counterintuitive' short if it falls exactly 5.55 points from any peak occurring between Friday's 191.92 high and around 192.70. That means the signal to get short would trigger at 186.37 if AAPL goes no higher than 191.92. Tune to the chat room for guidance in real time on put spreads that could effectively leverage a sharp relapse in the stock._______ UPDATE (Jun 10, 8:57 p.m.): AAPL easily achieved the 193.18 target given above. However, if the stock closes toward the lower end of its range on Tuesday, that could generate a stochastic sell signal.  Even if not, the short squeeze has gotten very overbought on the daily chart. _______ UPDATE (June 11, 5:43 p.m.): The stock looked no worse than neutral at the bell, although a close Wednesday at the lower end of its range would still tip the daily chart bearish. _______ UPDATE (Jun 12, 11:08 p.m.): The stock is doing a Wile E. Coyote, hovering over an abyss without visible support. We'll step away for the time being, since there is no percentage in guessing here.

Rates on the Ten-Year T-Note are positioned to rally in the way we might expect of a 'counterintuitive' trade set-up. Yields have come down to test the support of a 2.03% low made in 2017, and it should hold for at least a short while. But because the weakness of the last two weeks somewhat exceeded the 2.11% target we'd been using as a minimum downside objective, any bounce from these levels, or perhaps from slightly below 2.03%, is likely to be merely corrective of the larger downtrend begun last autumn. There could be a 'CI' trade in the offing (see chart inset), so stay tuned if you're interested. _______ UPDATE (Jun 20, 11:33 p.m. ET): Assuming the 1.97% low holds, a rally in yields to 2.28% would trip the 'CI' buy signal noted above. Here's the chart. ______ UPDATE (Jul 2, 5:43 p.m.): The rally in Ten-Year rates was short-lived and now they appear headed down to at least 1.944%. Any lower would put a 1.87% target in play.

We've been using the 1412.20 target shown in the chart to stay on the right side of the trend. It's not quite a done deal, however, because the rally pulled back to the midpoint pivot at 1325.60 for a day before getting second wind. This suggests, if not weakness, then a mild hesitancy. It will not likely prevent the futures from achieving D=1378.00, but we'll let price action at that 'hidden resistance' determine the odds of the higher target being achieved. Please note that a pullback to the red line would trigger a mechanical buy, stop 1308.10. A somewhat less risky bet would be to place our bid at the green line (1299.40), stop 1273.10. _______ UPDATE (Jun 11, 5:55 p.m. ET): If you bought at the red line (1325.60), exit half now for a profit of $560 per contract. Offer one of the two contracts remaining at 1347.30, o-c-o with a stop-loss at 1325.50 on two. _______ UPDATE: The rally has hit 1348.90 so far, allowing a profitable exit at 1347.30 on the third of four contracts (or multiple thereof) originally bought for 1325.60. The theoretical gain on this trade now totals $3290, plus an additional paper gain of $2170 for the contract still held. _______ UPDATE (Jun 14, 9:50 a.m.): I'm heartened to have heard from numerous subscribers who actually did the gold trade. At this point it's a straightforward play for 1412.20 on the final contract (or final 25% of your position). With a $6000 profit to cushion you, you can afford to give this one a generous stop-loss. An impulsive stop using the hourly chart would take you out at 1337.20.

The stock has trampolined off a low that fell well shy my 1599 target. If the wilding spree continues on Monday without dipping beneath the 1792.60 point 'C' low (see inset), the pattern shown, with an 1871.91 target, can serve as a template for initiating 'mechanical' longs. It could work for shorts too, but we should avoid getting in the way of the stampede until such time as it shows signs of fatigue. More attractive would be a classic mechanical set-up to get long following a pullback from above p=1832.26. That'll be our minimum upside objective if and when 1812.43 gets hit. _______ UPDATE (Jun 10, 9:13 p.m.): A rally target and recommendation to get short that I posted in the trading room at 11:52 caught the top of a so-far $25 reversal within a hair.  The stock could bounce briefly overnight or on the opening bell, but look for it to plummet anew when buyers are done.

Lyft's 25% rally off a post-IPO low of 47.17 demonstrates that there really is a sucker born every minute. They evidently have been lining up in droves to purchase shares of Lyft, which at best faces a long, treacherous path to profitability. A key hurdle is whether drivers for the digital ride-sharing companies are to be classified by the IRS as employees rather than contractors. If the former, the firms are fated to get trounced by independent operators banding together to provide all of the services that Lyft and Uber currently provide and a few more.  For your information, LYFT triggered an old-style 'mechanical' short Thursday at 57.85, stop 62.99, for a shot at 42.41. This is a riskier set-up than we usually trade, so I am advising it only for experienced Pivoteers. ______ UPDATE (Jun 3, 7:18 p.m.) Shorts are getting squeezed hard and would invalidate the 42.41 target if 62.99 is exceeded. That would not change my bearish outlook for the stock, although we would need to establish a new short position at a higher level. _______ UPDATE (Jun 5, 5:46 p.m.): Short-covering drove this gas-bag slightly above 62.99. Now, we can use the 62.99 peak recorded on May 3 to short the stock 'counterintuitively'. If it goes no higher than Wednesday's 63.24 top, the short would be signaled at 59.29._______ UPDATE (Jun 9, 6:15 p.m.): A two-day plunge triggered the short at 59.29 for a presumptive ride down to at least 55.33. I will track the position if I hear from at least two subscribers who did the trade._______ UPDATE (June 10, 5:04 p.m.): The 'counterintuitive' short is showing a $1000 theoretical profit at the moment on 400 shares. It has the potential to produce an additional $550 at p=55.33, and nearly $1600 more at D. I've

Trump needn't have wheedled the Fed about juicing the money supply, since the banksters, ever eager to ride to the rescue -- of themselves -- would have done it anyway. The central bank wizards and alchemists have once again begun to "manage" our "expectations" with all the subtlety of a carnival barker touting the Big Six wheel. Their loyal spinmeisters at The Wall Street Journal gave this latest feint toward QE a boost Thursday with the headline Fed Begins Debate on Whether to Cut Rate as Soon as June.  Debate, my ass. To merely hint of a rate cut is to commit to one irrevocably, since anything less would -- heaven forbid! -- disappoint investors. The policy debate ostensibly will pivot on whether 'trade tensions' warrant a shift toward easing. These are the very same tensions we've been reading about for nearly a year, and they were of such little concern as recently as a month ago that Fed chief Powell played down the possibility of a rate cut this summer. We knew better. Although the eggheads at the Fed would have us believe they use sophisticated tools to shape monetary policy, they are guided more by the stock market's ups and downs than by anything else. Thus did the Dow's 700-point decline earlier in the week evidently convince them it was time to intensify the managing of our expectations. We all know we are being played, but because the outcome is perceived as a win for everyone, the QE con-game cannot but work. But we might ask: Who actually wins when the Fed expands its balance sheet by purchasing public debt? Only an economic imbecile could believe that this epic charade can continue to provide us all with free lunch more or less indefinitely.