Rick Ackerman

Economic news turned menacing last week and featured a yield-curve inversion as well as a grim assessment of the slowdown in Europe and China.  It's tempting to think stocks were finally starting to show some common sense when they began Friday with a bearish gap, sold off hard for the next three hours, then closed on the low tick of the day after a failed rally. Contrition at last! It increased my already strong doubts that the powerful bounce begun on December 26 is destined for greatness.  However, it will have increased everyone else's doubts too, and that's why I am wary of sounding taps quite yet for the ten-year-old bull market. Mounting bearish sentiment is one of the most powerful things the stock market has going for it at the moment. As long as it continues, the potential for a short-covering rally, possibly even to new highs, will remain. This would surely be accompanied by more ray-rah hubris from The Wall Street Journal et al. about how unemployment is low, wages are rising, and economists are unconcerned about the possibility of a recession. If low unemployment actually meant something, then why is America's middle class struggling to stay afloat, in hock up to its eyeballs? Of course, if all else fails, we've always got the Fed to come to the rescue.  Yeah, sure. Sooner or later, the epiphany will dawn that we cannot borrow our way to lasting prosperity. For in fact, virtually every penny we've borrowed to sustain this transparently nutty idea and the illusion of good times will have to be repaid. A day of reckoning can be postponed, but it cannot be avoided.

It's tempting to think last week's high at 2866.00 (click on inset) will mark the final gasp of an exceptionally powerful bear rally.  If so, it will have occurred in a place where we might have expected Mr. Market to spring a nasty trap on bulls and bears alike. The latter would have thrown in the towel and covered short positions when the S&Ps broke out over the last two weeks above three descending peaks recorded last autumn.  As for bulls, they are probably still drooling at the prospect of new all-time highs, since the 2866 peak that preceded Friday's selloff came within 3% of that threshold. Both could be proven wrong, although it might take a few more weeks before we know for sure. Friday's cascade on Wall Street felt particularly scary because it came amidst an onslaught of downbeat news concerning the dramatic slowdown in the global economy.  Growth in Europe and China seems ready to plummet and take the U.S. economy with it.  There was also an unsettling development in the financial sector as borrowing rates on 90-day T-bills exceeded those on the Ten-Year Note. The last time the yield curve inverted was in 2007, just before the financial system and stock market crashed. A rate inversion has preceded every recession since 1975. A further concern was that yields on German bonds swung negative, begging the question of whether it's too late in the game for so urgent and desperate an attempt at stimulus to work. AAPL a Dead Duck Even if the global economy were to miraculously rebound, U.S. stocks still look like an insane bet at these levels. The geniuses who are paid absurd sums to throw Other People's Money at a small handful of stocks must be thinking the same thing -- that the

A rally target at 201.99 (see inset) is the end of the line on the daily chart. Although this Hidden Pivot resistance could eventually give way to targets as high as 271.39 on the weekly chart, we should be surprised if AAPL blows past this number without head butting it at least a few times. While none of the problems the company faced just a a few months ago have gone away or even diminished, this evidently hasn't discouraged investors from bidding the stock into a vertical parabola that has recouped 60% of the massive losses suffered in Q4. Investors are known to have short memories, and their forgetfulness has been abetted by a news media that seems always willing to feign amnesia when bullish market cycles demand it. So it is with Apple, and our trading bias should therefore be bullish at least until 201.99 is reached (or an alternative target at 205.25 that uses a higher B-C pairing). _______ UPDATE (Mar 24, 5:03 p.m.): As the week ended, the stock fell hard without having quite reached our 201.99 target. It's still in play, however, since, as you can see, Friday's losses did not much impact the impulsive bullishness of the daily chart.  For now, we'll put the target on hold while we monitor this pullback for more-persuasive signs of trouble. The first meaningful hint of it would come on a print below 187.87. _______ UPDATE (Mar 25, 10:41 p.m.): Sellers crushed the 187.87 'structural' support of a prior low, opening a path to D=181.72. Let's see if they have the moxie to get there. If they can close the stock beneath the red line on this chart, consider the target an odds-on bet to be achieved. _______UPDATE (Mar 26, 9:25 p.m.):  The stock has turned wacky, diving after opening

So much for the 2858.75 print in the E-Mini S&Ps earlier this week that I'd said might mark an important top.  Thursday's muscular short squeeze impaled this 'Hidden Pivot' resistance, leaving the futures above it at the close. It also put in play an alternative scenario I'd mentioned -- i.e., a move above 3,000. The chart shows a 'secondary pivot' at 3005.63 that can serve for now as a minimum upside objective. Just to be on record with the most-bullish-forecast-by-a-permabear, I'll also mention the 3235.25 'D' target of the pattern as a possibility. It would become an odds-on bet to be reached if the futures close for two consecutive weekly bars above 3005.  These numbers are not as precise as I would prefer, since the chart is stitched together from many contract months. But the targets should be close enough for us to get a confident read on trend strength if and when they are hit.

Urgent short-covering catapulted the future to within a single tick of the 2866.25 target shown in the chart (click on inset). Odds that this Hidden Pivot resistance will turn out to be the top of a bull market that just entered its 11th year seem remote, so we should assume that even if there's a pause or tradeable pullback from it, buyers will be back again soon and presumably bound for D2=2924.50 (also shown in chart). The pattern from which I've extrapolated these numbers meets my strictest criteria, so you should consider the targets and the various Hidden Pivot levels precise, reliable and useful.  A further implication is that a swoon to the green line (2776.00), however unlikely, should be regarded as a buying opportunity.

It has taken the futures fully two weeks to achieve an easy target at 1315.00, but because the move has gone on to exceed this Hidden Pivot resistance Wednesday night, the 1332.00 secondary pivot of the pattern shown can serve as our minimum upside objective for now. If it too is exceeded, 1349.10 would be in play as an odds-on bet to be reached. We ought not count too heavily on buyers to get there quickly, since this is gold, after all. But the sooner it happens, if indeed it does, the more bullish the implications.

Stocks whoopee-cushioned (click on inset) on word from the Fed that tightening is unlikely for the remainder of the year. "Interest rate increases could be on hold indefinitely," Powell said. “It may be some time before the outlook for jobs and inflation calls clearly for a change in policy.” Although the stock market's obligatory headless-chicken dance ended with the broad averages largely unchanged, it's surprising and not a little disappointing that shares didn't get more lift from the announcement. Some observers had expected the central bank to feint toward tightening, however cryptically, and so Powell's latest utterance should have produced a reaction of at least mild relief. At the same time the Fed Chairman was deftly managing our expectations -- the job for which he was hired -- the news media was doing its part to spin some front-page headlines in Wall Street's favor. A trade deal with China by "late April" was reported to be in the works, but this was just the administration's way of softening expectations and bending our patience toward an increasingly uncertain time horizon. And lest Boeing continue to drag on stocks, the fatal propensity of the 737 Max to plummet to the ground was being ascribed to a mere onboard-computer glitch.  There's nothing to see here, folks -- just a few lines of bad code. Southwest, United and American have decided to keep flying the plane in any event, but we doubt that passengers would be so gutsy if they could choose their aircraft. A market solution would call for carriers to implement a $100 surcharge for travelers who'd rather avoid the 737 Max. My money is on Frontier to lead the way on this.

Forcing a trade was bound to take more effort than usual, since this session was held an hour before a (dovish) FOMC announcement. We looked at the E-Mini S&Ps, Gold and Crude Oil and found things to do, including two trades that triggered and went on to produce profits. The mechanical trade remains the weapon of choice, especially when we are at war with tedium. Check it out if you want to add some useful tools to your arsenal.

Uh-oh. A couple of FAANG heavyweights rolled down hard Tuesday after failing to reach their respective Hidden Pivot targets. Apple shares had appeared bound for at least 190.33 when they reversed from 188.99 mid-day along with the broad averages. AMZN was well into a weeks-long, 220-point climb to a 1842 target when it turned tail and dove from 1784. Both stocks could find traction and resume their ascent before the week ends, and that is what I would ordinarily expect. However, because the E-Mini S&Ps reversed sharply precisely from a longstanding rally target at 2858.75, odds are higher that today's top could prove to be an important one. We should know soon -- probably by week's end -- but it is hardly encouraging that TSLA and FB were relapsing and seemingly primed to fall.