Rick Ackerman

Stocks were weak all day, but bears were too timid to deliver the haymaker. The Dow Industrials dropped 133 points, but if sellers had meant business the way they did in December, the blue chip average would have been down at least 500 points. Permabears shouldn't give up hope, though, since it looks like the dam is about to burst. The evidence can be found in the failure of some key stocks controlled by institutional buyers to reach clear rally targets sent out to Rick's Picks subscribers over the last couple of weeks. Boeing: Uh-Oh! The most telling example is Boeing, a lunatic-powered, sunny-story stock that has been in a nearly vertical climb since Christmas. A week ago it was on track to hit a Hidden Pivot target at 454, a prospect we we'd planned to leverage with some call calendar spreads. The trade never had a chance to ripen, however, because BA turned sharply lower from 446 last Friday. The target is still valid in theory, but as a practical matter out-of-the-money put options are looking more enticing. Rallies that fail well shy of our proprietary targets tend to accelerate to the downside. Indeed, that is what we should expect in the days ahead, so buckle your seat belts.

This session offers a smorgasbord of tactics, including an option bet that required some calculations. Although we found no good excuse to pull the trigger, there were several set-ups taking shape that could prove valuable. I’ll note that the most promising of them – bottom-fishing at a midpoint support in the E-Mini S&Ps – stopped out the trade for a small loss later in the day. As you will see, however, the outcome did not catch us by surprise.

David Stockman's new book could prove to be a very timely read. The title leaves no doubt what it's about: PEAK TRUMP: The Undrainable Swamp And The Fantasy Of MAGA. Could he be onto something? In my view, Trump's fall could come not merely because Congressional Democrats are investigating nearly everyone in his past and every business deal he has ever made. No, that has become pretty routine, and probably half the country has tuned it out completely. What seems even more threatening is the possibility that a recession that has been brewing for years will hit, critically undermining the President's most credible and laudable claim -- i.e., that he has been great for the economy. For the moment, however. with the stock market poised to make new record-highs, the danger of a Trump implosion is relatively low. But if and when Wall Street's exuberant, ten-year celebration tops out, it is going to bring these relatively good times to a wrenching end. This is very likely in my view, even if stocks are about to move into record territory. That would only set the hook for the most destructive and painful bull trap in recent history. A Big, Fat Bubble Stockman sees Trump as particularly vulnerable -- as handing his head to his enemies on a platter -- "because he has bombastically embraced the 'big, fat, ugly bubble' that he so accurately harpooned during the campaign." Just so. Here's a link to Stockman's book promotion and a subscription to his daily commentary, Contra Corner. I've never marketed anything here before except my own service, but I happen to agree with his thesis and wanted to bring it to a wider audience.  Read it and see for yourself why we should all be bracing for the worst.

Today's chart takes the long view while lending authority to the possibility that the crazed leap from late December's lows has been just a bear rally. It would have to surpass 'external' peak #2 to qualify as impulsive on the weekly chart, and we shouldn't presume in the meantime to know how things will turn out. (Full disclosure: I hate the market so much that even if the S&Ps were to hit new all-time highs, I would still be very suspicious of a bull trap.) However vexatious the long-term charts might be, getting the lesser charts precisely right is as easy as shooting fish in a barrel. Accordingly, I'll recommend bottom-fishing p=2773.75 (corrected) with a 2774.00 bid, stop 2772.75 stop-loss. The order can stand only if the futures have traded no higher than 2799.00. On the 15-minute chart, you can find the pattern starting with a=2818.00 on 3/4 at 9:45 a.m. _______ UPDATE (Mar 6, 8:44 p.m. ET): The trade was stopped out for a theoretical loss of $62 per contract when a clear and compelling midpoint support showed no resistance to the downtrend. This means the futures are now very likely to fall to at least D=2748.50. However, the descent has been tortuously slow and choppy, so I'll suggest moving to the sidelines. It is surprising that bears were unable to bury this vehicle Wednesday, since there seems to be almost no buying interest other than from short-covering bears. Here's the chart. _______ UPDATE (Mar 7, 10:23 p.m.): As anticipated, the March contract fell to 2748.50 -- but not much farther. Buying power is still practically nil, but bears are evidently too enfeebled to seize the advantage. We'll plan on sitting out Friday's 'action' unless something interesting develops. ______ UPDATE (Mar 8, 9:55 a.m.):  Looks like yet another day

Some attributed Monday's stock-market volatility to nervousness over trade talks, but if China had anything to do with the day's moderate losses, the more likely cause was a report that economic growth there is running at the slowest pace in three decades. This could conceivably be bullish for NYSE stocks, since, with Europe's economy also swirling down the dumper,  the U.S. is the only game in town. Whatever the case, I would not suggest loading up on call options ahead of the "big" news still to come on tariffs.

Monday's vicious shakedown was poetry in motion. An hour into the session, stocks were falling so hard that you might have thought the world was about to end. Far from it, as suckers who sold into the avalanche were soon to discover. DaBoyz had laid the groundwork for Monday morning's crime spree by goosing shorts the night before. This caused the E-Minis to gap 13 points above last week's highs, putting bears back on their heels. The perps then spent the next 16 hours distributing stock at prices above the highs before pulling the plug.  Had they been child molesters -- and I mean no insult to pederasts in comparing them to traders -- they could not have had more fun if they'd had free run at an orphanage. Buyers Couldn't Wait The purpose of the distribution was to get the pros sufficiently short to provide some buying power when stocks fell. But they evidently couldn't wait until Tuesday, let alone until later in the week, since urgent short-covering commenced a little more than halfway into the session. You can see the results in the chart (inset). The squeeze recouped nearly half of the day's losses, presumably leaving bears sufficiently anxious to keep stocks buoyant on Tuesday even if a few real sellers show up. We'll be neutral at the bell, since the futures even at their lows failed to exceed the two prior lows we require to generate an impulse leg. A weak one is all we got, suggesting that another round of punitive selling is no more likely than a rally toward new all-time highs.

The new week has begun with a bold short squeeze Sunday night that looks capable of reaching the 2833.25 target sent out earlier for the E-mini S&Ps.  It is nearly identical to last Sunday night's short squeeze, but somewhat stronger than the one the Sunday before that. (Do you see a pattern here?)  Last week's goosing petered out shortly before noon on Monday, so we should be especially careful about getting sucked in if the futures seem impressive two-and-a-half hours into the day. If they are able to close above the target, take it as a sign that the 2851.75 target of a larger pattern noted in the latest ES tout is well in play.

Elon Musk is a much-bigger-than-life kinda guy, but in his knock-down, drag-out battle with the SEC's Goliath he is still just David. Last week he slung a rock at the giant's face with a tweet implying Tesla would make half-a-million cars this year. What he'd meant to say was that current production was running at that pace. Although Musk tweeted a correction a few hours later, the regulators were already so incensed that they threatened action that could remove him as CEO. Musk has been on a short leash, having agreed not to tweet anything before clearing it with his board. He didn't, and that's what has riled up his "probation officers" at the SEC. They've asked the court to punish him, but they had better be careful what they wish for. Although the SEC cannot appear to be doing nothing about Musk's flouting the terms of his court agreement, neither can they afford to hobble Tesla so badly that shareholders suffer grievous losses. All of them undoubtedly are aware of TSLA's extraordinary risks, and they would not have flinched at Musk's recent, innocuous tweets. The SEC knows this, and so their eagerness to knee-cap Musk just to save face smacks of overkill. Eliminating Dealers Rogue tweets aside, the real news concerning Tesla is that it is seeking to bypass dealers by selling all of its cars online. The auto manufacturer will offer a seven-day return policy, and the sales process supposedly will take just minutes to complete. Will customers be willing to shell out $35,000 for a Model 3 without a test drive or the helpful guidance of a salesperson? Musk evidently thinks so, but in any event, eliminating the dealer network will allow Tesla to sell Model 3 for $35,000 as promised while still having a shot at

Sellers drove the May contract down through two prior 'external' lows on Friday, seriously damaging the bullish look of the daily chart. The futures will have a chance to find traction at 15.115, a minor Hidden Pivot support, but we'll forego bottom-fishing there, since it's not a high-odds number. When the inevitable bounce comes, we'll be better able to judge on the next leg down whether this weakness is strong enough to erase the bull cycle begun from 14.100 in mid-November. ______ UPDATE (Mar 4, 6:25 p.m. EST): The downtrend slightly breached the 15.115 "hidden support," opening a path to sill lower prices. The futures would need to pop above 15.295 to turn the short-term picture bullish.______ UPDATE (Mar 10): Friday's surge hit 15.385, but it will take a tad more -- 15.400, to be precise -- to put p=15.470 in play as a minimum upside objective for the near term. Here's the chart. _______ UPDATE (Mar 11, 10:04 p.m.): Today's swoon changed the short-term picture, which is still bullish. The stall precisely at the 15.365 midpoint resistance has confirmed the pattern and its D target at 15.505. It would become an odds-on bet to be reached if buyers can push the futures decisively above 15.365. ______ UPDATE (Mar 12, 5:40 p.m.) Today's surge brought the futures to within a penny-and-a-half of the 15.505 target -- close enough for us to consider it fulfilled. Now let's see if bulls can push past it. It would take a print at 15.600 to refresh the bullish energy of the hourly chart. _______ UPDATE (Mar 13, 8:44 p.m.): Today's stab higher hit 15.550, but as noted above it'll take another nickel to generate a bullish impulse leg on the hourly chart. ______ UPDATE (Mar 14, 7:59 p.m.): Silver really sucks, doesn't it? But