Rick Ackerman

DaBoyz are nothing if not risk averse, and so there will always be days like Wednesday, when the short-squeeze thrusts they use to force stocks higher will pack barely enough energy to lift a feather. That describes the session's soporific price action, an inside day that left a 2760.25 target unchanged as our minimum upside objective. (Note: That's slightly higher than the number given here earlier because I've moved an erroneous coordinate.)

There are two things to note here: a possible buying opportunity in VXXB that could materialize within the next 4-6 days, and a ‘camouflage’ short that we forced in the E-Mini S&Ps. Regarding the latter, we resolved to initiate a trade come hell or high water. Conditions were as poor as they get, since the broad averages and most stocks were trendless and oscillating within a very tight range range. The rationale for the trade was rules-based, as you will see, but it took horse-sense to formulate a plan. Just after the session ended, ES dropped to deliver a nice profit at the higher of two targets we’d calculated.

We'll bleed from the ears if Wall Street's bull-market shills amp up the hype any louder. Consider this brazen bit of flackery masquerading as news Monday at YahooFinance.com:  "A Morgan Stanley...analyst sees huge upside for Apple stock based on the tech power’s ability to roll out new services in 2019, which includes its streaming TV platform that aims to take on Amazon and Netflix."  Ahhh, just what TV-watchers so urgently need: a brand-new player to offer us yet more shows, each accompanied by enough in-our-faces marketing to convince us it is worthy of our time. Let me save you a dozen precious hours, lest you be fooled into thinking the latest overhyped offering from Netflix, Russian Doll, is the "brilliant black comedy" proclaimed by one giddy reviewer. Brilliant it ain't. But don't trust my taste. Try watching the first episode and judge for yourself. A Bidding War Nor does throwing huge sums of money at "content" guarantee brilliance, let alone create shows that are entertaining and that attract large audiences.  And therein lies the problem for the biggest players in the streaming world. Netflix paid comedian Chris Rock a reported $40 million for two TV specials. What will it cost Amazon, Disney and HBO to one-up them? And even if they succeed, can they make enough money at it to pay the talent and retain sufficient profits to justify the rich earnings multiples that entertainment companies currently command?  It's doubtful. Netflix's competitors, far from licking their chops, are undoubtedly fearful of escalating a bidding war that is already coked-up on hubris. If the top is not already in, it soon will be.

DaBoyz are putting most of their energy and effort into a relative handful of institutional favorites (aka  "lunatic stocks"), including AAPL, BA, FB, NKE and GOOGL. The goal of the stock market's masters is to waft the broad averages higher using short-covering for fuel, and to distribute as much stock as they can ahead of the next big downdraft. They've been quite successful at it so far, producing a record-breaking January. How long can they keep it up? For at least another 400 Dow points, assuming my forecast for the E-Mini S&Ps pans out. Currently trading for 2717, they look bound for a minimum 2759. This might not prove to be the top of the bear rally, but it could stop the buying spree long enough for us to squeeze off an opportune short.

A chaotic swirl of geopolitical news has made crude an extremely difficult read at the moment --the perfect time to cut to the chase with a single revealing chart (see inset). It shows an uptrend likely to continue to at least 58.76 over the next 7-10 days, so plan accordingly. Because the A-B impulse leg is not of the highest quality, I can't guarantee the target will work perfectly. However, it should come close enough to nailing a tradeable high to allow you to use a stop-loss as tight as 0.15 to get short. The trade is recommended only to those who have made at least $800 on the way up. A pullback first to the green line (52.94) would trip a not-very-enticing mechanical buy signal, stop 50.99, but it could be converted to a less risky 'camo' set-up if desired.

HUI, the Gold Bugs Index, is close to triggering its first buy signal on the weekly chart in more than two years.  The first proved to be a dud, and it sent this popular trading vehicle into a ratcheting downtrend that would have driven most bulls to the edge of despair.  As a result, skepticism toward the current rally undoubtedly is high. But traders should be prepared  for a pleasant surprise if it touches 177.73, where the buy signal would occur (see inset). At that point we would raise our sights to a 224.34 'midpoint Hidden Pivot' as a minimum upside objective. It is associated with a target at -- better sit down for this -- 317.56 that presumably would usher in a new era for the mining industry. Can you picture a geologist as Time magazine's Person of the Year? Outside of the world of gold bugs, these companies have gotten precious little respect or attention since bullion topped more than seven years ago. This could be about to change.

Facebook's crazed leap last week died within a hair of the 171.25 target (see inset) disseminated to subscribers when the stock was $20 lower. Although we followed through on a plan to buy put options when FB kissed the target, the anticipated pullback was so labored and weak that we were happy just to scratch the trade and wait for the next juicy shorting opportunity.  And it will surely come, since the company's troubles are not going away simply because earnings are still robust. The WSJ and other ray-rah news outlets tripped on themselves effusing over the record revenues announced last Thursday. But the Journal and its cheerleading cohort have a habit of focusing so intently on quarterly earnings that they often fail to see a bigger picture that in this instance portends increasingly difficult times ahead for Facebook. In case they hadn't noticed, Facebook CEO Zuckerberg is at the top of the hit-list of a growing number of critics who see social media as a bad deal for everyone but its purveyors. As one of them astutely noted, if the service is free, you are the product. Deft Evasions Zuckerberg's smarmy condescension toward critics, most memorably on Capitol Hill and in front of EU regulators, has become legendary, as have his deftly worded evasions.  The pols are so used to getting stonewalled that his bamboozling brand of doublespeak comes across as refreshing and ingenuous in comparison. He got prime space in the WSJ last week to go on the offensive with more bullshit: "We need your information for operation and security, but you control whether we use it for advertising." Yeah, sure. An apology it wasn't. Zuckerberg only apologizes when security has been breached in a big way, or when Facebook has embarrassed itself in sundry other, appalling ways.

I flagged a rally target at 1810.47 last week that put AMZN on a 'mechanical' buy signal at 1646, stop 1591. The new chart shows a somewhat higher target at 1845.99 with a buy trigger at 1654.54. The latter trade was signaled on Friday and slipped well beneath the water line before the close, but the signal itself is no less impressive for this. We can paper-trade here or use 'camouflage' to get aboard using real money. However, if the gambit works out like so many other mechanical trades we've done in the past, it will demonstrate yet again that fearsome, violent price action is where the mechanical entry performs best.  The ostensible reason AMZN sold off was a Q4 earnings report with a few dark spots, but they seemed calculated to part widows and pensioners from their shares at fire-sale prices. I've been bearish on the stock market and AMZN but am less so at the moment because of the contrived viciousness of Friday's selloff in this stock._______ UPDATE Feb 6, 5:43 p.m. ET): Liftoff is taking way too long, making the mechanical trade more labor-intensive than we should prefer. If it pans out anyway, we can file it under "Mechanical Miracles," but let's not devote much more attention to it in the meantime.

AAPL looked quite impressive last week. Buyers pushed above a shelf-like 'external' peak from mid-December, refreshing the bullish energy of the hourly chart. And now, how high would the stock have to go to make this short squeeze look capable of achieving new all-time highs above $233? My gut feeling is that it would take a push exceeding the 184.94 peak shown (see inset) to do the trick. That would plant a seed of fatalism in the minds of bears, your editor among them, who expect the rally to fizzle out any day now. I won't pretend to have a crystal ball, and can only suggesting monitoring AAPL's progress, or perhaps lack of it, relative to the peaks shown in the chart. _______ UPDATE (Feb 7, 10:45 p.m. ET): The stock rolled down hard after a rally in the first hour failed to exceed any prior peaks. The weakness would not threaten the still-bullish look of the hourly chart, however, unless it takes the 165.93 low recorded on Feb 1..