Rick Ackerman

VXX, a trading vehicle that tracks short-term S&P volatility, turns out to be pretty good at predicting market disasters. The chart shown made it possible for me to foresee December's avalanche, although not with the precision that the Hidden Pivot Method allows. Right now VXX is saying bulls shouldn't get their hopes too high following Thursday's 900-point reversal in the Dow. As powerful as the rally was, it would appear to be setting up another plunge that could be even worse than what we've seen so far. How do we know this? Simply by assuming that VXX will reach the 56.30 rally target shown. A volatility spike of that magnitude could only occur in a meltdown. VXX would need to climb a further 7.53 points to reach the target. To put that in perspective, Wednesday's 653-point selloff in the Dow correlated with a VXX rise of just 2.29 points. That implies the Dow would need to sell off perhaps 2000 points for VXX to hit its mark.  Admittedly, this is an apples-to-kumquats comparison, since I'm inferring Dow weakness based on an indicator that is tied to the S&Ps.  Even so, if VXX reaches 56.30 within the next several sessions, both the Dow and the S&Ps would have to be trading much lower. No Need for Plunge Protection Someone in the chat room thought he spied the Plunge Protection Team (PPT) at work when stocks went vertical in the final 90 minutes of Thursday's session, reversing a big decline.  Although the President's Working Group on Financial Markets, as it is formally known, exists, it seems unlikely they were finagling behind-the-scenes. Who needs a Plunge Protection Team when short-covering maniacs can do the heavy lifting for them free of charge or risk?

To properly judge the staying power of the rally, we should put aside its spectacular nature and focus, simply, on impulse legs. If you didn't know that today's surge was one for the record books, and if someone had told you the chart shown consists of one-minute rather than hourly bars, you'd be less intimidated by what has occurred.  We'd also know to hold the applause until such time as the surge exceeds a couple more external peaks, especially without pausing for breath. If we should see buyers exceed peaks #2 and #3 as effortlessly as they got past #1 today, we'd have more reason to infer that this bear rally is just getting started. Let's kick back for now and see what the next couple of days brings.

Finally, a bear rally worthy of the name! The Dow exploded for a record 1086 points on Wednesday, bouncing the proverbial dead cat nearly to the second floor. Adding a few more floors in the weeks ahead won't bring kitty back to life, but it will probably suffice to restore some hubris and bravado to the Big Con. We can be certain of one thing -- that wherever and whenever the rally peaks, it will set up bulls for their inevitable transformation into road kill. Mr. Market, so very felicitous now and then, will be revving up his Mack truck around the time Jim Cramer gives the all-clear and pundits are wondering how investors could ever have lost faith even momentarily. Right on Schedule Rick's Picks' recent track record provides encouragement for thinking subscribers will be properly warned before this occurs. For weeks, we've been telling them to stay glued to Apple shares, the better to determine exactly when the stock market's bullish turn would occur. Right on schedule, as it happened -- just as AAPL was bottoming Monday within 45 cents of a $145.66 target bulletined two crucial days earlier.  We reiterated our confidence in an email Tuesday night that was headlined 'A Last-Ditch Chance for AAPL to Turn the Tide'. Following is what we said. Judge for yourself whether it would have made you money, or at least kept you out of trouble: It’s hard to imagine AAPL not bouncing from the 145.66 target shown. (It was proffered here earlier as a minimum downside objective.) Monday’s plunge came within 45 cents of this Hidden Pivot support during the holiday-shortened session — close enough for us to infer that a bottom of at least short-term importance is in. If so, expect the stock to lead the broad averages higher

It's hard to imagine AAPL not bouncing from the 145.66 target shown. (It was proffered here earlier as a minimum downside objective.) Monday's plunge came within 45 cents of this Hidden Pivot support during the holiday-shortened session -- close enough for us to infer that a bottom of at least short-term importance is in. If so, expect the stock to lead the broad averages higher when trading resumes on Wednesday. This has been a risky assumption for the last two weeks, to put it mildly, since both AAPL and the broad averages have traded as though weighed down by mountainous supply. Rallies have stalled and then reversed punitively, while days that have begun with weakness simply grew worse. My gut feeling is that tax selling will keep pressure on shares during the final week of the year. If they are going to rally, however, the best chance to do so will be with AAPL, arguably the most important stock-market bellwether of them all, torqued for a rebound. If conditions look favorable before the opening bell on Wednesday, we'll look at expiring, near-the-money calls for a potential leveraged play. Stay tuned to the chat room if you want to stay on top of this opportunity, especially if you've never made money trading options.

The 2327.50 target shown is a slender reed to lean on, but it's all bulls have at the moment. It coincides with a downside target in AAPL that lies just beneath Monday's close, so we might look for the the two to sync up in the early going on Wednesday. A three-tick stop-loss is all it's worth if you bottom-fish, but the opportunity to do so will depend on how this vehicle greets the day. If the support is easily exceeded I have no alternative target to offer you at the moment -- only the inference that sellers could be ready to romp once again.

Stocks are supposed to play nice on Christmas Eve, but not this year. The Dow fell 653 points, setting a dubious record that could conceivably stand for decades. If there's a silver lining, it lies in the possibility that bulls are probably close to capitulating. Ordinarily we might expect that to take a drop of a thousand points or more in a single day. But considering the very bullish seasonality, it's possible that it will require less to bury correction bulls deep enough in the pit despair to flatline them. In any event, AAPL is due for an upturn at a robust-looking Hidden Pivot support at 145.66. That could provide the mood change that Wall Street so desperately needs, although there can be no guarantees.

I can offer a 2431.50 downside target for now, but it is a minor one, more suited to the needs of scalpers than to long-range forecasters. Regarding the latter, the chart shown is hardly a picture of good health. The breach of an important Hidden Pivot support at 2476.25 Thursday was modest, but it was still sufficient to imply that another big down-leg is coming once the futures have corrected current excesses. If 2431.50 evinces no tradeable bounce, take it as a sign that DaBoyz are not be eager to take a bullish stand as the week draws to a close. If shares are getting whomped and there is no short-squeeze rally in the final hour, my guess is that the Dow will finish down a thousand points or more. ______ UPDATE (Dec 23, 6:15 p.m.): Considering how badly the 2431.25 target (see above) and a 2432.75 midpoint support from a lesser pattern got crushed on Friday, odds of more slippage to at least 2357.50 are high. You can bottom-fish there aggressively if you've been short for at least a part of the ride south. Here's the chart.

I avoid letting crude futures sit for long on the list of touts simply because it's not fun. Although nailing NYMEX swing highs and lows is a piece of cake for Pivoteers, the moves are driven relentlessly by planted news stories about supply/demand that on any given day can conflict diametrically.  This game gets tiresome fast. Although I enjoy commenting on the forces that drive the vehicles we trade up and down, in the case of crude, what energizes it is a muddle of whatever claptrap the vested interests are putting out to the hacks in the news media. I exempt the Houston Chronicle from this indictment because its coverage of the energy sector is superb. But I challenge any trader to make money on futures swings merely by poring over the Chronicle's excellent coverage each day. Timely 'Saloon' Post If you are skeptical that technical analysis can predict crude's swings with ease and precision, check out Tuesday's discussion thread in the chat room beginning with an 8:20 post in the Saloon (use 'CLG19' as a search word if the material has been archived).  It was followed by a 14:37 post in which I aired a $46.01 bid for the February contract with a very tight stop at 45.87. Crude made its actual low -- a potentially important one, by the way -- at 46.11; but when it subsequently rallied 86 cents, I pulled the bid rather than risk becoming the hapless owner of sloppy seconds. I have no problem with Saloon and Banter Room regulars who want to discuss trade set-ups in crude futures, and I'll even go along with your ideas and be grateful for them if they seem promising. I posted the trade on Tuesday simply because it looked like lay-up; I will continue to do so

"Nothing goes to hell in a straight line, not even stocks." This time-tested piece of wisdom comes from Wolf Richter, editor of Wolf Street, by way of a headline on his blog. Richter is one of the more astute commentators on the financial scene, and his observation has obvious implications for a stock-market decline that is starting to seem relentless, particularly for investors who have chosen to ride it out.  So when will it reverse, wreaking vengeance on by-now giddy bears? Richter sees this happening early in 2019, when the tax selling that has intensified the market's weakness in recent weeks abates. He notes, however, that the plunge so far looks relatively modest when viewed against the epic rise of stocks since 2009.  You can see this graphically in the chart above. AAPL Due for an Upturn It colors my own outlook as well, as it may yours, because of the enormous amount of wide-open space beneath current levels. Indeed, the index has a great deal of room to fall before it might be expected it to pick up 'structural' support from a low near 1800 recorded early in 2016. That would equate to a drop of 39% from September's high of 2940. If the S&Ps were subsequently to rally and then fall anew, perhaps to  sub-1500 levels, it would not contradict Richter's observation about the path to hell; rather, it would simply stretch the popular imagination concerning how deep hell may lie. My technical outlook somewhat complicates the picture because I have weighted AAPL above all other stocks. It plummeted 15 points last week, to a low that fell an inch from the 150.63 target I'd sent out to subscribers before the move. This number is a 'Hidden Pivot support' -- one sufficiently compelling to imply that a tradeable