Rick Ackerman

Friday's wild swings only added to the clarity of the bearish pattern shown. It points to 1496.61, which would equate to an 8.6% decline from current levels. Because the downtrend penetrated the 1670.96 midpoint Hidden Pivot support with such force, we should infer that more downside to at least D is an odds-on bet. It also implies that a bounce over the next couple of days to the green line (1757.98) would offer an enticing opportunity to get short via a 'mechanical' signal at that price, stop 1845.01. Because the implied entry risk would be nearly $9000 per round lot, we'll look for alternative ways to get aboard.  Using a 'camouflage' set-up, for one, we might expect to cut the risk down to a theoretical $1500 or so -- or even less if we can substitute put options.

One step higher, three steps back. At this rate, it could take most of the week for December Gold to reach our aging target at 1254.10. Alternatively, if that Hidden Pivot resistance is brushed aside, look for a continuation of the three-week-old bull cycle to at least 1260.80. Expect a tradeable pullback from that number if it's reached.  Even if it were certain the rally will achieve 1254.10 or higher, it is not tradeable if risk:reward is held constant at the 1:3 ratio I always advise. That's because the $2-or-so additional theoretical profit possible at each new high is followed by a $15 swoon, effectively generating a risk:reward of 7:1._______ UPDATE (Oct 29, 6:36 p.m.): The 1226.00 downside target I posted in the Banter Room Monday afternoon caught the bottom of a so-far $6.60 rally within a single tick. Subscribers reported using the target to get long in the futures, but also in GLD, an ETF-based alternative. I will be spending more time in the Banter Room in order to pick up the tempo there. All subscribers are invited, but I have requested that anyone who visits the room -- as opposed to the chat room, which is attracting mainly lurkers -- post at least once per hour, or once per session if the post is actionable._______ UPDATE (Oct 30, 9:01): Gold is once again doing what it does best, disemboweling the faithful. The futures tripped a 'mechanical' short from 1227.70 that is doing nicely. Half should have been covered at p=1222.80, predicated on a 1212.80 target. Cover another 25% at p2=1217.80 against a 1232.80 stop-loss for the two contracts that remain._______ UPDATE (Oct 31, 9:07 a.m.): Because I have reverted enthusiastically to my gold-is-garbage mantra, it is a perfect time to be on alert to the possibility of a

Bears were hanging on the ropes and bleeding badly at the closing bell. Seconds later, their prayers were answered when AMZN released a downbeat earnings forecast for the holiday season. The futures fell 40 points over the next two hours -- less steeply than AMZN, to be sure, but still sufficient to activate the bearish pattern shown. It points significantly lower, to 2629.50, a 1.6% fall from current levels. Judging from the way sellers shredded the Hidden Pivot midpoint support at 2676.63, the futures look like a good bet to reach the target. Traders please note: A corrective rally touching the green line (2700.19) would trip a 'mechanical' short, stop 2723.75. _______UPDATE (Oct 26, 8:23 a.m.): The signal is valid only if the rally comes from our proprietary 'sweet spot'.  In this case it did not.

Easy come, easy go. AMZN stunned traders with a 135-point gain Thursday from the bombed-out depths of Wednesday's selloff. Then, after the close, the stock reversed steeply, shedding 180 points and sucking tens of billions of dollars from stock markets in the U.S. and around the world in mere minutes. A disappointing forecast for the holiday season triggered the avalanche, which has abated somewhat this evening, although presumably not for long. Analysts were left guessing about the reasons for the downbeat forecast, but higher pay for warehouse workers was cited by some. Google parent Alphabet (GOOGL) also missed estimates, crashing the stock 118 points, or 11 %, at the same time. The devastation in these two stocks will put the kibosh on the wilding spree that recouped nearly all of the previous day's huge losses. Evidence continues to mount that the bull market begun in March 2009 is over. If so, the transition from bull market to bear is going to produce some of the wildest price swings traders have ever seen. If what we've witnessed lately is just a warm-up for even more-extreme swings as seems likely, we're in for bumpy ride over the next couple of years._______ UPDATE (Oct 26, 8:16 a.m.): The 1584.66 target shown in the chart I sent out last night caught AMZN's low within less than $1.  The stock has since bounced $54. So much for the random walk theory.

This lesson continues my emphasis on trading with puts and calls, expanding our tool set with some closely reasoned bets on a day when stocks were volatile. I am pushing strategies that have been working for me personally. They are all very risk-averse, most employing spreads that give us effective odds of 8-to-1 or better on outcomes that are much more likely than that to occur. Linking our entries to well-defined swing points in the underlying stocks gives us a level of control that can add “edge” to every trade.

It may have felt like stocks were free-falling Wednesday, but for many of us who were short, making 'easy' money was like pulling teeth for most of the day. The broad averages jerked around for hours after falling hard in the early going. As the morning wore on, it felt at times as though DaBoyz were going to muscle shares back to unchanged. They failed at this, however, because shorts hung tough, resisting being spooked into a doing the heavy lifting for bulls. But the fun part of the day didn't come until the final hour, when the Dow doubled its losses from earlier lows. Some Ricks Picks subscribers still held a bearish put spread I'd recommend on October 12. It was a longshot bet at the time, but we were getting 8-to-1 odds. The bet was on a 700-point decline in the Dow, and it has paid off nicely even if it took a week for it to snowball. 8000-Point Dow Selloff 'About Right' To determine whether you could have done the spread yourself, check out the Rick's Picks Facebook page by clicking here. The video is dated October 12 and appears under the headline Stocks Have Further to Fall -- Here's a Cheap Bet to Play It.  My gut feeling is that the so-far mini-crash needs a washout before the stock market can launch into a sustained uptrend. That would be in the context of a likely bear market, however, and although we mght go profitably with the bullish flow for a while, we would not want to be on board when stocks turn lower with renewed vengeance. Bear rallies are supposed to scare the hell out of shorts, so be prepared for some spectacular ones in the months ahead. Concerning the washout needed to create a temporary

Someone mentioned MMM in the chat room, and now here we are, owners of the 9 Nov 170/165 put spread! It cost us 0.33 per and has the potential to go to 2.50 if the stock falls from a current $184 to $165 before the puts expire in two weeks. Forget about standard deviations and all of that gobbledygook when you try to determine whether the bet might pay off. Just look at the chart and let your eyeballs do the determining -- tell you, that is, whether a plunge to $170 or lower in the allotted time is possible. Of course it is!  For further details on cutting the already low risk of this trade in half, see my posts in the chat room from around 5:30 p.m.  Another spread that many subscribers evidently bought, the DIA 26 Oct 245.00/242.50 put spread, has tripled in value. I have not covered it in the touts section, but you can find details in the chat room. It was also explicitly recommended in a Facebook video I recorded on October 12.  If you're interested in these Friday presentations, visit the Rick's Picks Facebook page and "Like" me so that you will be informed via email when they begin. ______ UPDATE (Oct 20, 9:14 p.m. EDT): It's time to write off the bear spreads, which cost us $132, since five days of sideways pooch-screwing have all but killed it. I underestimated the tenaciousness of the institutional chimps who own this stock, even though I still regard it as dead meat for 'fundamental' reasons that include a strong dollar. Every rally should be regarded as distributive, although, as we've just determined, the inevitable slow-death decline over the long-term will not offer any profit opportunities for put-buyers.

The futures would become an enticing 'mechanical' short if the sharp bounce off Tuesday's bombed-out low hits the green line (2777.31). The implied initial risk per contract would be around $2400, but there are alternative ways to get aboard with far less at stake. Stay tuned to the chat room for guidance on this, but keep in mind that the pattern we would short implies there's an odds-on chance that the rally is merely corrective and won't surpass the 2824.25 point 'C' high._______ UPDATE (Oct 24, 7:24 p.m.): The rally we were looking for to get short under optimal conditions failed to materialize, but the 2636.50 downside target shown remains viable.

Subscribers used a 115.70 target posted in the chat room Tuesday morning to get long eight cents from the bottom of CAT's hellish $13 plunge. A $7 rally ensued, affording everyone who bought the stock to lock in a profit and hold some shares for a risk-free swing at the fences. The target looked so appealing (see inset) that an hour before it was hit, your editor was able to assure traders that it "absolutely could not miss." Just so.  At the same time, a bear option spread that we'd given up for dead came roaring back as stocks plunged. The DIA Oct 26 245/242.50 vertical put spread doubled in price from the 0.34 (or less) subscribers had paid, providing an opportunity to take partial profits, sit back and enjoy the stock market's histrionics for the remainder of the week, come what may. Want to join in the fun? Click here for a free two-week trial and head for the chat room, where great traders from around the world swap actionable ideas 24/7.