Rick Ackerman

The news media have gone off the deep end once again with their tone-deaf misjudgment of America's mood prior to a national election. Tune to MSNBC or CNN and you might think we are all clamoring to see the Central American 'caravan' double in size every few days until it reaches the Rio Grande; to have Trump and Kavanaugh impeached; to install Elizabeth Warren or Bernie Sanders in the White House; to take a knee ourselves whenever the national anthem is played; and to revive Obamacare. Let me say it again: If you're expecting a blue wave in November, you are not living in the real world. So much for politics. Regarding the stock market, it's still premature to conclude that the broad averages are incapable of being short-squeezed to new record highs. Shares have been unusually weak in October, to be sure, but we should never underestimate the ability of bears to snatch defeat from the jaws of victory with a short-covering panic. It's coming, as it always does, but the Dow may need to fall a further 1100 points before bears ride to the rescue.

Anyone hoping Treasury rates will ease, cutting stock-market bulls some slack, must first reckon with the chart shown (see inset). It implies that a significant rise in yields on the 30-Year Bond is coming, and that they will hit 3.59% before borrowers get any relief. If this occurs as appears likely, 30-year mortgages will be pushing above 5%, causing an already shaky housing sector to implode, along with the auto-leasing business. A key resistance to watch sits at 3.44%. That's a Hidden Pivot rally target of lesser degree than the one noted above, and if it gives way easily there should be little doubt that the long bond is on its way to at least 3.59%. Some may point out that the U.S. economy has survived much higher rates; however, that should come as scant comfort, since rates have never risen so sharply after having been artificially held so low for so long. As to Fed hubris that would have us believe the economy is strong enough to weather higher interest rates, the banksters will discover otherwise -- discover that most of the supposed 'strength' has come from stock-market and real-estate valuations pumped to the sky by easy-credit policies._______ UPDATE (Nov 3): TYX blew past 3.44% on Friday, further shortening the odds that the 3.59% target given above will be reached.

Expect the "other shoe" to drop this week, culminating in a tradeable bounce from within inches of the 24,997 midpoint Hidden Pivot shown. Even if not, we are bound to get a revealing picture soon of a bull market now in its tenth year and presumably tiring. If the weakness we saw last week was the start of a C-D leg of a bearish ABCD correction from October 3's all-time high (26,951), we might expect it to continue at least to the 24,997 "hidden" support noted above.  If the support gets crushed, we can assume that a further fall of 820 points to 24,177 is under way. Alternatively, there's a chance buyers could temporarily turn things around next week and push the Dow above C=25,817. But don't expect the effort to produce a new all-time high. More likely is that any such rally would set up a C-D plunge from a higher level. In the meantime, I will keep this tout publicly viewable so that you can follow whatever changes in the technical picture may be warranted._______ UPDATE (Oct 22, 5:47 p.m.): No change in my bearish outlook, but here's a chart you can use that shows two price points that would flash, respectively, a "yellow alert," and a "red alert" just ahead of a short-covering panic._______ UPDATE (Oct 23, 10:23 p.m.): The powerful bounce that ended the day did not negate the bearishness of the decisive breach of the 24,997 pivot mentioned above. In fact, a rally to x=25,407 would trigger a 'mechanical' short, stop 25,817. Click here for the chart -- and stay close to the chat room for real-time guidance, since there are good ways to get short in companionable vehicles with risk under very tight control._______ UPDATE (Oct 24, 7:30 p.m.): The Dow still looks bound

Although a fall to a 208.04 target I'd drum-rolled here Friday looked like a no-brainer, bulls had other designs. The result was a weak mechanical-short signal that we can ignore for trading purposes, even as we prepare for the drop to 208.04 that's implied. Let's also allow for a bullish reversal, but with the bar set high -- i.e., above the 227.27 peak corresponding to the point 'A' of the pattern shown in today's chart. Were that to occur, the only bullish pattern that makes sense to me would be this one, which implies minimum upside to p=233.86 (click here for chart). That's the first time I've broached that target, but we should take it seriously because Apple is the most valuable company on Earth._______ UPDATE (Oct 28, 5:10 p.m.): Lest AAPL's big but tedious swings put us in a trance that causes us to miss a bullish breakout if it comes, I've lowered the bar to 224.50.  This chart shows why. _______ UPDATE (Oct 29, 6:48 p.m.): After plummeting for most of the day, the stock trampolined from just beneath my longstanding target at 208.04.  My guess is that sellers are spent for the moment. However, the fact that they overshot such a clear and compelling Hidden Pivot support even slightly implies more weakness ahead. Here's a fresh chart. ______ UPDATE (Oct 30, 9:23 p.m.): Today's price action felt like accumulation, but if DaBoyz should surprise by feinting lower in the early going, hitting the 208.81 midpoint support shown in this chart, be prepared to buy some expiring 220 calls for a leveraged play. If you do buy them, offer half to close for twice what you've paid, g-t-c.

Existing-home sales continue to fall, increasing the odds that the aging stock-market bull has finally breathed its last. If so, the selloffs we've seen on Wall Street over the last few weeks have not been merely corrective, but the beginning of a bear market that promises to be as nasty as the bull has been giddy. Investors have shrugged off plenty of bad news since shares lifted from a deep trough in March 2009, but it's hard to imagine they will be able to finesse an already protracted housing slump that threatens to grow even worse. The deterioration has gone on for seven straight months -- the worst performance since 2014, when real estate was still recovering from the Great Financial Crash. With 30-year mortgages headed toward 5%, prospects of an upturn in housing in the coming months seem remote. The same factors are going to weigh heavily on the auto sector as well, since leases that effectively allow Americans to drive more car than they can afford are heavily dependent on easy credit and low rates. Incidentally, I foresee a dead-cat bounce in housing soon that could offer a high-leveraged play for traders. For explicit details, visit the Rick's Picks Facebook page.

The futures hung nervously aloft Friday after tripping a conventional 'sell' signal down to as low as 2637.50 a day earlier. They could always rally above C=2824.25 just to annoy bears, but that would be bucking an ABCD downtrend whose weight you can judge for yourself (see inset). I'll suggest using p=2730.88 as a minimum downside projection on Monday/Tuesday, but don't count on that Hidden Pivot for precise support, since it coincides with an obvious low at 2732.25 recorded on October 12 that the hoi-polloi will be counting on.______ UPDATE (Oct 22, 11:50 p.m.): How completely refreshing! Sellers have knee-capped the futures tonight, bludgeoning them down to within three ticks of the 2730.88 target I'd provided above as a minimum downside projection. If the fun continues, use 2636.50 (slightly adjusted from above) as a minimum price objective.

After trapping bulls with a gap-up rally on the opening Friday, AMZN headed south, presumably bound for the 1739.21 target shown. The bounce we can expect from that midpoint Hidden Pivot support is likely to be tradeable, but I'll leave it to you to fashion an appropriate 'camouflage' or 'mechanical' entry strategy that can get you aboard with risk tightly controlled. A two-day close beneath the pivot would imply more  slippage to as low as D=1633.42, a possibility that would be tradeable using the Hidden Pivot tactics at our disposal. The easiest trade I could foresee at the moment would be a 'mechanical' short from x=1792.00.  I will signal it in the chat room and via email if our criteria are met._______UPDATE (Oct 22, 6:19 p.m.): Bears failed so miserably to push the stock down to p=1739.21 that Monday's price action must be judged at least somewhat bullish. Their doomed struggle reminds us that buying shares of AMZN is institutional investors' one-trick pony and that we should be getting used to it by now, especially when most other stocks are falling. Here's a fresh chart that shows it all. _______ UPDATE (Oct 23, 10:58 p.m.): It would take a rally exceeding 1896.68 to turn the hourly chart decisively bullish again. Even so, we shouldn't resist the lunatic rallies in this stock too aggressively, since they are stage-managed to take no prisoners.

Toward the end of the session we considered an opportunity to get long in Microsoft using call options. The trade triggered shortly after the class ended, whereupon the options rose from 0.55 to 0.90 in 30 minutes. Although we missed out because I’d suggested placing a bid for the calls at 0.50, a tick beneath what turned out to be the low, my rationale for bidding exactly 0.50 was tightly reasoned and instructive. Check it out if you want to add another tool to your trading arsenal.

Stocks fell hard Thursday, supposedly because of  growing US-Saudi tensions over the gruesome murder of  Jamal Khashoggi, a journalist who has been tough on the monarchy and easy on the Muslim Brotherhood. If such tensions did in fact push stocks lower, as a headline in the Wall Street Journal tried to suggest, then why didn't oil prices rise? After all, the Saudis, pressed to admit the murder was officially sanctioned, have told inquisitors to back off -- either that, or risk a curtailment of crude supplies that would push prices into the danger zone in a world dependent on cheap oil. For better or worse, it is not tensions over the murder that have been worrying investors, but rather the upward skew of interest rates. This development has reached a menacing threshold where a global economy as dangerously dependent on cheap credit as it is on cheap energy could start to falter. Economic growth in Europe and Asia has already slowed significantly, although not yet appreciably in the U.S., where bull-market mania evinced nary a hint of concern until very recently. Gird for a Fearsome Friday Expect those concerns to snowball on Friday as traders wrap up another week by further discounting a darkening reality. The erstwhile Masters of the Universe couldn't bring stocks back even a third of the way Thursday after selling the Dow down 470 points. My hunch is that DaBoyz will apply a feather-light touch in the wee hours Friday, distributing what little stock they can to widows and pensioners; then, following a flurry of short-covering on the opening, they will pull the plug. Whatever the case, you can follow along in real time, with running commentary and the front-row vantage point afforded by the Rick's Picks chat room. Click here for a free trial that