Rick Ackerman

I tend to tune out head-and-shoulder patterns because they are everywhere one wishes to see them. However, the one shown in the inset is an impressive specimen and dangerous to ignore. Since it implies an eventual fall in the Dollar Index to as low as the high 80s, I'll need to factor that possibility into an otherwise resolutely bullish outlook that has obtained here for several years. Charts aside, I've been bullish on the dollar because, despite talk of the world ganging up on it to create an alternative reserve currency, no other money on Earth is sufficiently scaleable to fill the bill. The U.S. dollar is the only game in down, and that's why I'll take the bearish H&S pattern with a grain of salt. Additionally I'll note that the weekly chart is tracing out a much bigger H&S pattern that goes back to 2014. If it were to play out in textbook fashion the dollar could be headed into a major bear market that would it down into the high 70s._______ UPDATE (Oct 23, 11:04 p.m. EDT): If bulls can push this vehicle just 1.75 to 2.00 points higher, it would negate the bearish head-and-shoulders pattern noted above._______ UPDATE (October 25, 9:38 p.m.): This chart shows how the last few days have all but negated the bearish head-and-shoulders pattern that had been forming since May. It suggests that the 98.99 target that was in play in June is still very much in play.

I've greeted rallies in recent weeks with unmitigated skepticism, and dissed gold every chance I got, but today's powerful upthrust did everything I'd asked of it, turning me -- and the hourly chart -- mildly bullish. The move was uncorrected as of the close, and so it's possible the impulse leg will become even more impressive, exceeding additional peaks without pulling back. For the time being, though, I'll suggest using the 1237.90 target shown as a minimum upside objective. It is woefully illegitimate because the A-B impulse leg clearly did NOT surpass any significant prior peaks. However, the pattern itself is sufficiently comely for us to use for targeting purposes. The move would become downright impressive if it surpasses the 1244.70 'external' peak recorded on July 23, especially if this were to occur without a significant correction en route._______ UPDATE (Oct 15, 9:53 a.m.): The December contract has fallen back sharply after rallying  $15 overnight to within 1.00 of the 1237.90 target I'd furnished. For purposes of establishing a tracking position, I've asked subscribers in the chat room for details concerning any positions they may have held or still hold. The downturn has come precisely, and coincidentally, from the 1236.70 midpoint resistance of the pattern shown in this chart. If it is brushed aside by buyers, look for the rally to continue to at least 1254.10. _______ UPDATE (Oct 21, 5:07 p.m.): Bears remain badly on the ropes after being impaled by October 11's big rally. However, bulls show no energy or enthusiasm for launching another leg higher. The stalemate could continue for a while, but the longer the December contract hovers at these levels, the more likely it will become to correct sharply to gain some running room. Click here for a fresh chart. ______ UPDATE (Oct 23, 11:08

Trump's wholehearted embrace of rapper Kanye West is one of the smartest political moves he has ever made. West is a hugely important defector from the leftist stronghold of showbiz. CNN, CNBC et al. are dissing him with all of the nastiness they can summon,  but only because they know how much influence he wields over tens of millions of Americans.  Kanye has always been a maverick and seems truly not to care what others think of him. Sitting with Trump in the White House has guaranteed him ostracism from the World of Cool, and that is why breaking ranks so sharply with his radicalized cohort took courage and conviction. But Kanye himself is capable of single-handedly re-defining cool and of bending it in new directions, even those as seemingly outrageous as flirting with GOP politicians. Anyone who would bet against this hasn't followed the remarkable trajectory of Kanye's career. Stop-and-Frisk The White House meeting was no mere koffee klatch either, since it focused on issues that have violently polarized America. Kanye was there to talk about prison reform and 'stop-and-frisk'. For his part Trump declared he was 'open to anything', a promise that will doubtless ring true to most Americans, particularly his enemies. A few more high-level defections like this one and the left-tilting entertainment/news complex could be back on its heels. Kanye has made it possible for other popular-culture heavyweights to come out of the closet and do the unthinkable -- i.e., literally hug a Republican, and share politically charged ideas with one. This sounds so startling that we shouldn't be surprised if it eventually becomes fashionable. If so, might we hope to see the following in the future? SNL breaks a four-decade drought of humorlessness with a razor-sharp skit lampooning the Clintons Matt Damon does a wicked

Wednesday's avalanche was pure pleasure for those of us who have been waiting for reality to assert itself  in the helium-rich precincts of Wall Street. Bloomberg news was there to calm the troops with this measured headline: Traders Say Bad Day Was Overdue in Stocks, Not a Reason to Panic.  No arguing with the word 'overdue,' but it leaves unresolved the question of how much more selling will be needed to balance accounts. Because the rise in interest rates was the proximate cause of the selloff, and because yields look likely, at least in my technical estimation, to rise even more, we shouldn't be too hasty to fish for a bottom. There are good arguments to be made that a scary correction would set the scene for a Dow blowoff above 30,000. For now, though, we'll allow for the possibility that the selloff will mark the end of a bull market that had just entered its 116th month.

Amazon will have fallen 14% from the record high recorded five weeks ago if it hits the 1694 target shown. Feeling just a touch of schadenfreude? We should be, since it's high time portfolio managers got the stuffing knocked out of them for once in a rare change. Sitting on shares of this stock, and accumulating more of shares as they have risen, is what passes for genius these days on Wall Street. The steep dive of the last eight days serves to remind the erstwhile Masters of the Universe that even one-decision stocks like AMZN, NFLX and AAPL can sometimes turn on their masters. I am not meaning to imply DaBoyz have lost control, but they have almost surely had to eat more sell-at-the-market orders than they'd planned on when AMZN's descent got off to a relatively gentle start on October 1. ______ UPDATE (Oct 11, 6:06 p.m.): The stock overshot the 1694 target given above by 9 points -- not much, considering it had plummeted 348 points to get there. However, given the clean look of the pattern, that's sufficient to imply that still lower prices impend. We'll sit back and enjoy Friday's show, but stay tuned to the chat room if you're looking for intraday guidance.

Twelve days ago, on Facebook and in my chat room, I recommended buying the Oct 19th 30/35 vertical call spread for 0.50 or less. The Facebook video was presented under the headline Leveraging an October Disaster with Cheap Calls, and you can view it by clicking here. The spread subsequently traded as low as 0.21 before stocks began to fall last week, launching the position skyward. It doubled, then tripled in value earlier in the week, shooting up as high as 3.00 today with the S&Ps in a 100-point dive. Anyone who followed my simple guidance could have made between five and fifteen times his or her original investment. As is my custom, I recommended cashing out half of the position when it doubled in value, allowing subscribers to hold the remainder for a risk-free swing at the fences. I also recommended keeping one or two contracts until expiration day, since, if VXX is trading above 35 at that time, the spread would be worth its maximum value of 5.00. To all who took a position based on my guidance, good luck! _______ UPDATE (Oct 12, 9:08 p.m): VXX ran up to 37.38 around mid-day, making the last remnants of the spread an easy sale for 4.80 or higher. Subscribers who held out for top dollar should take some their gains and splurge on something you'll enjoy.

The Dow has collapsed from a high that fell just shy of the 27,251 target I'd drum-rolled. By day's end the selling had slightly exceeded a key low at 25,608 recorded on August 23, although not by enough to rule out a possible 'counterintuitive' bounce from these levels. Failing that, however, we should expect the Indoos to home in on an even more important low at 24,965 recorded two months ago. At that point the Dow will have shed 7.3% of its value since hitting an all-time high eight days ago at 26951. Worst case, Hidden Pivot targets aside, would be a test of the 23997 low carved out on June 28.

With the futures on their way to a 100-point loss Wednesday, each wrenching move lower was foretold by the breach of a minor Hidden Pivot target. I've run out of clear, 'easy' targets, however, and so gnarly ones like the one shown (see  inset) will have to do for now.  It shows the December contract barely holding a 2769.50 'hidden' support that I disseminated in the chat room after the close. If it's breached, however, I would need to slide the point 'A' high up to the 2942.00 peak shown to produce a lower target at 2741.50. Beyond that, the most meaningful number we're going to get will come from the next big leg down after the A-B leg still in progress has given way to an upward correction. The midpoint Hidden Pivot of that C-D leg will give us the means to determine whether a bear market has begun. We'll have clues before then, however, based on price action in lesser time frames. Thus, if minor, upward abcd corrections start to fail at their midpoint pivots, and downtrending ABCDs of lesser degree start to exceed their 'D' targets, it would be warning that the big picture had turned bearish.

The Dow was down nearly 300 points when this session began, on its way considerably lower, so there was plenty to do. Mostly, we looked at puts and calls: directional bets, vertical spreads and even butterflies. That last tactic was considered with the goal of leveraging a further, potential drop of a thousand points in the Dow over a two-week period. The option strategies on view are relatively sophisticated, but they are explained in a way that most subscribers will be able to follow as long as they understand the basics. You may be surprised at how accurate the intraday forecasts proffered during the class worked out.