Rick Ackerman

December Gold has trapped bulls with fake rallies two days in a row. It dove even more steeply on Friday, the second day, falling from a 1213.80 peak recorded in the dead of night to an end-of-session low at 1197.80. This kind of price action is bound to discourage bulls, and it could only occur if too many of them are too eager to jump on the futures every time they show a spark of life. Price action has been worse than discouraging, actually, it has been viciously punitive. That's why I will continue to remind you that, in the minds of most investors, gold is garbage. That description may sound harsh, but its purpose is to keep you from thinking that mere hopefulness will suffice to turn gold around. Although there are a dozen good reasons why gold could be considered undervalued at current levels, that doesn’t mean quotes couldn't continue to fall to levels that seem absurd. I doubt nonetheless that they are headed below $1000, but that still leaves $200 of downside to torture the faithful. We can continue to trade impulsive rallies in the meantime, but only by way of the lesser charts, so that entry risk is very tightly controlled. _______ UPDATE (Sep 17, 9:44 p.m.): The futures are technically on track for a run-up to D=1223.90,  but they'll need to do better than that -- with effortless aplomb -- exceeding the 1228.50 peak shown here, to deserve our mild interest.________UPDATE (Sep 21, 10:19 a.m.): Gold has plunged $20 after failing by $7 to reach my 1223.90 target. What a shocker. Just keep reminding yourself that, as far as most investors are concerned, gold is 'garbage'.  If you don't lose sight of that unfortunate fact, it cannot hurt you.

The Dollar Index, currently trading for around 95, is poised for a breakout that seems likely to hit the century mark within the next 12-24 months if not sooner. This is going to put added pressure on foreign earnings of U.S. multinationals as well as increasing the already ponderous weight on bullion. My long-term forecast for the Dollar Index calls for a test of highs near 120 that were made more than 17 years ago. If so, the implication is that February’s 88.25 low marked the beginning of a monster rally like the one that took DXY from 79 to 100 in 2014-15.  There’s no way the dollar could reach 120 in a normal economy. The forecast implies that at some point, the U.S. will experience a catastrophic deflation that makes dollars scarce. A wave of bankruptcies could cause this, and the most logical place for it to start would be in the collapse of a public-employee pension system that is already a sinkhole waiting to happen. This is a liability that cannot be monetized — at least not without touching off hyperinflation. For reasons that I have written about for more than a decade, it is all but certain to occur. For further discussion of this, click here to access an interview I did on Wednesday with Cory Fleck of Korelin Economics Report and National Investors' Chris Temple. _______ UPDATE (August 21, 5:25 p.m.): The dollar has gotten sacked recently, but it would trigger a theoretical 'mechanical' buy signal if the weakness continues to x=94.64, shown as a green line in this chart.  A 93.18 stop-loss would obtain. _______ UPDATE (August 27, 9:33 p.m.): Gold bulls beware: DXY has tripped the 'mechanical' but signal flagged in my update from a week ago. _______ UPDATE (Sep 15):  The dollar rallied

Today's chart is of a sort that I typically characterize as 'high-confidence,' implying that I view the futures as very likely to reach the 'D' target at 2936.25, and to produce a tradeable pullback when they get there. The chart also suggests that a 'mechanical' bid at the green line would provide an excellent shot at a $2700 profit per contract. I can't guarantee the futures will pull back that much, though, and judging from the steep pitch of Thursday's rally, I doubt that they will.  We haven't initiated any mechanical trades at the red line recently, but I'd suggest using it to set up a 'camouflage' trigger if you use it at all.  Technically speaking, the 'mechanical' entry there has already triggered, stop 2888.75. ________ UPDATE (Sep 16, 5;07 p.m.): The futures tripped a 'mechanical' buy signal on a pullback to the red line (p=2900.63) in the manner sketched out above.  Many subscribers have indicated they're interested in trading this vehicle, but there was no mention in the chat room of anyone having done so. However, if I hear from at least two subscribers who hold positions based on my instruction, I will establish a tracking position. In theory, a partial profit should be taken at at 2918.00, halfway to the target, with the rest held for a shot at D=2936.25. Here's a fresh chart.

A mixed opening this morning seems to be struggling for loft. Although Friday 'jackpot' bets have found little success in the first hour, put options could turn out to be late bloomers.  Out-of-the-money calls in VXX are a good way to straddle the bet, especially because this vehicle has bounced today from a moderately attractive target at 27.45. On balance, jackpotters should focus on the downside, since there is obviously not enough juice to push stocks higher today.

Bloomberg news is out with a breathless dispatch tonight that suggests digital currencies have bottomed. If so, I can find no compelling evidence of it in the charts. Their expert is a guy named Michael Novogratz, a former Goldman Sachs partner who likes the current look of Bloomberg's Galaxy Crypto Index. It measures the performance of the largest cryptocurrencies versus the dollar and was compiled jointly in May by Bloomberg and Novogratz's investment fund, Galaxy Investment Partners. I use the CME's Bitcoin Index (Symbol: BRTI) myself, and it looks brain-dead to me. I would turn quite bullish if BRTI were to thrust above the 8594.57 peak labeled in the chart (see inset), but until such time as that happens, I'm inclined to think it will dip first to the 4396.32 target shown in the chart before warranting our serious attention. ________ UPDATE (Nov 16): My dour outlook is about to give way to a new, bullish reality. For my reasoning, check out the commentary on this page under the heading Ruminations: Why a Hard-Core Bitcoin Bear Is About to Turn Bullish.________ UPDATE (Nov 20, 10:15 p.m.): Sellers crushed an important Hidden Pivot support at 4396 with rather more force than we might have expected, implying they are likely to inflict further damage before this vehicle can bottom.  A rally exceeding 4892 would turn things around, but failing that, BRTI could fall all the way to 2991, or perhaps 2601, before it finds traction. The latter number is a Hidden Pivot support of unimpressive pedigree; the former, a key low recorded ten months ago as bitcoin was blasting off.

Our bid for AAPL put options turned out to have been a couple of cents too low, but the attempt to get short at a minor rally target illuminates a tactic you will want to incorporate in your own arsenal. The surprise here was how liquid the options in this stock are – liquid enough that you could scalp in and out of hundreds of them with relatively little slippage. As you will surmise, the same opportunity exists in many popular day-trading vehicles, including the ultra-liquid SPY.

With a potentially devastating hurricane bearing down on the Carolinas, it is eerie to watch a newsman do his evening report from the beach in Wilmington, NC. Winds are at about 8 knots and the ocean is calm, providing no evidence whatsoever of the tempest that has been predicted for the coastal Southeast. It's tempting to hope that this developing story, like so many others, will not live up to the media hype that has preceded it. Whatever the case, denizens appear well prepared, many having evacuated into the hills. Westbound roads are jammed, according to a source who lives in Saluda, NC, and nearby Hendersonville has run out of bottled water and gasoline. We'll likely know by tomorrow evening how bad it will be, but our prayers are with those who live in the beach towns that will take the brunt of the storm.

I've been so skeptical about gold's rallies for so long that I'll stick closely to the technical evidence to guide me this time, lest I miss the start of the real McCoy. Although the December contract looks almost certain to reach the 1223.90 target shown, I doubt that it will push far past it. That's because the point 'B' high of the pattern was so anemic, failing to exceed the mid-August peak. That would have generated a robustly bullish impulse leg on the hourly chart, making the current move more likely to get legs. Whatever happens, we should watch closely to see how buyers handle the Hidden Pivot resistance at 1223.90. If they demolish it, that would be reason to trade more aggressively with the flow. For now, however, traders should regard a move to that number as all but inevitable.______ UPDATE (Sep 13, 4:35 p.m. EDT): Today's punitive reversal actually increased the odds that 1223.90 will be achieved, since the intraday high generated a fresh bullish impulse leg on the hourly chart. Otherwise, the analysis above can stand as given. I am skeptical and no masochist, and that's why I am not gung-ho to jump on this vehicle, even when it looks 'good'.

When two key stocks, AAPL and AMZN, topped last week at important Hidden Pivot resistances, I put out the yellow flag. However, the stocks' canny sponsors were in such complete command on Tuesday that there can be little doubt that they aim to take them both to new record highs shortly. The stocks opened on stage-managed weakness, spring-loading them for short-squeezes that had bears scrambling for cover all day.  The Dow was up only 114 points, but if AMZN and AAPL keep up the pace, the broad averages are likely to catch fire as well.