Rick Ackerman

The futures spent last week moving lower, but not significantly, and not in a way that was easily tradeable. Nervous blips against the downtrend occurred with annoying frequency, producing only frustration no matter which side of the market a trader was on. Still, a cursory glance at the chart (see inset) suggests the ratcheting price action was a bullish consolidation, even if a hellish dive-out-of-nowhere can never be ruled out as Sunday evening approaches. There was nothing of particular interest on the economic calendar for the week ahead, and the news environment looks similarly uninspiring.  This will raise the odds that old tariff news will be trotted out as the reason stocks have fallen, if that is what they do. China has many good reasons to come to the negotiating table. They have played so dirty for so long that a few concessions would hardly dent the rather large edge they've built into their trade policies. Trump should not ease his grip on their balls, and it doesn't look like he will. Although this will cost us all, at least for a while, it will have  been worth it if it results in a more level playing field for global trade. _______ UPDATE (Sep 11, 5:07 p.m. EDT): After spiking on a short squeeze that began the day, the futures spent the rest of the session in a weak consolidation pattern. I say 'weak' because it occurred beneath an 'external' peak recorded last Thursday rather than above it. On balance, I'd suggest watching from the sidelines when stocks open._______ UPDATE (Sep 12, 5:46 p.m.): Zzzzzzzz. A likely pop above the 2896.25 midpoint resistance shown is what it will take to send this gas-bag to the  2927.50 target. A more-than-slight breach would portend additional waftage to 2936.25.

AAPL exceeded a rally 226.26 target I'd drum-rolled by $3 last week -- not quite enough to make another big leg up a done deal. More immediately, the stock looks likely to continue falling to at least 217.70, the 'D' target of the nicely formed pattern shown in the inset.  A rally back up to the green line can be shorted ''mechanically' with a stop-loss at 225.37. I'd suggest near-the-money puts with about 4-12 days left on them and an initial stop-loss equal to a third of their purchase price.______ UPDATE (Sep 11, 5:12): The short squeeze off engineered weakness at the opening suggests DaBoyz are solidly in command, well able to take the stock still higher on Wednesday. If and when they push AAPL above the red line, look for a move to the 231.81 target shown. That would be a new all-time high.______ UPDATE (Sep 12, 6:14 p.m.): AAPL continues to turn skittish at midpoint resistance levels of different degree. The rally target flagged above remains viable nonetheless, but slightly altered: 232.30.  Corresponding midpoint resistance lies at 224.39.

Once again, the emphasis was on finding actual trades in real time come hell or high water. In practice, this often implies trading with the trend in some pricey stocks where just a little slippage can play havoc with the edge we seek. Entries will usually be via buy-stops that make fills unpredictable and riskier than we should prefer. Regardles, the reasons we found to trade are applicable to all stocks in all time frames, and therein lies the value of this lesson.

The Kavanaugh hearings were a good bet to dominate the news this week, but they were overshadowed on Thursday by the death of Burt Reynolds. Recalling the highlights of Reynolds' illustrious career -- Deliverance was my all-time favorite -- sure beat suffering through a day of shameless self-promoting on Capitol Hill by Cory Booker, a New Jersey Democrat who evidently sees himself as his party's frontrunner in the next presidential election. Booker laid an egg with his promise to divulge supposedly damning confidential emails authored by Brett Kavanaugh, Trump's choice to replace Anthony Kennedy on the Supreme Court.  Turns out the emails were neither confidential nor damning, but not before Booker had declaimed to the world -- or at least to anyone who was listening, “This is about the closest I'll probably ever have in my life to an ‘I am Spartacus’ moment.”  More like his "I am Ashlee Simpson" moment, assuming anyone even remembers what he said. The news media trained their cameras on him and, well, he farted. Let's hope no other beloved actors have to die in order to drown out the hubris in Washington as the confirmation hearings run their course. Booker makes Joseph McCarthy look like a class act. If he's the best the Democrats can come up with for 2020, Trump will get a second term.

The broad averages treaded water on Wednesday while Amazon suffered a rare drubbing and some other high-fliers got marked down, probably not for long. If there were any doubts about how tightly DaBoyz have rigged the game, they should have been dispelled by the sight of money flowing out of the half-dozen institutional favorites and into Wall Street's flotsam.  The dogs had their day, marking time when it would have been more natural for them to move lower in sympathy with the FAANGs. Particle Physics It's a mystery to me how portfolio managers wake up each morning, all of them trained on the same objective. Does some sort of telepathic signal go out to them, like a silent instruction to cockroaches concerning the location of a rotting piece of meat?  Or is it more like quantum physics?  Subatomic particles at opposite ends of the universe are thought by scientists to react simultaneously to certain stimuli, with no lag. Whatever the case, somehow these guys seem to know what all their colleagues are planning to do on a given day. I use the word "colleagues" rather than "competitors" because, really, how competitive can the game be when most portfolio managers most of the time are heedlessly throwing Other People's Money at the same handful of stocks?

AMZN and AAPL kept the broad averages from plummeting Tuesday and look likely to lend further buoyancy to the markets for at least a couple more days. The latter, with the highest capitalization of any publicly traded stock, rose 0.82 to close at 228.45.  This surpassed a middling Hidden Pivot rally target we'd been using at 226.26, opening a path to the 240.05 target shown in the chart (see inset). AMZN rose even more percentage-wise and now looks like a good bet to achieve at least 2260, exactly 224 points above the latest close. Rick's Picks will continue to keep a close eye on both stocks, since, as long as they are moving higher, the stock market will not be able to sell off to any significant degree.

We hold 800 shares with an adjusted cost basis of 5.72, along with eight strangles -- 7th Sep 5.0 puts/6.0 calls -- for 0.15. I see only brain-deadness in this stock, and therefore the likelihood of the strangle going out worthless.  Nor do I have any patience for sticking with the position, especially since my bias remains bearish and calls for an eventual fall to 4.57. Accordingly, I'll suggest offering the stock, g-t-c, to close for 5.82, effectively scratching our position. If it sells, try to close out the strangle at the same time by offering it @ 0.05, also g-t-c. _____ UPDATE (September 4, 10:03 p.m. EDT): Close out the position today at will. I'll use the worst price reported in the chat room as my cost basis. _______ UPDATE (Sep 6, 6:13 p.m.):  No one in the chat room reported doing the trade, and only one subscriber said he'd held a position, so I'm removing this tout from the home page without comment. The 4.57 target remains viable.

We're using the 2038.67 target shown as a minimum upside objective, but if it is decisively exceeded our sights would shift to a significantly higher Hidden Pivot resistance at 2260.32. It is derived by lowering the current point 'A' to the 710.10 low recorded in November 2016. The first target is sufficiently compelling to warrant getting short there, but I would suggest doing so aggressively only if you've profited by being long on the way up.  If you elect to fade this very powerful uptrend, consider using puts priced under $1 and expiring in 7-10 days._______ UPDATE (Sep 4, 10:10 p.m. EDT): Buyers hit 2050.50 today, putting the 2260.32 target nominally in play.  Even so, if you bought puts please report it in the chat room so I can determine whether to establish a tracking position. Typically, puts should be exited on a stop if they fall to half their purchase price._______UPDATE (Sep 6, 6:24 p.m.): AMZN has topped in an interesting place (click here for graph) after marginally exceeding the 2038.67 Hidden Pivot resistance identified above. The yellow flag is out -- not just for AMZN, our #1 bellwether, but for the broad averages and the aging bull market._______UPDATE (September 6, 11:01 p.m.): The stock has dropped 115 points, or 5.6%, since topping earlier this week 12 points above an important Hidden Pivot resistance at 2038.67 target. Bulls will need to push this bag of hot air above 2014 to retake the offensive.

The 3004.50 target shown is my minimum upside projection for the near-to-intermediate term. It equates to a 1000-point Dow rally to around 27000. The daily chart suggests it could take 5-6 weeks for the futures to get there; however, a blowoff-style finale to the bull leg begun in April could shorten the process by a couple of weeks. To get long, I'll suggest a 'mechanical' bid at p2=2888.06, stop 2849.25. We haven't use a p2 entry for this type of trade in a while, but it will require the futures to meander sideways for at least another 3-4 days. If things play out that way, I'll signal the entry toward week's end. If the rally lurches into high gear with no pause, we'll reconsider the trade, substituting a 'camouflage' set-up as warranted._______ UPDATE (Sep 6, 6:33 p.m.): With the futures falling, we'll put aside the 3004.50 rally target and focus for now on a downtrend that points most immediately to 2870.50.  Here's the chart to guide you if you trade this vehicle. _______ UPDATE (Sep 6, 11:05 p.m.): Bears tried all day to push the futures below the 2870.50 Hidden Pivot support flagged in my last update, but the best they could muster was 2868.00. We'll spectate for a day, since there's little point in predicting a coin toss.