Rick Ackerman

Inflation fears are at a generational peak, pushing our stubbornly unfearful Fed chairman against a wall. He may yet prove right in saying inflation will be transitory, but for reasons that should comfort no one. In the meantime, the U.S. dollar seems resistant to the nervous chatter while Treasury bonds, although struggling for altitude, continue to hold their own. Both are near the middle of their respective trading ranges for the last five years, presumably waiting for more persuasive evidence that the inflation we've seen to date is about to go out of control. An obvious reason this has yet to occur is that wages have barely budged relative to the soaring cost of groceries and consumer goods. But how high can inflation go, one might ask, when the broad middle class can no longer afford stuff? Answer: Only so far. The wealthy will not have much of a counter-effect, either, since the trillions they've banked from the bull market will get plowed back into financial assets and real estate, not CPI items. Meanwhile, the theory that raising the minimum wage creates inflation has been tested and refuted by a pandemic-strained job market. What it does most clearly is destroy jobs. McDonald's may have rolled over on paying burger flippers $15 an hour -- what choice did they have? -- but they have minimized their pain by revamping the restaurants so that as few as three or four employees can run an outlet, including the drive-through. For customers, this means it now takes ten minutes to order a burger using a kiosk, compared to 90 seconds when there was someone behind the counter taking orders. Virtually all labor-intensive businesses continue to find new ways to operate with fewer employees, and many of them, including banks, are on the verge of

Considering that AAPL is the most dependable bellwether we could have imagined for a bull market that has been powered by virtually unlimited quantities of money and unprecedented hubris, we should be most gratified to see it tracking a pattern that absolutely, positively cannot miss. By that I mean that the 151.02 target when reached will produce a precisely shortable peak, and that a decisive push past p on Monday or Tuesday will all but guarantee that 'D' will be achieved.  The pattern has also produced a juicy 'mechanical' buy that would have yielded a $1,280 gain on four round lots. Moreover, it seems likely that any more such signals would work equally well.  The only uncertainty in the picture is the precise stall Friday at the midpoint Hidden Pivot, 144.65. This is the second stall there in a week, and for all we know it could mark the end of the bull market. I mention this because the very suggestion sounds so ridiculous. To be sure, AAPL is taking its sweet old time pushing past p=144.65. But we shouldn't mistake this for weakness; it is deception, really, and that is why the bearish buzz that permeated the Rick's Picks chat room on Friday seemed so odd. Are bears seeing what I am seeing? Evidently not.

The most bearish thing I could say about this vehicle is that one would have to have been crazy to take a short position at the closing bell on Friday. The futures had been in a vertical rally for three days with no significant corrections.  They stopped a hair shy of an external peak at 4472.00 recorded three weeks earlier, but it looked like a thin reed for bears to lean on.  Yes, I'm all  for taking bold positions in the 'discomfort zone', and this one verged on excruciating. But barring some headline catastrophe over the weekend -- Mysterious Surge Fries U.S. Power Grid --  there was no reason to think that last week's lunatic leap would not continue. And even the EMP headline might not be greeted with sustained selling, since the usual institutional clowns would find a silver lining in the prospect of yet more Fed stimulus to counteract Armageddon.  Here is what I foresee with high confidence, given the week-ending fist-pump through p=4422.25: a push to the 4584.50 target shown in this chart. ______ UPDATE (Oct 23): The futures continued along their rose-strewn path to at least 4584.50, oblivious to...everything. The pattern associated with our target is much too obvious to offer an easy shorting opportunity, since every drooler, village idiot and algo sees it too. However, it seems highly unlikely that the rally will push easily past it. We'll look for trades in real time to squash the risk thereof, so stay tuned to the chat room if you're interested. _______ UPDATE (Oct 26, 9:32 p.m.): The futures came down hard after topping at 4590.00.  Although that's just a tenth of a percent above my target, the overshoot is sufficient to leave me mildly bullish once the correction has run its course. How would we know

Another shocker:  QQQ vaulted like a flea on a hotplate to within 4 cents of the 369.02 Hidden Pivot we used last week as a minimum upside objective. The stall there raises the same theoretical question that I asked in relation to a similarly precarious finish for the E-Mini S&Ps: Could this have been the last gasp of the biggest bull market ever? The obvious answer: Naaahhhh! So where to next?  The 'reverse' pattern shown in the chart implies to at least 373.13, and I judge this to be all but certain given the way the Cubes gapped through the 361.73 midpoint Hidden Pivot on Thursday. For the record, however, a 381.00 target corresponds to the one I've given for the E-Mini S&Ps and rated as highly likely to be achieved. The starting point for both patterns is a distinctive low recorded on July 19. Please note that a surprise plunge to p=361.73, or more favorably to 356.02, would trigger 'mechanical' buy signals with appropriate stops.

The rally from September 29's low at 21.60 has 'Matt's Curse' going for it if little else. This trading rule, formulated by subscriber Matt Barnes, holds that a reversal from very close to p2, the secondary pivot, is a good bet to stop out the pattern. I'd originally rated a 'mechanical' short at x=23.80 a so-so bet, but given the precise low at p2, I am no longer recommending the trade (other than via a 'camouflage' set-up, since that can reduce entry risk by as much as 90%, providing attractive odds for an otherwise risky speculation).  We'll see what Monday brings, but if you're jones-ing to trade this howling banshee, stay close to the chat room. ______ UPDATE (Oct 23): The steep rally of the last three weeks came with a zillionth of an inch on Friday of validating 'the Curse'. It would have occurred with a push above the 24.95 point 'C' high of the bearish pattern pictured here. The breakout we are likely to see next week will provide an opportunity to get short in the 'discomfort zone', but let's do so gingerly if at all, since bulls may at long last be getting the upper hand.

IWM's short-squeeze gap past an 'internal' peak from September 27 is a weak breakout but a breakout nonetheless and therefore tradeable with a bullish bias. That's notwithstanding the fact that Friday's peak into a roomy discomfort zone set up a short that was nicely profitable by Friday's close. The pullback should be seen as merely corrective, however, rather than the beginning of yet another return to the bottom of a tedious range that long ago ceased to hold our attention. I'm not going to day-trade this vehicle for you, but I'll gladly vet any actionable trading ideas you bring to the chat room. My hunch is that a 'mechanical' set-up on a lesser chat will be up to the task. ______ UPDATE (Oct 27, 9:12 p.m.): If this nasty correction comes down to x=218.76, it would trip a 'mechanical' buy, stop 213.82. We would not be shooting for a run-up to D=233.55, only to p=223.69, at least to begin with. _______ UPDATE (Oct 28, 8:43 p.m.): The 233.25 target is where IWM is going, and there is no doubt about it.

Corn tripped a faint buy signal at 544 5/8 ten days ago, the first since another signaled in May got stopped out a month ago. This is a bull market just waiting for a sign, any sign, that it's safe to exit the lengthy consolidation that has tied traders in knots for the last five months. The rally is not yet impulsive on the daily chart, but we can use the reverse pattern to get long at or below its d=523 6/8, in the 'discomfort zone', since it is bullishly impulsive on the hourly chart. Notice that the c-d leg of the pattern consistently signaled winning 'mechanical' shorts, but that traders would have endured considerable pain before cashing out. ______ UPDATE (Oct 12, 9:49 p.m.): Corn made a very tradeable low at 519-2/8 before leaping to a so-far high tonight at 525-2/8. The trade suggested above could have been worth around $200 if you caught it with a tight rABC. I am holding a single contract myself, the last of four,  for a swing at the fences. ______ UPDATE (Oct 13, 4:12 p.m.): No home run this time. I exited the position overnight after the futures went into screw-the-pooch mode for a few hours before plummeting. The realized gain on four contacts was $388. Corn looks like hell, so I won't suggest anything new.

I sense a melt-up is coming, and soon. Bulls face just one significant obstacle in their quest for new all-time highs: the 4472.00 'external' peak recorded on September 27.  Once above it, the old record at 4529 would turn magnetic, drawing the futures higher without seriously taxing buyers; short-covering bears would do all the work. Alternatively, a moderate fall could tell us whether this is likely. Specifically, if sellers drive ES down to the 4314.50 midpoint support of this pattern, an easy penetration would suggest bears are in charge, at least for the time being.  It could also set up an enticing bottom-fishing opportunity, since we would be using a very tight stop-loss that anticipated a turn from 4314.50 exactly, give or take no more than a point or two. _____ UPDATE (Oct 11, 8:45 p.m.): So far it looks more like a nascent meltdown. Price action is too nutty in any event to be worthy of our serious attention or even speculation at the moment. _______ UPDATE (Oct 14, 7:54 a.m.): Apologies for the belated update, since I emphasized in commentary that went out Sunday night that this ostensible 'bear rally' is going to new all-time highs. As I also mentioned, DaSleazeballs running this carnival midway show are accomplishing this with short-squeezes in the dead of night, when there is almost no selling pressure. This allows a 'fake' rally to keep on chugging while using up almost no bullish buying power. String together enough phony rallies that surpass previous peaks with stealth rather than power, and eventually you are talking about the real thing, a melt-up.

Price action last week was as agitated as we've seen in a while, with bulls and bears locked in a seeming fight to the death. We'll side with the latter for now, but only for purposes of drawing a chart we can use to assess trend strength in either direction. If the 'C' high at 365.65 is taken out as the week begins, I'll likely redraw the graph to reflect a stronger bullish bias. For now, though, we can look for Friday's moderate weakness to continue. If it sends the Cubes down to p=353.93, you can bottom-fish there with a very tight stop-loss.  Call options might work if the upturn is sharp enough, but don't go out more than a week, and use options priced for 0.60 or less. _______ UPDATE (Oct 14, 11:15 p.m.): Today's short-squeeze spasm above the 'C' high of the bearish pattern has generated a rally target at 369.02 (15-min, a=353.15 on 10/6 at 10:35 a.m.). Let's see how the herd handles it on a Friday.