Rick Ackerman

Netflix topped on Friday 20 cents above our 398.66 target, leaping $11 from an opening-bar deficit of $4 even as the Dow struggled for traction, down nearly 200 points. This was quite a performance by NFLX, one that made it relatively easy for subscribers who bought call options on the opening as I'd advised to make a few bucks. The stock sold off moderately, ending the day at the midway point of its intraday range. To judge from the chart, there is a strong likelihood that bulls will achieve the 426.82 target (see inset). However, this could mark an important top, since the pattern is so clear and compelling. That always raises the odds that a Hidden Pivot target will be hit precisely.  Meanwhile, although I doubt NFLX can continue to swim against the tide if the broad averages are weak, we can count on it for a high-beta performance in any event. Indeed, the pitch of its rally has been even steeper than AMZN's.______ UPDATE (June 18, 9:04 p.m.): No one reported taking a position in NFLX, so I'm not offering a tracking position. However, since the recent top occurred a hair from where we'd expected it, we shouldn't be surprised if the stock continues to fall. Here's your road map for the next leg down. A decisive breach of p=387.41 would spell more downside to at least 381.65. Also, a rally back up to the green line following a low near 386.00 would set up an enticing 'mechanical' short.______UPDATE (June 19, 7:15 p.m.): I'm not a Reed Hastings-worshiper, and I think Netflix -- the stock and the company -- is much overrated. But that doesn't mean I will ignore clear evidence on the chart that the shares are headed still higher. In that regard, the stall today exactly

DaBoyz squeezed the Indoos hard enough Friday afternoon to recoup two-thirds of earlier losses, but they'll need to do much better on Monday to keep the rally going. Specifically, it would take a push exceeding 25,332 to turn the hourly chart impulsively bullish. That's where a technically significant peak was made on the way down last Wednesday. Looking at a much bigger picture, the failure of the Dow to surpass the 25.449 'external' peak recorded on March 12 (see inset) at last week's high is telling. Just 50 points higher and bulls could have refreshed the bullish energy of the daily chart, generating a robustly bullish impulse leg for the first time in more than a month. Instead, they've let the blue chip average roll down in tandem following a trend failure similar to one that has developed in the S&Ps.

The futures have begun to roll down from a dangerous place, a 'secondary' Hidden Pivot at 2791.19 that lies 37 points from the pattern's 2828.50 rally target. This would be unthreatening by itself, but in this case we see that buyers struggled to push past p=2753.88, the midpoint pivot, on the way up. Taken together, these two events suggest that bullish energy is ebbing from the intraday charts. If the September contract now falls to the green line as seems likely, it would trip a weak 'mechanical' buy signal that I would not recommend taking. Alternatively, buyers could extend Friday afternoon's recovery and push above last week's 2796.00 high. The 2828.50 target would be our minimum upside objective at that point, and its breach to the upside would be warning bears to flee.

The FAANGs and the Nasdaq have been on a holy tear lately, fed by money-managing chimpanzees who know they'll do just fine if they continue to throw their clients' nest eggs at fewer than a dozen stocks. If it seems like this alleged 'strategy' has reached the point of absurdity, there is evidence in the chart to support fading it. Specifically, I'll recommend buying four June 29 176 puts if and when QQQ gets within 0.08 of the 178.98 target.  If this happens on Friday, the puts would be a decent buy for around 0.95 to 1.05. If the trade fails to trigger, check back Sunday night for any adjustments I may have made._______ UPDATE (June 17, 5:10 pm. EDT): Just a small change for Monday. With QQQ trading within pennies of the 178.98 target, the puts would be a sweet buy for around 0.90 to 1.00. _______ UPDATE (June 18, 9:13 p.m.): The Cubes never got close to the rally target where we'd planned to buy put options. The trade would have been low-hanging fruit, but that's the only way I'm going to suggest that you jump aboard this vehicle. The target is still valid, so I'll let the order stand, but I don't expect it to fill.

This session began an hour ahead of a Fed announcement that was exactly as expected: a 25-basis-point increase in the Fed funds rate. The shameful hysterics this produced had trading implications for all of about eight seconds. For our part, we got steamrollered with what we’d intended as a cautious bid in TSLA. Bottom line: Don’t trade at the instant a Fed announcement is due to hit the tape. Despite this, the session is a good refresher in the psychology and rudiments of mechanical and counterintuitive trades, with a bit of psychologizing on the very lesser charts.

The FAANG stocks have exploded, but the whoop-dee-doo could be short-lived, since the rally has brought several of them to within inches of Hidden Pivot targets sent out to subscribers in timely fashion. Accordingly, a few of today's touts contain actionable advice for fading the trend -- either by shorting it, initiating covered writes against long positions, or leveraging a possible top with a 'jackpot' bet that I've posted in the chat room. If you don't subscribe but would like full access to the Rick's Picks web site, click here for a free, two-week trial subscription.

Wednesday's Fed announcement of another 25-basis-point tightening came exactly as expected, but the stock market took it poorly.  Shares initially swooned, but the session ended with a plunge to new lows that had the smell of fear.  Earlier, I had told subscribers to short the September E-Mini S&Ps if they fell to 2730, about 50 points beneath current levels. The implication was that a print at the price would send the futures yet a further 192 points lower, to 2537.50. But I've encouraged them to jump ahead of the trade with a short from current levels, since the broad averages looked ripe for a thwacking. Subscribers should stay tuned to the chat room later tonight and tomorrow morning for further guidance, particularly if a 'camouflage' set-up develops that would allow initiating a position with risk very tightly controlled. _______ UPDATE (June 14, 10:03 a.m. EDT): Did I say 'fear'?  In fact, traders have greeted the day seemingly blithely unconcerned about anything. Regardless, the 'counterintuitive' short recommended earlier remains viable, and I will track it if it triggers with a fall to 2730.00. That's assuming C=2814 has not been exceeded to the upside first.

Because mid-May's multiyear high at 3.11% precisely achieved a target I'd put out five months earlier when rates were around 2.35%, I was open to the possibility that yields had made a major top.  This seemed even more likely when the Ten-Year Note plunged to 2.76% over the next 12 days. Now, however, a strong recovery rally has shortened the odds of a move to new highs.  If it is coming, it would generate headwinds above 3.25% sufficient to slow the U.S. economy or even suffocate it, since rates for mortgages and car leases would rise as well. At the very least, based on the chart shown, Ten-Year Note yields look very likely to challenge the May high, since the target is actually 0.04 points above it. The rally could turn out to be a bull trap, either by forming a double top or, less likely, an upthrust to new heights that reverses precipitously. A third possibility is that, once above May's highs, rates will continue to rise. Whatever the case, I will be monitoring this vehicle closely, since a move into the 3.25%-3.50% range would significantly reduce the flow of oxygen to the U.S. economy's heart and lungs -- i.e., housing and autos.

The stock market was already brain-dead, but it's no longer even twitching sporadically as traders prepare for what promises to be a less-than-momentous announcement from the FOMC on Wednesday. Wall Street is expecting a rate hike of 25 basis points, which would put the fed funds rate at 1.875%  That's the exact midpoint of the target range of 1.75 to 2.00 percent, making it even less likely that the markets will react much.  Even so, we should never dismiss the possibility of a wacky response no matter how boring the news.  The ostensible excuses for the rate hike will be that employment is strong, inflation moderate and consumer spending lukewarm. However, the actual reason the Fed has been raising rates is to be in a position to lower them when the economy weakens. This seems unlikely to occur unless catalyzed by falling stock prices, which would create more urgent reasons for loosening than the Fed could handle. The silver lining for investors, at least as far as one could surmise from the financial pages, is that this bull market will last forever.