Rick Ackerman

I've lowered my bear-market target to 2456.50 because I was not comfortable with the original target at 2526.50. It required the use of a one-off point 'A' high that simply doesn't look right on the daily chart. The one shown uses what I refer to as a 'marquee' high, but I think it has a good chance nonetheless of nailing the exact bottom of the bear cycle begun in late January.  The swings on the hourly chart have been tradeable, but not according to any Hidden Pivot logic that I would warrant as easy or obvious. You can try tightly stopped bottom-fishing at 2575.00, but that's all I am able to suggest for now (60-min, A=2718.00 on 4/18; B=2611.25 on 4/25; C= 2681.75). _______ UPDATE (May 6, 5:07 p.m. EDT): The hourly chart turned bullish as last week ended, with the futures bound, apparently, for a minimum 2724.50 (A=2584.50 on 4/6).  However, as the chart above makes clear, any rally that falls shy of the 2744.00 peak recorded on March 21 should be regarded as mere noise. _______ UPDATE (May 7, 89:08 p.m.): Pivoteers, please take note: Today's rally topped midway between p and p2 of this pattern, implying that a pullback to the green line would offer an excellent 'mechanical' buying opportunity. If geopolitical news heats up, though, be aware that leaving a bid at the green line could be especially risky.

Friday's big rally doubled the value of our calls, but I am so skeptical about this showy buying binge that I will suggest selling the options at-the-market when stocks begin to trade on Monday. This will likely produce a loss, since subscribers paid as much as 0.85 for the May 18 248s. But don't assume that because they went from 0.24 to 0.48 on Friday that they will continue to ascend at that rate.  Much more likely, unless the broad averages explode to the upside again, is that the options will barely uptick; then they will sink back into oblivion, as options nearly always do when bought against the dominant trend. (Also, did you notice in the chart that DIA became an appealing 'mechanical' short at the green line?) If you want to hold onto the options anyway for what-the-hell reasons, that's okay too. But officially, we'll plan to take our lumps at the opening bell.  Check back here Sunday evening in any case, since it's remotely possible index futures will be doing something crazy-bullish at that time. _______ UPDATE (May 7, 8:12 p.m. EDT): As anticipated, the options blipped briefly in the early going (to a high of 0.90) before relapsing to close at 0.50. Based on reports in the chat room, I'll score the trade as a push.  Losses in any event would have been small.

If they ever make such a film, Andy Warhol's Empire could serve as an artistic model.  A cult classic that is seldom if ever screened outside of the Warhol Museum in Pittsburgh, Empire runs slightly longer than eight hours. Every thrill-packed moment of it is devoted to a static image of the Empire State Building on a sultry night back in July 1964. The film was shot at 24 frames per second over 6.5 hours, but it is projected in slow motion at 16 frames per second, presumably so that moviegoers dosed with LSD can synchronize their brains to the 'action' on-screen, such as it is. 'Bear Market: The Movie!' would make Empire look like a cinematic luge ride in comparison -- especially on days like Thursday, when the Dow Industrials traversed more than 1100 points up and down, only to achieve a net gain for the day of five points. Summiting Everest in Minutes How would the day look on film if 'Bear Market: The Movie' were accelerated a thousand-fold? The entire swoon would play out in under 15 seconds. Imagine watching a documentary about mountaineers summiting Mt. Everest and returning to base. This usually take about a month. But projected in digital-video hyperdrive, the whole expedition would consume less than ten minutes. At that speed, mountain climbers shot from a distance might look little different from price-bar squiggles on a stock chart. Unfortunately, there is no accelerating our way through a bear market. If we are in one now, it's going to be a painful and seemingly interminable slog -- one that features many gratuitous price swings like Thursday's. At the end of it, investors will have no more appetite for stocks than moviegoers would for reruns of Empire.

This session offers a concise summary of the simple rules governing ‘mechanical’ trades. We focused on mechanical set-ups in several popular trading vehicles, paying particular attention to the quality of impulse legs associated with each. However, it is a stock in which we passed up a seemingly appealing mechanical entry opportunity where you will find some of the most insightful material on the subject.

It's been a long time since anyone on Wall Street cared about what was going on in the geopolitical world, but that may be about to change. A quiet war has been heating up between Israel and Iran with the potential to send an already weak U.S. stock market into a steep dive. Recently, a bunker-buster bomb reportedly took out hundreds of missiles Iran was hiding on a Syrian base.  Because Hezbollah is likely to possess some of the same weapons, it's no longer unthinkable that Israel would strike the terrorist group's base of operations in Lebanon pre-emptively. Flaming kites from Gaza have been causing major damage to Israeli farms. Add to this volatile mix an impending decision by Trump about whether to extend the nuclear deal with Iran. There are very good reasons why he should not.  Read this New York Times column by Bret Stephens if you think Iran has lived up to its side of the bargain. There is also the planned move, on May 15, of the U.S. embassy from Tel Aviv to Jerusalem, an event that Israel's enemies may treat as an opportunity to disrupt the world in some horrific way.  The Middle East is a powder keg. If it is about to explode, the clearest and earliest warning won't be found on the evening news, but in crude oil's charts. We should see the price of oil move above $70 a barrel within the next week or so if war is imminent. For your information, NYMEX futures settled Wednesday at $67.68.

The Dollar Index is creeping up on an important resistance -- a peak recorded in January at 92.64 just before the dollar went into a steep dive. If this daunting impediment gives way easily and is exceeded by more than 15 to 20 cents over the next day or two, it would presumably re-energize buyers for an even bolder next push. The most important resistance on the chart shown lies at 95.15, where the dollar made a double top last autumn. Once above it, DXY would be hard to stop.  This could hold drastic implications for the U.S. and global economies.  Chief among them would be the pressure it would put on all who owe dollars, and on foreigners who buy U.S. goods.  For a big-picture view, check out the DXY tout at the bottom of the list.

Our pair of May 18 248 calls came back from the dead with the spirited bounce off Tuesday's bombed-out lows. The options had traded for as much as 1.52 on Monday, although Rick's Picks subscribers, following my instructions, were able to buy them for 0.85 or less toward the end of the day.  But on Tuesday, with the Indoos down more than 350 points, the calls fell to 0.26 before recovering to 0.50 on the close. For now, I'll suggest doing nothing further.  The bounce in DIA is encouraging, but it'll need to surpass the 245.56 peak notched last Thursday on the way down to give our options a fighting chance. _______ UPDATE (May 3, 4:48 p.m.): We sure as heck wouldn't short the May 18 248 calls for the pittance (0.24) quoted at the close. That in itself implies that neither should we despair over the prospect of holding them for a while longer.  They still have two weeks left on them, and anything could happen.  For now, offer half the position (i.e., one option) to close for 1.10, good-till-canceled.

The 2526.50 target I'd flagged if things got ugly is still in play, but we'll focus for the time being on the promising bounce from Tuesday's 2623.25 low. If it exceeds  2688.50 by Thursday's close, bulls would be back in charge, at least for the near term. And if they can push this erstwhile brick above the 2807.25 peak recorded in mid-March, shorts would be wise to dive for cover.  For now, I'll recommend using the pattern shown to guide you. An easy move past the 2678.25 midpoint pivot would portend more upside to at least 2745.25.  Alternatively, a relapse would bring the 2526.50 target back into focus._______ UPDATE (May 7, 7:56 p.m. EDT): Today's rally to 2681.50 brought the futures to the midway point between p and p2 (click here for chart), implying that a pullback to the green line would offer an excellent 'mechanical' buying opportunity.

For the second time in a week the Dow has bounced sharply from the 23,806 midpoint Hidden Pivot support shown. How far will the rally go?  That's impossible to predict, nor do we pretend to have a crystal ball. However, the fact that both reversals occurred almost exactly at the pivot makes one conceivable sequence of events very predictable, as follows: If the Dow should decisively breach the pivot intraday (meaning by at least 40-50 points), or if it should close for two consecutive days beneath the pivot, that would imply more downside to exactly 22,754. Alternatively, and for all we know, the uptrend begun off today's 23,808 low could be the start of a move to new record highs over the next several months. We will probably not have to wait long for Mr. Market to tip his hand, since the strength or perhaps weakness of the uptrend cannot but reveal itself on the intraday charts over the next few days. Yes, it will still be a guessing game; but our guesses will be sufficiently 'educated' that we are unlikely to lose money acting on poorly informed hunches._______ UPDATE (May 3, 5:20 p.m.):  Today's 400-point reversal somehow failed to impress. In any event, it would take a print exceeding the 24,977 'external' peak recorded on March 21 for bulls to demonstrate they are serious. I should mention a 22,544 target that is equivalent to my new target for the E-Mini S&s. It uses the 'marquee' high at 26,616 as a point 'A' rather than the one-off 'A' at 26,338. _______ UPDATE (May 7, 8:20 p.m.): A modest rally by Wednesday afternoon exceeding 24580 would generate a promising impulse leg on the daily chart. Here's the picture.  ________ UPDATE (May 9, 8:59 p.m.): The Dow slightly exceeded our 24,850 benchmark,