Rick Ackerman

Bulls gave back 25% of Thursday's substantial gains in the final minutes of the session, presumably to preserve some buying power for Friday. A robust surge would hit the 24,837 [corrected] rally target of the pattern shown, but buyers will have to do a little better than that to leave themselves in good shape for next week. Specifically, they'll need to surpass the 24,977 'external' peak to remain in command Sunday evening. It lies exactly 494 points above and is crucial to the health of the intraday charts. If the Indoos were to close above the peak ahead of the weekend, that would add to a picture of short-term strength. But you should set a screen alert at 25,449, where an even more important peak was recorded nine days earlier. It is the most significant supply obstacle the Dow will have faced since the initial bounce off early February's lows. ______ UPDATE (April 15, 5;08 p.m. EDT): Last week's tedium changed nothing in the analysis given above, although I'll mention that a pullback to the green line (24,012) would trip a 'mechanical' buy signal. Traders keen on leveraging it can interpolate using DIA. (Please note that the 24,837 target given above corrects a 50-point error.)_______ UPDATE (April 16, 5:25 p.m.): Today's 200-point rally was most unimpressive, since there were no significant obstacles in its path.  Let's see how well buyers handle the two impediments shown in this chart. _______ UPDATE (April 17, 11:22 p.m.):  Today's equally unimpressive 213-point rally topped a millimeter from the lower target, 24837, so the jury is still out. _______ UPDATE (April 19, 7:22 p.m.): If the Indoos continue their retreat from Tuesday's high, expect them to fall to at least 24,042, a crystal-clear midpoint support.  If this occurs early in the session, don't hesitate to

Traders demolished the shares of three of America's biggest banks -- JP Morgan, Citigroup and Wells Fargo -- on Friday after the companies reported very impressive Q1 earnings.  A classic example of 'buy the rumor, sell the news"?  So it would seem, although it remains to be determined whether Wall Street will punish other economic sectors in the weeks ahead for similar sins of success. Will the shares of companies involved in energy, pharmaceuticals and manufacturing get pummeled no matter how strong their earnings? It will come down to whether investors think their performance has peaked. Earnings reports due out over the next several weeks are expected to be the best since 2010. However, interest rates have been rising for two years, and this is already creating headwinds in the minds of investors, if not yet in the statistical economy. Add a dollop of trade-war paranoia and it's difficult to see stocks moving significantly higher in the months ahead. On the other hand, the long-term charts do not suggest a collapse is imminent.  Range-trading for the next six to nine months would be like Chinese water-torture, but we should be prepared for it nonetheless as a possible second-best case for stocks in 2018.

There are a bunch of minor, bullish patterns we can use to gauge bulls' spirits here, but I've picked a so-so one to avoid reading the chart too bullishly or bearishly. In the picture shown, the June contract would need to push decisively past p=1355.20, meaning to 1360 or higher intraday; or close for two consecutive days above it, in order to become an odds-on shot to hit D=1374.80. It's been a while since gold futures attained even such a minor target, let alone exceeded one, so we won't presume too much. _______ UPDATE (April 18, 9:59 p.m. EDT): Buyers fell just shy of the 1360 benchmark given above, but the 1359.00 high actually achieved was sufficient to generate a 'mechanical' bid at X=1344.30, stop 1335.40.  Because the initial risk would be $900 per contract, my suggestion is to paper-trade unless you know how to convert the signal to a 'camouflage' set-up.  Stay close to the chat room for real-time guidance on this. _______ UPDATE (April 19, 7:30 p.m.): I'm rarely a buyer of this vehicle, but in this instance you could attempt it with a stop-loss as tight as four ticks:  1344.50 bid, stop 1344.10.  Here's the picture. ________UPDATE (April 20, 11:15 p.m.): The trade was stopped out for a loss of $40/contract. However, this held bearish implications for the subsequent rally to x=1347.00 (the green line) five hours later. A mechanical short there, stop 1349.60, would have produced a gain of as much as $770 per contract later that morning._______ UPDATE (April 22, 12:44 p.m.):  A subscriber took me to task for supposedly spinning a losing trade into a would-be winner.  Longtime subscribers will know that Rick's Picks is a no-spin zone, devoid of shoulda-woulda-coulda trades. I mentioned the short-gold play above -- after-the-fact -- because it was

Consumer sentiment is the only news on the economic calendar for Friday, so the stock market will be on its own if DaBoyz are intent on stirring up some craziness to end the week. Thursday's rally was strong but hardly insane, and the moderate selloff in the final 30 minutes should help dry up selling overnight. Accordingly, we'll be looking to fade moderate weakness on the opening, so check the chat room for a possible 'jackpot bet' if you want to try leveraging a possible reversal on-the-cheap. _______ UPDATE (April 13, 1:15 p.m. EDT): In retrospect it is moderate strength we need have faded, but this will always be a coin-toss bet. Next time, we can be prepared with two such bets, one in either direction.  A bid for Apr 13 1635 puts would have produced a winning outcome today, since the option traded down to 1.04 in the first 15 minutes before climbing above 4.00 shortly thereafter.

Bulls have been surpassing every benchmark in sight, including Hidden Pivot resistances of various degree and prior peaks such as the one at 146^21 labeled in the chart (click on inset). We'll need to see a pullback and a follow-through (C-D) leg to get a precise idea of how much buying power is behind the rally, but the fact that we've seen no retracements on the daily chart for two weeks is certainly encouraging. The move has been strong enough that even a pullback to as low as 143^00 would not diminish the promising look of the daily chart.  Turning the weekly chart bullish is another matter, however, since that would require a rally exceeding 164^31, an important peak that lies far above.  A print there would break the back of the bear market begun nearly three years ago. _______ UPDATE (April 10, 8:57 p.m.): Bulls have shown no spunk lately, but the short-term picture is mildly bullish nonetheless. You can use the 147^17 target shown as a minimum upside objective if the futures leap above the red line (146^05). ________ UPDATE (April 12, 5:05 p.m.): The futures came down so hard today that it will offer a good test of the 'mechanical' buy signal tripped at 145^15 (the green line), stop 144^24. I'm recommending that you paper trade this one to increase your familiarity with 'mechanical' trades, most particularly unenticing ones like this, which I'd rate a mere '6' out of 10. _______ UPDATE (April 16, 5:35 p.m.) A gratuitous feint beneath 144^25 this morning stopped out the trade. Since there are now fewer bulls aboard to weigh the futures down, the so-far spritely bounce should easily carry to 146^16 or higher over the next couple of days. If not, take it as a sign of more weakness to

Volatility has been challenging lately, to put it mildly. On Monday, the futures gave back more than three-quarters of the 50-point gain they'd achieved with a running start on Sunday night. The end-of-day result was an ostensibly bullish pattern and a 'mechanical' buy signal at 2612.99 (the green line), stop 2584.25.  In general, mechanical signals are intended to make the most of wild swings, and to tame them. However, I'll recommend paper-trading this middling opportunity, since the falling-piano effect was quite palpable at the close. The theory behind the trade is that we would be getting in after many bulls had gotten crushed by this afternoon's selloff. But the required 28-point (i.e., $1400 per contract) stop-loss seems too rich, considering we'd be leashing ourselves to a rabid badger. ______ UPDATE (April 10, 8:37 p.m. EDT): The trade worked exactly as it was supposed to have worked. Now let's see if the futures can achieve the pattern's 2698.00 target -- a further supposition of the original trade. In practice, half the position was to have been exited at p=2641.63 for a $1400 gain per contact. Another 25% should be cashed out at or near 2698.00, with 25% held for a swing at the fences (i.e., 2900+).________ UPDATE (April 11, 5:15 p.m.): Zzzzzzzzzz. No change. ________ UPDATE (April 12, 1:00 p.m.): After screwing the pooch for three straight days the futures finally lifted off the launcher, presumably bound for the 2697.25 target shown. A pullback to the red line (2640.88) would trip a 'mechanical' buy, stop 2622.00.

Political headlines have grown so boring and stale lately that a teen prank keeps turning up near the top of the news. This is a story we'll continue to hear about until something even stupider captures our attention. I'm referring to the Tennessee co-ed who had herself photographed, bare midriff, with a pistol tucked in her waistband. With a 'Women for Trump' t-shirt to complete her political statement, it's not hard to see why the young lady's picture has gone viral (click on inset). Her politics apparently are conservative, and that's why her stunt has brought the thought police out in force.  Some things we simply don't joke about, and guns are near the top of the list. But if we stopped joking about everything that the forces of political correctness have declared out-of-bounds, comedy as we know it would cease to exist, along with its salutary effect on our badly frayed nerves .  Come to think of it, other than late-night talk-show jokes about Trump, comedy in TV-land actually has ceased to exist.  Or am I just imagining it?

With 20-20 hindsight, Rick looks at option trades in VXX and DIA as though we’d done them with perfect timing. The hypothetical results are going to surprise you, but they will also leave you better prepared to distinguish good opportunities from bad the next time you are thinking about jumping on puts or calls. Turns out it’s not enough to merely double your money; you’ll have to do much better to succeed at the game. In this lesson, you will learn a couple of tricks that can help.

[The following observations are from my friend and colleague Larry Amernick. He is a former president of the Technical Security Analysts Association of San Francisco, the oldest such group in the United States.  RA] Three 90% down-volume days have occurred in the last eleven trading days. The concept of a 90% day was first described by Marty Zweig in his 1971 bestseller, Winning on Wall Street. Zweig had tested data that went back decades. He saw that market bottoms occurred after one or more 90% down-volume days was followed by two 90% up days within a week or two, forming a v-shaped bottom. Zweig also pointed out that there were an average of four 90% days in one year, with many years having none. Paul Desmond from Lowry’s also conducted extensive research on the subject. He examined data going back to 1933 and confirmed Zweig’s findings. The 90% phenomenon, though rare, became a common occurrence during the bear market from the end of 2007 to early 2009. In 2017, there were no 90% up or down days. In early February of 2018, there were three 90% down days in one week. A cluster of these that occur near market tops point to continuing market weakness during the next six months. We now have six such days this year. We have not seen one 90% up day! Sell the Rallies! The phenomenon suggests that all rallies should be used to lighten up on long-term holdings and head to the sidelines. Although many market pundits have pointed that the February low has held despite a number of heavy selling days, the 90% phenomenon hints that the February low will indeed be taken out and that point will become an important future resistance level. [Note: I will update if the indicator reverses so