Rick Ackerman

We went over a number of vehicles including, USM, TNT, GC, ES, AMZN, FB, and TWTR. We also discused the setting up of option trades on SIL and DIA

Old-time slot machines could be gamed to pay off more frequently than usual by using a technique called "rhythming." As described by gambling legend John Scarne, it entailed playing two slot machines simultaneously. We're doing something similar by "rhythming" AMZN's ups and downs alongside price action in the broad averages. The result is a system that has been remarkably accurate in predicting key turning points. Check out the AMZN tout below to see how well it worked on Tuesday, when the stock sold off $94 after coming within 66 cents of a crystal-clear Hidden Pivot target e-mailed to subscribers the night before. AMZN has turned out to be the most important stock in fund managers' portfolios, continuing upward even when some other must-own shares -- notably Boeing and Apple -- have begun to falter.  Now, watching AMZN alone, we can be confident the broad averages will hold up as long as the stock is buoyant. Conversely, on days like Tuesday, when Amazon shares are dropping like a cinder block, we can safely assume that broad averages will plummet as well, ending the day near their lows.

Monday's low got nowhere near the 2544.00 Hidden Pivot I'd offered as a minimum downside target.  Although the futures dove 40 points, to 2602.00, in the opening hours of the regular session, this was simply to inspire fear in bulls who'd had such an easy waft higher overnight. When the June contract finally reversed upward around 11:30 a.m., it went on a 70-point tear that was virtually unbroken by any significant pullbacks. This tells us that shorts are caught badly and that the rally is likely to continue into the night.  The 15-minute chart shown suggests buyers will reach at least 2695.00 if they can blow past p=2675.25.

Bears were getting their necks wrung in after-hours trading Monday as the stock wafted lazily above regular-session highs.  The move began with a feint to the downside. This suggests that the dirtballs who engineered the mini-dive are quite confident they'll be able to take the stock higher overnight. However, even They will have to contend with the 1576.63 midpoint Hidden Pivot resistance shown. It is well located to show discernible stopping power, and the pattern from which it was derived could not be clearer. Night owls can use it as a minimum upside target, but the rest of us should move to the sidelines and simply observe. An easy move through the resistance would shorten the odds of a further rally to 1657.89, the pattern's 'D' target.  Once AMZN has touched the red line (1576.63), the stock would become a 'mechanical' buy on a a pullback to 1535.99, stop 1495.35. _______ UPDATE (March 27, 12:25 p.m.): As expected, AMZN has rallied $20 to within an inch of the 1576.63 pivot noted above.  The so-far high is 1575.97, just 66 cents from the target; however, AMZN has remained stalled near the highs for the last three hours.  If the stock closes above the pivot or trades more than $2 above it intraday, that would be cause for renewed bullishness. [Bulletin, just a minute later: The stock has gotten socked $10 over the last 90 seconds and just hit 1561.45.]_______ UPDATE (2:12 p.m.):  The 1576.63 pivot worked more powerfully and precisely than I might have imagined.  Here's a chart that shows AMZN's wicked, $47 reversal from within a hair of the target. Puts at the 1520 strike that expire on Friday have gone from $2 to $14 since this morning.

I spoke too soon when I congratulated bears over the weekend for keeping their cool. On Monday they were in a full-blown panic, desperately trying to cover short positions they regretted not having exited on Friday. The broad averages easily recouped Friday's losses and looked hellbent on recovering the even more significant losses from earlier in the week.  Although I strongly doubt the rally will hit new record highs, I'll be ready for it nonetheless if buyers obliterate just a few more prior peaks on the hourly chart without pausing for breath. Were that to occur, I would grow even more wary of the possibility that a move into record territory would set up Mama Bear's onslaught perfectly. Permabulls would be giddy at that point with visions of Dow 30,000, while bears would be even more "bullish" as the pain of fighting the tape became not merely pointless, but excruciating. For now we'll put aside such speculation and focus on the lesser charts, where virtually every significant trend change must begin.

If DaBoyz were going to reverse the blood-dimmed tide last week, it was most likely to have occurred in the final hour on Friday, when bears typically grow antsy about taking short positions over the weekend. Short-covering, as we know, is by far the most potent and dynamic source of buying power -- not only in bull markets, but in bear markets as well. Rooted in panic, short-covering is the only source of buying strong enough to push stocks through heavy layers of supply and to new record highs. In comparison, the steady flow of institutional money into a bull market is a relative trickle -- supportive of stocks, but insufficient to spike them to unaccustomed new levels. Alas, the broad averages ended last week only ticks off their lows, unable to summon even a weak flurry of short-covering to save face. As such, stocks will confront the same problem they did last Sunday when index futures opened for trading: i.e., a dearth of good news.  Still worse for investors is that the single kind of news they have been forced to care about -- i.e., mostly-meaningless blather from the Fed -- laid an egg Wednesday with a well-discounted announcement about tightening that literally no one bought into. Dollar's Role in Triggering a Bear Market It'll be a while before we hear anything more from the Fed, and ordinarily we might expect shares to drift trendlessly for the next few weeks.  The trouble is, the broad averages have not been drifting lately; rather, they have been falling hard and threatening to gain momentum. That is my expectation, and I have precisely qualified it with a 22,544 (or alternatively 22,822) Dow target that lies 989 points below.  The selloff could steepen, as I noted here earlier, if the dollar starts to

AMZN, our most important and useful bellwether for gauging the health of the bull market, ended the week just a tick off the bottom of Friday's plunge. This wouldn't be significant by itself, but the fact that the close was also beneath the 1497.81 target shown is not a healthy sign. Looking ahead, a minor Hidden pivot target at 1474.44 (60-minute, A=1565.46 on 3/22) can serve as a minimum downside objective for the very near-term. However, I expect the March 2 low at 1455.01 to have greater consequences for a possible bottom.

As promised, I've adjusted my sights upward, now to the 1367.50 midpoint Hidden Pivot of the felicitous pattern shown. It's tempting to put a move to D=1431.40 on our list of likelihoods, but my forecasts will be of greater value to you if I spell out bullish possibilities one easily predictable step at a time. Thus is the 1367.50 pivot a logical benchmark to use for a minimum upside target for the near term. This is particularly so because Friday's surge exceeded two middling peaks: one internal; the other, external.  Although it will be possible to board at any time using camouflage because the big picture has given us a go-ahead to trade with a bullish bias, no big-picture 'mechanical' entry will be possible until such time as April Gold pulls back from within the range p=1367.50 - 1384.00 (or s0). _______ UPDATE (March 27, 9:35 p.m.):  Gold futures got no lift whatsoever when the stock market reversed and began to plummet. This was not merely disappointing, it was dismal.  I cannot say what is ailing gold at the moment, but after today's leaden performance, we can only infer that bullion quotes will fall over the near term.  The pattern shown in this chart does not yet have a point 'C' high, but once one occurs, you can use it to project support levels for the next leg down.

Sellers crushed the 2631 midpoint Hidden Pivot support shown in the chart, significantly shortening the odds of a further plunge to as low as 2456.50.  Any worse than that seems unlikely over the near term because the target is so clear, but we should use p2=2544 regardless as our minimum downside objective for the near term. A rally back up to the green line would trigger a 'mechanical' short, stop 2807.50, but it seems unlikely that we'll be gifted with such an opportunity. Under the circumstances, any shorts initiated Sunday evening or Monday morning should be based on downtrending 'camouflage' ABCs of lesser degree.  Start with patterns like this one, then zoom down to a 5-minute-or-less chart to create 'camouflage' entry set-ups with initial risk under very tight control.