Rick Ackerman

Stocks have topped about where we'd expected, although the selloff so far has been too timid for us to judge whether the decline is likely to snowball. I wrote here on Sunday night that if the S&P futures did not decline precipitously from Friday's record close, they'd be on their way up to at least 2910.00. They did fall, but how much is 'precipitously'?  I'd say about 500 points for the Dow, or twice as much again as they fell on Monday.  For the E-Mini S&Ps, a further fall of about 50 points would suggest that bulls are finally getting their comeuppance. However, it wouldn't take that much to hint that the S&Ps are in trouble. For a precise level, check my E-Mini S&P forecast below.

Our Feb 2 30 calls tripled in value with yesterday's surge in S&P 500 volatility. In this case persistence paid off, since we stuck with the position even though a key support at 26.52 had been violated. The breach was small, however, and our calls, purchased by most subscribers for 0.36 or less, still had a couple of weeks left on them. We were also able to 'double out' on half the position last week, reducing the dollar risk of any calls still held to zero.  Since we're all in the comfort zone now, I'll recommend scaling out of the remaining calls as you please.  Officially, I'll offer a single contract that remains for 1.09, the target of the pattern shown in the inset. If you have three or more left, I'd recommend keeping at least one until later in the week for a swing at the fences -- i.e., a profit ten times the $36 we paid. ______ UPDATE (Jan 30, 11:00 a.m.): The calls opened for 1.38, allowing an exit for nearly four times the original price. The realized gain was $133, based on an original position of two contracts  The calls have since traded as high as 2.34, with subscribers reporting commensurate gains. Some evidently are holding 'a few' calls for that swing at the fences. ______ UPDATE (Jan  31, 5:26 p.m.): Any calls remaining are a  longshot bet at this point. Even so, I'd suggest holding one or two until they expire on Friday. ______ UPDATE (Feb 3, 1:10 p.m.): The calls that subscribers bought for 0.36 ten days earlier could have been cashed out for more than ten times that if held till the final bell on Friday. The broad sell-off pushed them as high as 3.80 intraday.

The futures pushed to the very top of a range where we might have expected considerable resistance. Now, if they don't retreat precipitously on Monday from their highs, look for the rally to continue to at least 2910.00 (see inset). That would equate to a Dow rally of about 300 points. However, it would also fall at least 250 points shy of the 27251 target we've been using to stay confidently on the right side of a trend that has gone on for far too long without correcting. The bullish pattern looks straightforward and reliable, but I am not recommending shorting its target unless you've racked up at least 5-10 points of profits on the way up. _______ UPDATE (Jan 29, 7:59 p.m.): The futures did indeed retreat, although we'll need to see quite a bit more than the 23-point drop that has occurred so far before we blow taps for the nine-year-old bull market. In fact, the decline has yet to surpass even a single prior low on the hourly chart, let alone the two we require to signal the creation of a bearish impulse leg. That would take a print at 2822.50. I expect index futures to fall at least somewhat overnight and to open weak, but it's anyone's guess whether the buy-the-dips crowd will step in around mid-morning if stocks get hit badly, since old habits die hard.  In any case, I'd suggest watching from the sidelines.

Buyers are closing fast on the 27,571 target I flagged here three weeks ago, when the Indoos were trading 1300 points lower. This has happened more quickly than I might have imagined, although it's hardly a surprise. The rally could not get much steeper, although we should be open to the possibility that a 500-point day gets us there by mid-week. The pattern shown encompasses the entire bull market and yields the highest projection that can be extrapolated from the weekly chart. Any higher targeting would need to come from the C-D leg alone and assume an extraordinary extension of the larger, 'natural' ABCD. ______ UPDATE (Jan 29, 8:16 p.m.): The Indoos would have to fall below 26,293 to generate a bearish impulse leg on the hourly chart.  This they haven't done since early November, when an uncharacteristic string of weak days ultimately generated no downforce or follow-through. This time, however, the blue chip average is falling from a greater height and will be especially vulnerable because there have been no corrections worthy of the name in many months. ______ UPDATE (Jan 30, 9:04 p.m.): The hourly chart went bearish with Tuesday's plunge, but it'll take a further decline exceeding 25,257 to turn the daily chart negative. The Indoos could end Wednesday's session sitting above today's close, but I doubt this will occur without their having gone at least 200 points lower intraday. _______ UPDATE (Feb 1, 5:34 p.m.): Use the 25,741 target shown to guide your trading over the next day or two. The Indoos have tripped a 'mechanical' short at 26,188, stop 26,338, that is tied to the target.

Wednesday's surge past a 'secondary pivot' at 1351.80 was so decisive that there should be little doubt as to whether February Gold will achieve the 1389.60 target that has guided us confidently for more than a month. Of greater importance is whether buyers can push past the target; for if they do so, and easily, it would suggest that the bull run begun in the final days of 2016 is capable of achieving much higher prices. This would become even more likely if the current surge, without pulling back discernibly on the daily chart, surpasses the 1397.90 peak recorded four months earlier. _______ UPDATE (Jan 25, 5:07 p.m. EST): Buyers look spent, at least for the moment, but we'll treat a pullback to the red line, a midpoint Hidden Pivot at 1314.00, as a mechanical buying opportunity.  Since the implied entry risk would be a whopping $2520 per contract if we deploy the required 1288.80 stop-loss, we'll instead use a mechanical trigger to generate a 'camouflage' entry signal. Ideally, this would lower the initial risk to perhaps $40-$120 per contract.  If you're interested in seeing how this is done, tune to the chat room when March Gold gets within $5 of the target.  _______ UPDATE (Jan 28, 5:05 p.m.): The 1344.50 pivot shown here looks enticing for tightly stopped bottom-fishing. Let's bid there for a single contract, stop 1343.90, day order. _______ UPDATE (Jan 29, 9:27 a.m.):  Sellers have driven the futures as low as 1339.50, stopping out our bottom-fishing trade for a small loss of around $60.  The breach of the 1344.50 pivot implies more weakness over the near term to at least 1333.00._______ UPDATE (Jan 29, 8:25 p.m.): Just a few more inches to go before 1333.00 is hit. Let's see if it holds. I'm not going to

Since VXX has yet to break decisively below the longstanding Hidden Pivot target at 26.32, I'll suggest maintaining a token call position. The options are exorbitantly priced, trading with implied valuations more than two-and-a-half-times VXX's actual volatility. For that reason, we'll bid for just two of them now with money we can afford to lose painlessly. Bid 0.44 for two Feb2 30 calls, day order. Check for updates intraday, since I may update my guidance if the options appear to be just-out-of-reach. _______ UPDATE (Jan 22, 10:19 a.m. EST): VXX: Lower the bid for the VXX 2 Feb 30 calls to 0.36. _______ UPDATE (12:37 p.m.): The order has filled. Now kiss the $72 good-bye and be comforted by the fact that some poor sucker paid twice as much -- today -- for those same calls (and up to 1.37 just a few days ago). _______ UPDATE (Jan 24, 4:25 p.m.): The calls popped to 0.70 today. Since several subscribers reported taking at least a partial profit on the move, I will track a single remaining contract with a cost basis of 0.05.  For future reference, please note that I always recommend cashing out of half of any option position when it has doubled in value. _______ UPDATE (Jan 28, 5:05 p.m.): VXX topped to-the-tick at a 28.31 target I posted in the chat room Thursday, completing a rally cycle begun two weeks ago. Buyers will need to get second wind this week to push our calls in-the-black, but profit-taking on half of the original position has reduced our exposure almost to zero.

The stock market was at its looney best last week as things drew to a close. It was like a Friday from the good old days. AMZN was up nearly 25 points, Facebook made a psychotic lunge for $190 just to screw with the heads of traders short call options at that strike, and the broad averages turned their nearly vertical climb into a fully vertical one.  Casino mega-mogul Steve Wynn became the latest powerful white guy to be snared by sexual-harassment jihadis, and a Japanese biggie in the cryptocurrency world fessed up to having somehow lost $400 million worth of tokens. If you were short Wynn Resorts or Coincheck Inc. you had a great day. As for the rest of us -- or at least those of us who hang out in the Rick's Picks chat room -- there was nervous anticipation as the E-Mini S&Ps climbed toward and then exceeded a level that had looked promising for a top.  Yes, it's true: We never learn. But fixating on possible tops does alleviate the boredom of watching the market do the same thing every day, rising as predictably as a cloud of methane above a cow pasture. We also attempted a 'Friday Jackpot Bet' on Facebook that was based on a suggestion from a chat-room denizen. The call options we bought traded as low as 0.05 in the opening minutes when Wall Street's reptilian masters let Facebook shares drop like they were radioactive.  The calls rocketed to 0.18 just a few minutes later when the stock bounced weakly. But because we'd paid 0.10 for them, not 0.05, we were ultimately unable to even double our money, let alone octuple it as is more typical for this type of bet. Oh well. The experience was sufficiently interesting that we'll likely

This lesson was an un-themed smorgasbord, with cheese, crackers, fried duck’s feet, lutefisk and Rocky Mountain oysters. Some who attended called it a “great session” in the chat room. See for yourself. We did not identify any trades that could be attempted in real time, but as always, “doing nothing” provided a learning experience.

Even with some considerable drag from AAPL, the world's most valuable publicly traded company, the broad averages chugged effortlessly higher on Thursday, extending their seldomly rebuked winning streak to yet another record high. Apple shares fell 1.5%, but this loss was more than offset by lunatic-powered rallies in AMZN, BA and NFLX.  Respectively, they rose 1.5%, 2.6% and 3.1%. It was all in a day's work for these high-fliers, although it is surely less work than it might have seemed, given that there are no aggressive institutional sellers in any of these stocks. If you want' em, you'll have to pay up!  Shhhhh. That is the bull market's dirty secret. No question, the index-fund geniuses on Wall Street have a great thing going for them compared to those who actually work for a living. If AMZN, BA and NFLX were seed crops, farmer Brown would sleep till noon every day, then spend his afternoons whittling balsa tractors, tying flies and fishing for steelhead. Episodes of Justified, Banshee and Game of Thrones would follow leisurely, two-hour dinners. At the end of the year, he would call his broker to learn that he'd cleared more than a million dollars -- after taxes. Has any farmer who ever lived been gifted with a nine-year run of good luck?