Rick Ackerman

I've drum-rolled numerous rally targets over the course of this nine-year-old bull market, some ostensibly capable of stopping the herd in its tracks. A few worked beautifully -- for a few days, anyway. But none contained buyers for much longer than that. Now, both the E-Mini S&Ps and the Dow are rapidly approaching the very last long-term targets I can offer that have what might be called eye appeal. I am not spotlighting either of them because betting against this bull has become like betting against Tom Brady, the Patriots' aging but nonetheless unstoppable quarterback. I should mention as well that the E-Mini S&Ps pattern that produced the 'interesting' target just above is one of the strangest I've ever used. It comes from a composite chart and is therefore unlikely to work with penny-precision, assuming it works at all. Even so, you should check it out, along with the chart, in the E-Mini S&P tout below. And this one too, for the Wilshire 2500.   You never know.

The futures on Wednesday somewhat exceeded a 2848.25 target I'd mentioned here, topping intraday at 2855.25. Ordinarily I would regard this overshoot, although small, as distinctly bullish. In this case, however, I will allow for the possibility that a 2868.50 target that shows up on the composite weekly chart (click on inset) is going to repel bulls, at least for a while and in potentially tradable fashion. I cannot give you a penny-precise target, since the ABC coordinates on the composite chart come from different months. However, I expect to see real stopping power within perhaps 4-7 points either way of 2868.50. We shall soon see.

The  Dollar Index is closing fast on an 88.29 downside target that was first signaled back in November. I drum-rolled this 'Hidden Pivot support' a week ago at FXStreet.com because the site's many followers are undoubtedly eager for a USD forecast that is clear, confident and precise.  In this case the target is especially important, since the bearish pattern that produced it is such a textbook beauty.  What this means is that we will be able to accurately assess the dollar's health based on the way DXY interacts with 88.29. If it should close below that number for two consecutive days, or trade more than 0.20 points beneath it intraday, that would suggest the dollar's long decline still has a ways to go -- perhaps a considerable ways. How considerable? My new target following a decisive breach of 88.29 would be 82.34 -- a 7.7% fall from current levels. Keep these numbers well in mind, and plan accordingly. _______ UPDATE (Jan 25, 5:17 p.m.): Coy as ever, DXY bounced sharply from a low at 88.44, just 0.15 points from our target, after plummeting earlier in the day. The rally would need to hit 91.01 to imply that a major turnaround had begun. Until that happens, we'll be alert to a possible relapse to the still-viable target at 88.29. Its crucial importance to the intermediate-to-long-term technical picture remains as described above. _______ UPDATE (Jan 31, 5:57 p.m.): The Dollar Index has been thrashing about since bottoming a week ago just 0.15 points from a longstanding target I'd flagged at 88.29.  The chop looks like base-building, but if it proves otherwise and DXY closes for two consecutive weekly bars below 88.29, I'd infer it was on its way down to at least 87.40 over the near-term, or possibly even to the 82.34

Here's a Bloomberg headline that will have grabbed zero attention: Tech Stocks Are Showing Signs of Overheating.  I swear I didn't make that up. Some guy on the copy desk, challenged to whet readers' appetite for a gratuitous stock-market article written by one Luke Kawa, tried to oversell it as best he could. It reminds me of a Lenny Bruce routine concerning a supposed City of Miami pamphlet entitled Tips for Swimming in Shark-Infested Water.  "Are you ready for the first tip?" asks Bruce. "Get out of the water." And the second:  "Try to ward off the shark with a stick or some sharp object." "Yeah," Bruce adds -- "like the stump of the other leg he didn't get." So what's so overheated about the tech stocks? Consider the vertical (and steepening) ascent of Microsoft (inset). If anything, the pace of MSFT's steep climb has lagged some other portfolio-wacko faves like NFLX, GOOG and AMZN.  This is not bad for a company whose latest operating system, Windows 10 (Creators Edition!), has more glitches than a Latvian shop manual for a Japanese sports car. This would hardly be a concern on Wall Street, where too much of a bad thing seems never to be enough.  Thus, the overheating Mr. Kawa has discerned may have significantly farther to go before it produces a meltdown. We'll give him the final word, though -- and caveat emptor:  "A net 39 of the Nasdaq 100 Index’s constituents are trading at a relative strength above 70 -- the most since June 2. The last time the group was flashing an overbought signal that strong, the tech-heavy gauge took a 5 percent tumble over the next month." Just so.

The Dow's 142-point gain on Monday was more or less obligatory, since bulls are wont to begin each new week with a show of strength. I hesitate to call it bravado, since there's nothing to suggest any lack of confidence beneath the surface. The 25,215 close left the blue chip average about a thousand points beneath my current rally target at 27,251. As always, we should be prepared for seemingly ambitious targets to be achieved more quickly than in days of yore, when stocks occasionally sold off for more than a day or two. You'd have to be and old-timer to remember those days, since the new normal is just up, up and away -- and no looking back.

I've rejiggered my rally target a couple of times, mainly because the stock's ascent has been so slow and boring. The targets given here previously at 184.10 and 194.77 are still viable, but let's use the one shown, at 187.39, since it looks reliable and potentially easy to trade. Based on this pattern, AAPL tripped a 'mechanical' buy last week at 176.93, stop 173.44. Ordinarily I'd say you can bid there for 'sloppy seconds,' but this would hold special risks on a Monday. Instead, I'll suggest waiting for a better opportunity and following along if you want to be up-to-speed if and when it happens. _______ UPDATE (Jan 23, 5:23 p.m.): Sloppy seconds are staring us in the face now that AAPL has relapsed to the red line.  Let's stick to paper-trading this one unless we get the opportunity to buy on a further pullback to the green line (171.96) -- i.e., the 'ideal' mechanical set-up.

When the week ended, the Dow was racing toward a 27251 target I posted here two weeks ago. The blue chip average was trading for around 25,300 at the time, and I would not have expected it to be closing on my number so soon. However, we're getting more accustomed to this kind of price action with each Hidden Pivot target achieved. This one lies nearly 5% above Friday's close, meaning that even after the steep run-up of the last few weeks, there could still be an excellent opportunity for traders to make money on the long side before buyers get winded.  If you're one of them, I'd suggest staying close to the chat room to stay apprised when it matters.

Just when a rally to a middling Hidden Pivot target had begun to look all but certain, the futures vexatiously fail to deliver. They'll have another chance on Friday, but we should be open to the possibility of a multi-day decline that puts the target at least temporarily out of reach.  Regardless, and unless the broad averages sell off hard for a week, we still have two Hidden Pivot objectives in play:  2824.00, or 2848.25 if any higher. I've included a long-term chart (click on inset) that shows a third, well-defined target at 2868.50. The chart is a blended composite, so the target should not be expected to work precisely. However, it is close enough to the 2848.25 target given above to imply there's considerable stopping power somewhere in-between.  Meanwhile, I'm as curious as you are to see how stocks behave ahead of the weekend, so let's simply enjoy the show and try to glean what we can from it. ________ UPDATE (Jan 21, 5:03 p.m. EST): Friday's moderate rally did not change my outlook or the analysis given above.  _______ UPDATE (Jan 22, 8:23 p.m.):  Still no change.  The rally is too steep at this point to catch a ride, unless perhaps by way of a 'camouflage' set-up that would require your diligent attention to the 5-minute (or less) chart.

I put out a bitcoin trade in the chat room Thursday night that has since produce a substantial theoretical profit, but I want to emphasize that all of my bitcoin recommendations are intended for the time being as paper-trades. We can segue to real-money plays when two conditions have been met: 1) subscribers have become thoroughly accustomed to the 'mechanical' entry tactic used to get aboard; and 2) the markets in various bitcoin trading vehicles have become tighter and more liquid. (Note: Although the symbol $BRTI itself is not tradable, it accurately reflects bitcoin's up-to-the-second price, displaying as it does the best bid/offer reported by participating exchanges.) A Risk Worth Taking The recent trade is shown in the chart, although the original entry price and stop-loss were changed when $BRTI created a second, higher, point B. Entry and exit points are shown and assume four contracts bought, then two exited on the initial rally to the midpoint pivot at 11717.  The trade is therefore still 'live' in theory, with an order to exit a single contract at D=12733, o-c-o with a 10700 stop-loss for the two contracts that remain. If 12733 is hit first, the final contract should be held for a swing at the fences, since my big-picture target is 23,247.  The x-to-p 'mechanical trade,' where we attempt to catch a ride merely to p rather than to the pattern's D target, begins with a seemingly unappealing 1:1 risk reward. However, when used in conjunction with a strong impulse leg, the trade has been working so consistently that we can afford to "go out on a limb." In this case, notice that the trade worked even though the set-up began with a weak impulse leg -- i.e., one with a finishing stroke that did not exceed any prior 'external'