Rick Ackerman

The bull market's blowoff-like trajectory has steepened, if such a thing were imaginable, with Wednesday's 322-point rally in the Dow. The blue chip average is ostensibly headed to the 27,251 target shown, and although this Hidden Pivot resistance is worth shorting, I wouldn't recommend standing in the herd's way if it is exceeded by more than 10-15 points. The broad averages reportedly are about to set a record for consecutive days of upwardliness without correcting 5% or more. Statistics aside, it sure feels like it.  The opportunity for buyers to take a breather may be approaching with the nearness of the target flagged above, but we shouldn't be shocked if it fails to contain their energy. At that point, Dow 30,000 would become all but a foregone conclusion. However, we should keep in mind that, even as the Indoos appear to steam toward a fated rendezvous with an irresistibly round number, 'foregone conclusions' are the stuff of bull traps.

Bears just couldn't finish the job Tuesday. They had shares on the run in the early going, but by day's end the Dow settled a measly ten points lower. Buying the dips, it would seem, is more popular than craft beer and chicken wings these days -- so much so that one could almost wonder whether we will ever see the Dow trade lower on three consecutive days.  Well, yes, of course we will -- just not any time soon if some of the bellwether stocks tracked below are going to achieve their targets.  Way off-topic today is this link -- to Aydar Ganullin, an accordionist virtuoso who plays the instrument like no one I've ever heard before, and Piazzolla's gorgeous tango music with unique brio and beauty.

Buyers did something on Tuesday that we don't see very often these days, pausing for a few hours in their manic scramble to own every share they can get their hands on. Bears, with the wind at their backs for a rare change, failed for the umpteenth time to seize the advantage. When the dust settled, the futures had closed off a whopping nine points after being down as much as 20 points intraday. Oh well. Since a second day of accelerating weakness seems most unlikely, we'll stick with the 2824.00 rally target given here earlier -- or 2848.25 if any higher. Buyers can use a 'mechanical' set-up to generate a bid near the red line (p=2725.25), but I'd suggest using 'camouflage' on the one- or three-minute chart to do the actual trade, since the entry risk otherwise would be $2016 theoretical per contract.  Stay close to the chat room if you seek guidance for this in real time.  If the stock market startles by going lower we can sit back and enjoy the show, since many subscribers still hold soon-to-expire VXX calls purchased a couple of weeks ago for an average o.67. If the broad averages sell off as hard as they did for a while on Tuesday, those calls could triple in value in an hour. ______ UPDATE (Jan 17, 4:22 p.m.): No change. At the rate stocks are climbing, the E-Mini S&Ps should reach the 2824.00 target by no later than early Friday. It would equate to a 500-point rally in the Dow.  Of course, none of us will be the least bit surprised when the target is reached, but what might surprise some observers is how quickly this will have occurred. Please note that once 2824.00 has been exceeded by more than 1.50 points, the 2848.25

It must have been frustrating for buyers to have to cool their jets for an extra 24 hours this weekend. The Martin Luther King Holiday denied them a full day's opportunity to push the Dow higher by the usual 100 or more points. As a result, we could see see pent-up demand come charging back into the stock market over the next couple of days. But be prepared to see bulls feign a lack of interest in the first hour or two, since this would help shake loose some shares from widows, pensioners and other weak hands before DaBoyz goose the broad averages into their accustomed parabola.

Gold is now strong bet to reach the 1389.60 Hidden Pivot that has served as our lodestone in recent weeks. However, notice how the February contract lingered for a while near the 1314.00 midpoint pivot before taking flight last week. This suggests the move to the target is more likely to be in fits and starts, taking perhaps two or three weeks or longer, rather than occurring with a few heroic leaps such as we've become used to in some of the nuttier stocks. Gold has been decidedly un-nutty in scaling the heights, almost as if those who manipulate precious metals quotes for a living have acceded to the bull only begrudgingly.  No matter. We'll continue to be patient and to take the measure of buyers at each significant rally target. As always, if they can easily push above a Hidden Pivot resistance as clear and compelling as the one at 1389.60, they'll be telling us there is unspent buying power to push prices even higher.

The 91.57 downside target we were using for the dollar looked promising as a place for a powerful bounce to occur. Instead, sellers crushed it on Friday, putting in play a significantly lower target at 88.29 that I would rate as almost certain to be reached. If so, it would add 2.9% to the Dollar Index's so far 12.4% decline from the 103.82 high recorded a year ago. It would also undoubtedly quicken the inflation drumbeat we've been hearing recently from the usual, benighted  sources -- i.e., the news media, professional economists and talking heads. I expect my new target, a clear and compelling Hidden Pivot support, to resist sellers for a while, at least. But if it gives way relatively quickly -- and by that I mean within a day or two of first being touched -- I would infer that the U.S. dollar is headed significantly lower. At the same time, we could expect to see the continuation of some big trends, including lower prices for Treasury bond and notes, and higher prices for stocks, crude oil, precious metals and of course bitcoin.

Treasury rates and the price of crude oil have broken above key Hidden Pivot resistance points this week, a technical event whose significance is explained in the relevant 'touts' below. Although I have serious doubts that the inflationary spiral economists have been breathlessly predicting for the last 25 years is coming, I'd have to concede that the pace of economic growth in the U.S. and elsewhere seems likely to quicken. In any event, my long-term skepticism toward the 'supply-side' story that has driven energy's advance has given way to a 'demand-side' story that would necessarily include a strong resurgence in China's manufacturing output. Commodities would participate in such a resurgence as well, so look for more technical coverage on this page as the trend progresses.

Crude Oil has broken out with a sharp rally that easily surmounted a daunting-looking Hidden Pivot target at 63.08 (see inset) on the weekly chart. We'd been using a 63.59 target for the December contract to stay comfortably on the right side of the uptrend.  Shifting to the February futures, we see that this week's so-far high at 64.77 surpassed the target by a whopping $1.69. If the rally continues, moving above a zone of resistance between 62 and 69 created early in 2015, it would augur more upside to $75 or even higher in 2018. This could not possibly be due to the mere curtailment of supply by OPEC et al.  What it implies is an upsurge in the global economy that has yet to live up to the by-now constant hubris of the financial press.

The futures appear bound for a minimum 2782.25 (see inset), but if that Hidden Pivot resistance fails to restrain buyers for more than a few hours, look for the rally to continue to the next such target, at least: 2824.00.  Pivoteers familiar with the tactic can use a 'camouflage' set-up to get long on a pullback to the pink line (2738.25). But if you prefer a 'mechanical' entry, bid for one contract there (i.e., at 2738.25), stop 2723.50. _______ UPDATE (Jan 15, 6:16 p.m.): Buyers ripped through the 2782.25 pivot with such force that the rally is almost certain to continue to at least 2824.00. If that Hidden Pivot resistance gives way easily too, use 2848.25 as an alternative. It would be the toughest impediment the futures have encountered in months.