Rick Ackerman

The melt-up story is getting increasing play -- and who's to deny it? Even bulls seem to find it a little scary, though, since, after the melt-up, what then? I don't know which prognosticator in the guru fever swamp is hyping the highest target for the Dow Industrials, but I'm on record below with my own at 25680.  (I could stretch that to 26,940 in a pinch, incidentally, but I don't want to play my hole card just yet.)  The 25680 target is a Hidden Pivot that lies exactly 2352  points above Friday's close. Even though there must be much higher guesses than that, mine will at least keep me in the game for the next year or so. I'm hoping we're all wrong, since it will be very difficult to suspend disbelief as the broad averages climb to insane heights while the real economy remains, paradoxically, all too sane.

AMZN is nearing escape velocity from what had begun to look like a bearish head-and-shoulders pattern going back to mid-April. The stock tripped a theoretical 'buy' signal last week when it touched the green line (click on inset) and is now no worse than an even-odds bet to reach the red one, a midpoint Hidden Pivot at 1057.80 that's tied to a target at 1182.70 nearly a hundred points above the old record high. We'll use 1057.80 as our minimum upside projection for now, implying the broad averages will be moving higher in sympathy with the shares of the world's largest retailer. _________ UPDATE (Oct 22, 6:30 p.m.): The stock looked like hell last week, but DaBoyz didn't need it as they drove just about everything else skyward in a take-no-prisoners short squeeze. AMZN ended the week with an about-to-fail 'counterintuitive' buy signal, suggesting it wants to roll over. If so, a print to the downside exceeding 980.10 would energize sellers._______ UPDATE (Oct 23, 5:18 p.m.): The stock dove as anticipated (see above), somewhat exceeding a 963.36 correction target on the hourly chart (a=1010.90 on 10/18). We'll remain on the sidelines for now, until DaBoyz have manipulated the stock low enough to go bargain hunting again. The head-and-shoulders pattern that had attracted so much interest has been stretched way out-of-shape and must now be regarded as an intermediate-term consolidation.

A short-lived rally from a midpoint support at 1281.30 (click on inset) came crashing back to down to the pivot on Friday. Although this Hidden Pivot has yet to be breached decisively, the burden of proof will be on bulls as the new week begins. Specifically, they will to push this brick above 1317.10 in the days ahead to show that they are serious.  Failing that, we should expect the decline to continue  down to 1254.10, a target broached here earlier.  This is frustrating price action, to be sure, but it's encouraging that bullion hasn't completely broken down at a time when institutional firepower has been trained almost entirely on the stock market.

The chart shown is a composite, over many years, of different contract months, so we shouldn't rely too heavily on the 6109 target to show precise stopping power.  However, it should work well enough to give us a good read on trend strength. Specifically, if the futures close for two consecutive MONTHS (not days, as originally written) above 6109, or trade more than a HUNDRED points (not fifteen, as originally stated) points above it intraday, I'd suggesting using a new target  at 6629.50 as a minimum upside objective. It is calculated by sliding the point 'A' low down to the next distinctive low, which I've labeled A2.

For eight-and-a-half years, all-but-insatiable buyers have munched through Hidden Pivot targets major and minor, trashing along the way every historically compelling theoretical obstacle that technical analysts could strew in their path. Most recently, NYSE stocks came within a hair last week of triggering Peter Eliades' 'Sign of the Bear,' an  indicator with a perfect, seven-for-seven track record forecasting major tops. Instead, bulls rallied so strongly to end the week that, for all we know, the rarely flashed Sign of the Bear has been put in a coma for years to come. With the foregoing in mind, today's E-Mini S&P chart posits a very major target 2868.50 that leaves plenty of room for the bull market to continue rampaging its way to a fitting and proper end. If the target is reached, the Dow Industrial, which settled on Friday at 23,328, would be trading more than 2300 points higher, at around 25,680.  Keep in mind that a nasty selloff to 2335.50 (the red line in the chart) would generate a 'mechanical' BUY signal, as would an even nastier fall to 2069.00 (shown in the chart as a green line).  Permabears be warned: If you are waiting for the stock market to fall apart, you may have a long wait.

The broad averages swooned on Thursday after coming within inches of some important Hidden Pivot rally targets subscribers have been using for a while. Buyers looked poised at the close to ram these impediments into oblivion come Friday, but I won't be ready to throw in the towel until I've seen another day or two of price action. As I've noted elsewhere on this page, a head-fake from these levels would be Mr. Market as his diabolical best, since the hook, a breakout to new all-time highs after Thursday's v-shaped reversal, would turn virtually everyone bullish, most particularly bears scrambling to get shorts back.  Incidentally, the day's ups and downs left a famous indicator used by my colleague Peter Eliades in limbo. His 'Sign of the Bear', which is seven for seven calling major tops, was just a hair from triggering on Thursday. We should know by no later than Monday whether it has flashed red. In the meantime, you can click here for a detailed explanation of this indicator. It originally appeared as a column I wrote for the San Francisco Examiner just before the Dot-com Crash. _______ UPDATE (Oct 29, 11:04 p.m.): A short-covering rally late Thursday night to new-record highs will likely have have neutralized 'The Sign of the Bear' by the time you read this.  My new, near-term targets for the E-Mini S&Ps (see below) go as high as 2619.75.

The chart shown in the inset implies that Dot-Com Mania II could have a ways to go before the bubble pops. There are no guarantees that the 6185.00 target will stop the tech-heavy index in its tracks, but it can serve for now as a minimum upside objective. Today's selloff did no technical damage to the daily chart, and even the hourly barely got ruffled. If sellers get second wind to end the week, though, and the Mini-Naz falls beneath October 6's low at 6037.50, that would be cause for mild concern. Otherwise, expect to see it bounding higher shortly, driven by AMZN, AAPL, GOOG and PCLN, all of which have taken an unsurprising breather lately.

During these weekly sessions, we're always looking for real trades in real time. That's because, for teaching purposes, walking the walk will always be superior to talking the talk. Check out the trade in NFLX at the end of the recording if you want to see how very easy it can be to set up a profitable trade with little stress or strain. This happened on a day when the broad averages and most stocks were barely moving; it is a trade that any subscriber with just a passing familiarity with the Hidden Pivot Method could have done. The trade was based on a simple rule that we came up with to tame and exploit the most diabolical critter of them all, the E-Mini S&Ps.

DIA and the E-Mini S&Ps both topped on Wednesday just millimeters from important-looking rally targets that subscribers have used in recent weeks to remain comfortably on the right side of the trend. Although we never expect to nail the elusive Mother of All Tops with these targets, it is quite common for them to repel buyers, at least for a day or two. If, as we might expect, the broad averages simply blow past them on Thursday, it would indicate that bulls have much loftier goals in mind. In any event, we'll shun speculation and simply watch to see how much resistance the two Hidden Pivots offer as Friday approaches.