Rick Ackerman

The Indoos surged on Friday to within a millimeter of a 22907 rally target we've been using for more than a month. Although it kept us confidently on the right side of the trend, there are no guarantees that this middling Hidden Pivot resistance will stop a relentless bull market whose trajectory continues to steepen.  If you took a short position at the target as I'd suggested, perhaps using DIA puts, I would suggest tying them to a tight stop-loss. Check the chat room before Monday's opening for real-time guidance, since it may be possible to refine our strategy based on what index futures have done overnight. A slightly weak opening would indicate that DaBoyz are eager to buy 'em before they run stocks up shorts' old wazoo.  A somewhat higher opening could indicate a bull trap, and that would be the scenario best suited to holding onto your puts, even if only for an hour or two, until the mood of the day has become clearer.  If, as seems likely, shares continue to move blithely higher, you should use the 23,226 target shown in the chart (see inset) as a bull-market price objective.  It is quit compelling, especially because of the very precise stall at p=22413.  The breakaway bar on Oct 2, when DJIA launched above the pivot, implies there is a very good chance the blue chip average will in fact get to 23226. _______ UPDATE (Oct 19, 5:07 p.m. EDT): Close but no cigar. The Indoos have gotten as high as 23173 this week, 53 points shy of the target. It remains valid in any event and still looks likely to produce a tradable pullback. Click here for an up-to-the-hour chart.

Friday could be challenging, since Her Nibs, Fed obfuscator-in-chief Janet Yellen, will be giving a speech on Sunday morning.  According to a press release, she "will join People's Bank of China Governor Zhou Xiaochuan, Bank of Japan Governor Haruhiko Kuroda, and European Central Bank Vice-President Vitor Constancio to speak on 'The Global Economy: Prospects for Broad-Based Growth' at the 32nd Annual G30 International Banking Seminar in Washington, with audience Q&A."  Nothing Yellen says, even a standard-issue rubber-chicken speech, is ever treated as a non-event, so don't be surprised if stocks are preternaturally subdued on Friday in anticipation of this momentous event. We might even look for some nutty histrionics just ahead of the closing bell as traders place their bets.

Today's bullish surge was strongly impulsive on the hourly chart (see inset), surpassing no fewer than four prior peaks, three of them 'external'. From a technical standpoint it transformed a bearish head-and-shoulders formation that has been taking shape since May into something else -- presumably a consolidation pattern with enough energy to push the stock above the all-time high at 1083.31 recorded in late July. We shall soon see. Of course, if the bull market in AMZN is about to get second wind, it holds bullish implications for the stock market as a whole, since the company is the most important retailer in the world.  Concerning AMZN's chart, from a trading perspective the rally from the September low at 931.75 was as appealing a 'counterintuitive' set-up as we could have imagined, since the low was just inches from June's watershed bottom at 927.00.

The Dow Industrials edged past a rally target on Wednesday that we had expected to offer more resistance.  It is a longstanding tradition for Ricks Picks subscribers to get short at Hidden Pivot resistance points as compelling as this one. However, in the end, over the duration of a bull market that has been chugging along for eight-and-a-half years ago, we've had to content ourselves with small losses, or sometimes small gains when the price reversals we'd expected actually occurred. The markets are tradable these days only by the very nimblest of scalpers, but for others who are simply on board, it is an act of faith.  The 'melt-up' scenario -- Dow 50,000, anyone? -- has been getting a lot of play in the blogosphere lately. For the record, we're not buying it.

Volatility readings continue to plumb historical new depths with each passing day.  How low can they go? My current tout for VXX, a trading vehicle that tracks short-term S&P 500 volatility, suggests that the trend cannot continue indefinitely and that, moreover, it's possible to get pretty good odds betting against it at certain times. Even if that is not presently the case, complacency as measured by VXX and VIX has never been higher, and that in itself is a dangerous sign.

The Indoos are closing fast on a 22907 target (see inset) we've been using for the last couple of weeks to stay comfortably on the right side of a very steep uptrend. Some subscribers already hold a small short position in DIA that enjoyed a felicitous pullback this morning from within a penny of a 248.44 Hidden Pivot resistance. It is the same pattern that produced the 22907 target for this vehicle, and that's why I'll suggest using the target to re-short DIA (by buying puts), or to take a fresh short position in it, if the opportunity should present itself.

I am tracking a single-contact position with a cost basis that has been reduced by profit-taking to 1204.80. At a current price of 1293.10, that would imply a theoretical gain so far of nearly $9000. As is my custom, I track positions only when subscribers have reported initiating trades with actual money, based on explicit recommendations I have made, or on precise reversal targets that I've calculated using the Hidden Pivot Method. We are swinging for the fences with one contract that remains from an original four, all purchased when December Gold bottomed on Friday exactly at a correction target sent out the night before. The implied big-picture rally target is 1414.10, meaning we could conceivably rack up another $11,000 in gains before the bull cycle begun in July has run its course. In any event, I'll recommend using the 60-minute chart to fashion an 'impulsive' stop-loss like the one shown (see inset). That means you should exit what's left of the position if a downtrend exceeds two prior lows on the hourly chart without an upward correction after the first low has been breached.  The lower of those lows lies at 1277.70. ______ UPDATE (Oct 11, 4:26 p.m.): We continue to hold a single-contract tracking position with a cost basis of 1204.80.  The futures are bound most immediately for the 1298.80 target shown, but if buyers are serious they should be able to make short work of it.  That would indicate still higher prices are likely. For Thursday, stick with the 1277.60 stop-loss implied above. _______ UPDATE (Oct 12, 9:25 p.m.): The futures bettered my 1298.80 target by $1 and now look bound for 1304.80, based on the pattern shown.  A decisive move through p=1298.30 would all but clinch it. Raise the stop-loss to 1281.70 for now.

Some key trading vehicles, including AMZN, AAPL and NFLX, have stalled, although there is little reason to think bulls won't overcome their timidity in the days ahead. Regardless, a crucial rally target looms in the E-Mini S&Ps, and I doubt it's going to be a pushover like so many other Hidden Pivot resistances before it. We'll soon find out, but I've advised a tightly stopped short there in any event.

The dollar has risen moderately in the last month, but the rally so far has fallen well short of the threshold needed to put the 115.92 target shown (see inset) in play. That would require a print at the green line (97.24), which lies about 5% above current levels.  Even that wouldn't suffice to generate a bullish impulse leg on the weekly chart, however. That hasn't occurred in nearly a year, and it would require a thrust exceeding the 97.87 'external' peak that I've labeled. My long-term outlook for the Dollar Index is quite bullish and calls for an eventual test of a peak near 121 made more than 15 years ago.  As things stand, though, we can set a snooze alarm to ring if 97.87 is surpassed, since anything short of that will be just noise.