Rick Ackerman

[Editor's note: The following was sent out to clients in mid-July by my friend Doug Behnfield, a financial advisor and senior vice president at Morgan Stanley Wealth Management in Boulder, CO.  Long-time followers of Rick's Picks will be familiar with Doug's work, since his thoughts have appeared here many times. I have always referred to him not only as the smartest investor I know, but one of the smartest guys. He still is. I am grateful to him for allowing me to share his insights with you. However, I must I must apologize for some formatting changes that were necessary due to typographical limitations on my end. Doug's original letter was meticulously footnoted, and some text that was bullet-pointed I have rendered in paragraph form. Otherwise, the content is unchanged. RA] In all 44 years as a Financial Advisor (aka Account Executive, stockbroker), I have never been aware of any respected stock market pundit that “called the top” in close proximity to the actual beginning of a true Bear Market. However, an associate once gave me a report late in 1987 that had been issued in July, 1987 written by Justin Mamis entitled The Philosophy of Tops. He wrote it just three months before the Crash of October 1987. It has been in my permanent file for decades and I dragged it out a few months ago to remind me how utterly difficult it is to know how high is too high (or how low is too low) in the stock market. After all this experience in the business, I wish I knew, or that I knew someone who knew, on a timely basis. But, alas, it has been too much to ask. That doesn’t mean that I haven’t accumulated a meaningful amount of market wisdom over the years. As

[Editor's note: The following was sent out to clients in mid-July by my friend Doug Behnfield, a financial advisor and senior vice president at Morgan Stanley Wealth Management in Boulder, CO.  Long-time followers of Rick's Picks will be familiar with Doug's work, since his thoughts have appeared here many times. I have always referred to him as not only the smartest investor I know, but one of the smartest guys. He still is, and I am grateful to him for allowing me to share his insights with you. However, I must I must apologize for some formatting changes that were necessary due to typographical limitations on my end. Doug's original letter was meticulously footnoted, and some text that was bullet-pointed I have rendered in paragraph form. Otherwise, the content is unchanged. RA] In all 44 years as a Financial Advisor (aka Account Executive, stockbroker), I have never been aware of any respected stock market pundit that “called the top” in close proximity to the actual beginning of a true Bear Market. However, an associate once gave me a report late in 1987 that had been issued in July, 1987 written by Justin Mamis entitled The Philosophy of Tops. He wrote it just three months before the Crash of October 1987. It has been in my permanent file for decades and I dragged it out a few months ago to remind me how utterly difficult it is to know how high is too high (or how low is too low) in the stock market. After all this experience in the business, I wish I knew, or that I knew someone who knew, on a timely basis. But, alas, it has been too much to ask. That doesn’t mean that I haven’t accumulated a meaningful amount of market wisdom over the years.

Bears had two feel-good days in a row -- about is good as it ever gets for them anymore --  before impaling themselves with a short squeeze to end the week. They shouldn't get too discouraged, though, since the market feels like it is in a topping process that needs only to inflict a little more pain on them before a bear market can begin in earnest. The only thing holding stocks aloft, apparently, is a solid consensus among some of the world's best chartists that the end is near. A couple more swoons and new all-time highs and it'll all be over. It is inevitable that the first monster-leg down will occur with 'don't pass' bettors aboard to enjoy it.  For our part, we try to keep a few butterfly put spreads in inventory at all times, just for bragging rights if we should finally nail the Mother of All Tops after 12 years of failed attempts. Speaking of which, 4461.00 (or so) looks like an interesting place to try once more, since no one else is likely to be joining us in a place so bereft of trendlines, Fibonacci levels, McClellan oscillators or Andrews pitchforks. Stay tuned to the chat room if you want to stay apprised in real time. _______ UPDATE (Aug 23, 10:20 p.m. ET): Although I usually avoid drawing two patterns on the same chart because it can be confusing, this pair looks clear enough to illuminate the way. The stab today through p=4474.00 of the smaller pattern implies that the futures are all but certain to reach p2=4537.00, and if they close above p for a second straight day, almost as likely to reach D=4600.25.  Notice that p2 closely coincides with the 4545.00 'D' target of the larger pattern. This implies double stopping power

Gold's rally flattened dismally last week, but it was never going to get very far to begin with. A glance at the chart shows the relentless weight of the downtrend, punctuated the entire way by pyrite rallies. This one would become an enticing short via an rABC set-up if it gets to around 1885.00. That's right in the 'discomfort' groove, although we shouldn't get our hopes too high that it will be reached. If the futures instead roll down this week after failing to surpass last weeks high at 1797.60, look to go long against the trend near 1718.60 with as tight a stop-loss as you can abide. _______ UPDATE (Aug 23, 11:02 p.m.): The new 'C' high at (so far) 1809.10 has raised our bottom-fishing bid to 1730.10. It will likely change, so here's a chart to allow you to adjust it on-the-fly. If the futures rally above July's peaks, you can cancel the bid at the red line.

When Silver reversed two weeks ago after having breached two key lows from Q4 2020,  we should have expected the bounce to be a doozy, since many bulls would have been stopped out near the bottom. Instead, we got a rally that has died after just a week, and now a downtrend that looks likely to test the old low.  We should know soon whether it will reach the 20.16 target of this lesser pattern, but in any event, there are likely to be several enticing opportunities to bottom-fish on the way down: at 22.06, 21.72 and of course 20.16.  All three of the Hidden Pivots can be used with a limit bid and a super-tight stop-loss, but an rABC set-up would be best. ______ UPDATE (Aug 23, 11:06 p.m.): If Silver takes out the point 'C" high of the pattern shown, that would negate our bottom-fishing strategy. ______ UPDATE (Aug 24, 6:10 p.m.):  Ha-ha, how cute. The futures stuck their grubby little snout two pennies above 'C', then barely retreated. I won't comment on what this might mean because I don't exactly know, but it seems a tad bullish, no?

[Editor's note: The following was sent out to clients in mid-July by my friend Doug Behnfield, a financial advisor and senior vice president at Morgan Stanley Wealth Management in Boulder, CO.  Long-time followers of Rick's Picks will be familiar with Doug's work, since his thoughts have appeared here many times. I have always referred to him not only as the smartest investor I know, but one of the smartest guys. He still is. I am grateful to him for allowing me to share his insights with you. However, I must I must apologize for some formatting changes that were necessary due to typographical limitations on my end. Doug's original letter was meticulously footnoted, and some text that was bullet-pointed I have rendered in paragraph form. Otherwise, the content is unchanged. RA] In all 44 years as a Financial Advisor (aka Account Executive, stockbroker), I have never been aware of any respected stock market pundit that “called the top” in close proximity to the actual beginning of a true Bear Market. However, an associate once gave me a report late in 1987 that had been issued in July, 1987 written by Justin Mamis entitled The Philosophy of Tops. He wrote it just three months before the Crash of October 1987. It has been in my permanent file for decades and I dragged it out a few months ago to remind me how utterly difficult it is to know how high is too high (or how low is too low) in the stock market. After all this experience in the business, I wish I knew, or that I knew someone who knew, on a timely basis. But, alas, it has been too much to ask. That doesn’t mean that I haven’t accumulated a meaningful amount of market wisdom over the years. As

Although there should never have been any doubt bitcoin would make new record highs after shaking out weak hands with a plunge below 30,000, the speed with which it has recovered, eating through thick layers of supply offered up by doubters and losers in thankful retreat, has been breathtaking.  The pattern shown yields a minimum objective of 53,228 and should work nicely for 'mechanical' entries if there's a violent swoon. In any event, we'll monitor price action at the target closely, since an easy push past it on the first attempt would all but guarantee a test of the old high at 64,858.  There is just one place between here and there where we might attempt to get short, but I won't risk queering its magic with an ostentatious drumroll on the home page.  Here's a futures chart, basis the CME September Bitcoin contract, that looks promising for purposes of setting up mechanical entries. A pullback to the green line following two or three more sideways bars would scream 'Buy me!' _______ UPDATE (Aug 26, 10:37 a.m.): Today's nasty swoon missed the green line by a millimeter, but I will suggest canceling the trade. My gut feeling is that the mechanical set-up noted above will still work if Bertie relapses and actually touches 'x', but that it will visit excessive pain on bottom-fishers before BRTI turns around.  Here's the picture.

There is increasing confusion in America about how to handle the rapid spread of Covid’s delta variant. The stock market can usually tell us how much fear is out there, but this time Wall Street seems, if not quite clueless, then certainly heedless. The broad averages have moved steadily higher in recent weeks, caused more by nervous short-covering than by any particular bullishness. There have been no dramatic surges, only a steady, ratcheting ascent that suggests an army of bears have been hard at it, trying to get short at a major top. The irony is that if they would just relax, bull-mania would end overnight, since the rally is drawing its punching power more from buyers driven by desperation than from any other source. With or without them, though, a very important peak is not likely far off. Delta-lockdown worries are bearing down on markets and nearing the red zone as state governors respond with increasingly onerous restrictions on 140 million Americans who have not yet been vaccinated. One-Upping DeBlasio Here in Florida, there are signs that serious trouble could be brewing in the nation’s school systems. In Palm Beach County last week, more than 400 students were quarantined just two days into the school year. Although most of them have not tested positive for Covid, contact tracing has put their school year in limbo. Unfortunately, such turmoil could prove to be a mere squall in comparison to the gathering firestorm in big coastal cities. In New York City, for one, DeBlasio announced last week that the un-vaccinated would be barred from indoor dining, gyms, bars and other places. Not to be outdone, California’s true-blue mayors have already one-upped him with edicts that go even further to restrict movement and commerce. As of Friday, Los Angeles reportedly was considering

Last week's finishing stroke was a fractal clone of schizoid price action traced out over the previous two weeks.  Both exuded the stink of nervous sweat that is symptomatic of unrelieved short-covering. We would surely know, having gotten short ourselves via an rABC pattern that took almost five hours to produce a measly $600 profit. Our hard work was taken as evidence that still higher prices lay in store, as indeed they did. But how long can it go on?  My strong gut feeling is that DaBoyz are getting ready to pull the plug, and soon, after they've extracted the last ounce of buying power from wrong-way bettors. I give this fool's rally another 4-7 days to run , if that long, and would therefore suggest laying in a small inventory of put butterfly spreads well below the market and 6-8 weeks out. You can do this using SPY, keying on strikes at 410 or below. For a more precise handle on immediate prospects, here's your SPY road map (see inset). The stall at p=445.52 could potentially be fatal, but we'll wait for the rally to fail, if it does, before we pass judgment. In the E-Mini S&Ps, a comparable resistance lies at p=4461.25, which also has produced a so-far precise stall. Its associative 'D' target is 4557.50, and any move decisively past p would put this target in play. SPY's 'D' target is 455.05. ______ UPDATE (Aug 16, 4:40 p.m.): Biden's egregious mishandling of our withdrawal from Afghanistan is an appalling preview of how so much else that concerns the nation is about to spin wildly out of control. And yet, the stock market barely flinched and actually closed higher! Rather than go on about how the bull market is under the spell of epic, psychotic delusion, I'll stick