Rick Ackerman

Today's chart shows a broadening top formation that has potentially ominous implications for the aging bull market. This particular pattern is described in the classical Edwards & Magee work on technical analysis, and its track record for predicting important tops is impressive. My own technical work, using Hidden Pivots, nailed the so-far all-time high at 2488.50 recorded three weeks ago within a single point, but it was inconclusive as to whether that peak would prove to be the elusive Mother of All Tops.  The Edwards & Magee pattern cannot predict this with certainty either, but it can surely open our eyes, especially when seen in conjunction with my own work, to the growing possibility that the stock market has already made a very important top. It's always possible that last week's bounce will continue, producing yet another record high. But if that high should be followed by a lower low, the effect would be to shift the Edwards & Magee broadening top formation onto a chart of larger degree, increasing its possible significance. _______ UPDATE (Aug 28, 6:40 p.m.): The futures have been down as much as 20 points this evening following news that North Korea had lobbed a missile over Japan. This has put into play the 2401.55 target shown. It can serve for now as a minimum downside projection.

Last week, I published a copper chart here that could be used to justify a very bullish outlook for the stock market -- for a move to as high, even, as Dow 30,000. However, my latest E-Mini S&P tout raises the possibility that stocks have already begun what could turn out to be the worst bear market in history. Lest I be accused of schizophrenia and find myself reviled by lurkers who judge the quality of my work by the headlines atop the free forecasts they receive from me, let me say that I have never pretended to own a crystal ball. In fact, and as we all know, no one, not even the wisest guru on the planet, knows for sure whether the bull market will continue for another five years, or ten years, or in fact ended with the August 7 high. My gut feeling is that if stocks have not already topped, they are about to -- in a big way. Even so, I will continue to pay close attention to technical signs, especially on the lesser charts; for it is there that a bear market would first become apparent. Indeed, every bear market in history has begun with a downtrending abcd pattern on the one-minute bar chart. I am watching for this now, since August's weakness has proceeded from a high that precisely matched an important rally target I'd flagged for subscribers. But I am also watching AAPL closely, since it is a key market bellwether that appears to have $8 of upside before it reaches a major Hidden Pivot target at 168.46. That target will have been more than four years in coming if it is achieved, and it looks to me like a great place to get short. I am encouraged to think my

No chart troubles me more than Copper's, since it implies so clearly that the global economy is doing fine and will continue to expand, even if only moderately, for the foreseeable future. That's the kind of bilge we expect to read on the front page of the Wall Street Journal, the most enthusiastic cheerleader for the charlatans and economic dolts who run the Federal Reserve. And yet, it's hard to argue with the bullish look of this chart, or with copper's known prescience in predicting economic strength, particularly in the manufacturing sector. Under the circumstances, I can offer only a forecast of clear sailing to at least 3.6328, a midpoint Hidden Pivot associated with a bull-market target at 5.3300 (!)  If copper prices are indeed on their way to such heights, then forecasts that the Dow will ultimately hit 30,000 are not so farfetched as we permabears might wish t0 imagine.

Has Wall Street already left for the Hamptons?  Although there are still six trading days remaining until Labor Day, the markets seem to have gone comatose earlier than usual this year.  Typically they wait until the Tuesday or Wednesday preceding the holiday before flatlining. This time, though, with no particularly interesting themes developing in the news, DaBoyz seem to have temporarily abandoned their favorite pastime: providing daily hot-air-balloon rides for anyone who shows up.  My gut feeling is that "nothing" will happen between now and Monday, September 4.  A pregnant pause, perhaps? Whatever the case, it is difficult to imagine that the broad averages will continue to chill when traders return in earnest to their desks.

Subtle signs of weakness have been creeping into the intraday charts. On Wednesday, the Dow turned lower after failing to reach an 'easy' midpoint Hidden Pivot resistance. Even so, I am very much focused on the bullish look of AAPL's charts. The stock is an important market bellwether with a long-term rally target at 168.33 that lies $9 above current levels.  AAPL showed excellent relative strength on Wednesday, implying sellers could have difficulty pulling it, and therefore the broad averages, down until such time as it has topped at 168.33.

I'd banished this vehicle from the sheets because it so delights in screwing with traders' heads. However, because DaBoyz have reverse-split it 4:1, the new chart can be 'worked' to produce a serviceable bear market target that looks more likely to be achieved than the one we'd been using at 10.24.  Ordinarily, we'd use a 40.96 target equal to four times the old one. However, the pattern shown yields a less ambitious downside projection because I've used a different point 'A' high that is only slightly above 'C'.  The result is a 43.28 bear market target that offers an enticing place to bottom-fish, since a print there would be read as a breakdown by other traders.  And so it would be, but with a chance of turning around precisely at the 43.28 Hidden Pivot support. As always, we will do nothing in this vehicle unless at a crystal-clear, targeted support. _______ UPDATE (Sep 5, 10:58 p.m.): I'm tempted to remove VXX from the home page because it has become a distraction, sort of like a guy with severe Tourette's shouting his way down a pedestrian thoroughfare. But since we've resolved to buy the obstreperous little sonoabitch only when it falls to a Hidden Pivot target, there's no harm in leaving the tout to ripen indefinitely, and so I shall._______ UPDATE (Sep 15, 12:18 a.m.) Based on a trade I put out on the chat room Wednesday withVXX trading around 43.28, I've established a tracking position consisting of four Sep 29 50 calls @ 0.65.  For now, offer two of them (or half your position) to close @ 1.30, good till canceled.

The futures topped to-the-tick at the 2454.75 midpoint Hidden Pivot shown. Earlier, I'd told subscribers who were long from the 2415.75 low recorded the previous day to exit the position, thereby sparing them the anxiety of watching this vehicle fall today. Now, there is nothing to guarantee that the September contract will push above p;  but if and when it does, especially if the breakout is decisive, more upside to D=2494.00 will become an odds-on bet. You can short there aggressively, but only if you've been long for at least a part of the implied rally. I can't recall a time when the futures were as easily or as precisely predictable as they have been lately, so we should work diligently to make hay while the sun shines.

In the aftermath of Monday's solar eclipse and the recent flashing of yet another Hindenburg Omen, perhaps traders should be braced for Armageddon?  Alas, the stock market has a way of thwarting preparedness by boring to death those who would attempt to get ready. And if millions of traders are indeed ready for the worst at this moment, you can bet that Mr. Market will be on his best behavior.  I'd just about given up on a 10.24 target for VXX, which, if reached, would imply that already brain-dead volatility is about to sink even lower. Perhaps it's time to dust off this target?  (Note: DaBoyz have reverse-split VXX at 4:1.  The new target is 40.96.)

Subscribers who followed my simple instruction -- bid 2416.00 with a five-tick stop-loss -- were able to cash out of a $2300 winner on Tuesday, a day after initiating the trade.  The futures came though for us, bouncing 39 points after touching 2414.75, the Hidden Pivot correction target I'd flagged when I put out the trade. Although I'd originally suggested swinging for the fences with the 25% of the position that remained, I opted for a three-bagger instead, since I am not entirely confident that the current rally is immediately bound for new record highs.  Incidentally, some subscribers who bought at the exact low would have been reversing short positions entered on August 8, when the futures topped after hitting an all-time high just 1.00 point from a 2488.50 target I'd flagged earlier. It would appear that the swing highs and lows of this vehicle have been precisely predictable lately, even if the ever-elusive Mother of All Tops has not.