Rick Ackerman

I don't often use volatility as a timing indicator, but we've got a promising Hidden Pivot target in VXX that could conceivably serve that purpose. So far, VXX, an equity-based ETF that that tracks short-term S&P 500 volatility, has done a good job, keeping us properly bullish on stocks as we wait for it to sink to a very compelling bear-market target. Because it moves more or less inversely with the S&Ps, a falling VXX would indicate a continuation of the steady uptrend that has characterized the bull market in recent months. Nothing kills volatility like a month or two of ratcheting upwardliness followed by a month of sideways. That's how things have been going since February, and so it's no surprise that VXX has recently flirted with record lows. We should also tune to AMZN, a key bellwether that cannot but telegraph price action in the broad averages. If AMZN were to be trading around 1083, a potentially very important Hidden Pivot resistance with the potential to cap the bull market, at the same time VXX is banging on its respective downside target, that could be the bell that's not supposed to ring at market tops.

I like the moderately bearish,  2387.75 target as much as any I am able to find on the intraday charts, but that's not saying much, since the dirge of the last five weeks has generated price bars that do not speak with much clarity. Moreover, it wouldn't take much for bulls to negate the slight downtrend's promise: just a small rally on Tuesday exceeding the external peak at 2432.25 that I've labeled would do the trick. Still, I wouldn't give up on the possibility of a refreshing plunge sometime soon, since buyers would still need to rack on an additional 16 points, hitting 2448.00, to put bears back on their heels.  All in all, a very mixed bag. Summer doldrums are here, but let's not be lulled, especially since August in particular has a long history of producing very important tops._______ UPDATE (Jul 11, 7:55 p.m.): Tuesday's gratuitous ups and downs amounted to the technical equivalent of a hacking cough -- i.e., pure annoyance. If there is anything to read into it, we should notice that the short squeeze around mid-morning couldn't even generate an impulse leg on the hourly chart. This is mildly bearish, but probably nothing DaBoyz can't overcome on Wednesday with a little quasi-criminal magic. 

I am featuring the Dow Industrials in today's touts because the rally pattern shown (click on inset) looks so perfectly predictable, or very nearly so. My only concern with respect to the question of whether the Dow will reach a 'D' target at 21763 that lies 350 points above is that the initial move through the 21048 midpoint pivot did not go very far before it needed a correction and a running start to reach the next Hidden Pivot level, a secondary pivot at 21383. I have little doubt that if the Indoos reach the higher number, they will stall there very precisely and pull back in a way that will be tradeable.  However, because of the hesitation following the initial move through p=21048, the ability of the Dow to achieve the target is mildly in doubt. The most bearish thing that could happen next would be for the Indoos to fall in such a way that the two external lows shown, respectively 21197 and 21113, are exceeded to the downside with no intervening upward correction. Alternatively, bulls would hold sway if they can close this vehicle above 21488 for two consecutive days. That is the midpoint pivot of a bullish pattern comprising the last five price bars on the chart. All of this may be making your head spin, but I've sketched it graphically because it's important that you know exactly what's going on, and that you are able to follow price action knowledgeably as things unfold over the course of the week.

Since August, SIL has been  correcting a major bull leg that took it from  14.94 to 54.34 between January and August of 2016. The current phase of the correction began on  February 24, and it should have bottomed at 31.10 a month or so ago. Instead, SIL turned sharply higher from 32.21 -- i.e., from 1.11 above the target -- and has since gone as high as 37.30. It is usually a bullish sign when an abcd correction fails to reach its 'd' target, but we cannot be confident about this until the reaction move has surpassed at least a couple of 'external' peaks, as has in fact occurred here. Even so, I wouldn't break out the bubbly until such time as SIL pops above the 39.82 'external' peak that I've labeled in the chart. That would strongly imply that the larger, ABC uptrend begun in January 2016, with a bull-market target at 69.90 (!), had resumed. Even then, however, we would need to see a decisive pop above the 50.20 midpoint Hidden Pivot before we could infer that 69.90 was an odds-on bet to be achieved. Regardless, 50.20 would become our minimum upside objective at that time. Alternatively, my worst-case target for the correction begun in August from 54.34 would be 28.60. It is calculated by using November 9's 43.58 peak as the point 'A' high of the downtrend._______ UPDATE (Jul 9, 6:07 p.m. EDT):  SIL slipped beneath a key Hidden Pivot support at 31.87 on Friday (click here to see chart). greatly shortening the odds of a further fall to at least 28.60. This number, a major Hidden Pivot support, was first broached here more than a  month ago as my worst case target for the correction. This will be a very appealing spot to try bottom-fishing with

I proffered rally targets as high as 230.08, or even 269.40 in my last tout, but we'll lower the bar a bit just to be cautious. Mainly, it's a case of the FAANG/lunatic stocks having difficulty making headway and providing no leadership for the broad averages recently. The nearest significant Hidden Pivot resistance for this vehicle lies at 217.67, equivalent to a DOW rally of a little more than 300 points, and we should trade with a bullish bias until it is reached.  There have been no 'mechanical' buy signals as yet, but we can respond to the opportunity intraday if this occurs. Stay tuned to the chat room if you care. The target is sufficiently clear and compelling that we should have no qualms about getting short there -- tightly stopped -- if and when it is reached._______ UPDATE (July 9, 6:06 p.m. EDT): Last week's thrashing and flailing generated a bullish impulse leg that is additive to the larger pattern projecting to 271.67 noted above. However, traders who used the smaller pattern to  generate a buy signal would have been stopped out three times trying to get off the launching pad. DIA tripped yet another buy signal at 213.86 on Friday off these coordinates on the hourly chart: A=211.70 (6/29), B=215.38, and the signal would grow in significance if there's a follow-through on Monday that exceeds p=214.78, a midpoint Hidden Pivot tied to a target at 216.62.  We'll let DIA tell us how it's feeling before I provide further trading guidance._______ UPDATE (Jul 10, 7:03 p.m.): The intraday high fell slightly short of my 214.78 benchmark before dropping back into a shallow correction. We'll give the uptrend another day or two to either fly or die, but the longer DIA hovers, the more likely the next move of

We were looking to do some bottom-fishing if AMZN fell to a promising-looking correction target at 938.17, but the stock instead carved out a choppy bottom well above that last week and now looks headed to 983.59 most immediately. That's the midpoint Hidden Pivot resistance of a pattern projecting to as high as 1016.18 over the near term. I'm not recommending any trades at this point because I want to see how the rally interacts with the midpoint pivot. I am skeptical that the implied $38 rally to the target is coming, however, since, even if the stock merely flirts with that number, it would be indicating more upside to a 1083 target first broached here a while back.  That is a very major Hidden Pivot, and although there is nothing in the charts to suggest it won't eventually be reached, I'm going to advise caution because of the nutty, tortuous nature of the correction that has obtained since June 9. As always, I'll remind you that this stock holds the key to the bull market, and that getting it right will allow us to avoid being trapped either by a head-fake or a shakedown. For now, all eyes on 983.59._______ UPDATE (Jul 10, 10:10 a.m. EDT): Bucking a lackluster tech sector, AMZN has blown past 983.59 with ease this morning. This makes a minor target at 1016.68 broached here earlier a shoe-in as far as I'm concerned. Once above this HP resistance (daily chart, A=950.86 on 6/15), there will be no stopping the stock until it hits 1083, a major Hidden Pivot target that looks likely to produce a top.

The gnarly looking pattern shown is the one I'd suggested using at the moment. It implies a further fall of of 22 points from current levels to exactly 2387.75. I consider this likely because of the way in which the decline shredded the 2421.13 midpoint Hidden Pivot support. The target is somewhat lower than the one given here earlier at 2394.00, but I'm more comfortable with it because the pattern itself is not nearly as obvious. To get short, offer a single contract 'mechanically' at 2412.25, stop 2420.25. To cut the implied $400 entry risk by as much as 90%, I'd strongly recommend using a 'camouflage' set-up on the three-minute chart. That implies shorting the first downtrending abc pattern that perfectly meets our criteria once 2412.25 has been touched by a rally. I've sketched this hypothetically for your further guidance.________ UPDATE (Jul 9, 6:04 p.m.): Friday's jerky uptrend generated nary a single bearish impulse leg, even on the three-minute chart, so I'll assume nothing was done on the order. If you took the more risky 'mechanical' trade, however, the single-contract loss would have been about $400.  Now, the subsequent rally to the green line at 2424.31 has tripped another 'mechanical' sell signal, but the same guidance obtains: in 'camouflage' fashion, short only a downtrending abc that meets our criteria for this type of trade. In any event, the implication of the foregoing is that the rally will still fail somewhere shy of the point 'C' high at 2436.50, and that the futures will subsequently fall to the 2387.75 target shown. If 'C' is exceeded to the upside, however, it would strongly indicate that yet another short squeeze, presumably to new record highs, is under way.

The stock market rallied on Friday on employment news that should have been cause for worry rather than celebration. It is yet one more sign that shares have completely decoupled from reality if not yet sanity. Although the work force was reported to have grown by 220,000 in the last month, there has been scant wage growth to support the Fed’s increasingly farfetched narrative of economic recovery.  Clueless as ever, The Wall Street Journal expressed puzzlement over how a relatively tight labor market could be producing such little pressure for higher wages.  As the rest of us well know, impressive strides in technology, particularly where they affect the retail sector, have been damping the demand for unskilled workers, and for skilled workers at increasingly higher pay grades. Even as thinking machines have replaced human labor with increasing efficiency, the political tide has shifted toward minimum-wage populism, resulting in an urgent push by employers to automate as many jobs as they can. Some will point out that, historically speaking, new technologies and production methods have ultimately always created more jobs than they destroyed.  This may prove to be the case yet again. But the process could conceivably take decades this time around, or even generations, before the economic benefits of today’s creative destruction are fully realized. Bill Gates, for one, evidently gets this, suggesting as he did recently a tax on robots. Where fiscal policy is concerned, a better back-door entrance for Socialism could not be conceived than Gates’ suggestion. Of course, Bernie Sanders voters would not pause to wonder who, ultimately, would pay those taxes. “Why, ‘corporations,’ of course!”  Those on the political left delude themselves when they rail against for-profit corporations as though they were corrupt, despotic monoliths rather than mere human beings organized and affiliated to produce wealth

Thursday's moderate selloff provided a refreshing breeze for bears, but it won't mean much if they can't extend the decline for a second straight day. The Dow fell 158 points but would need to fall a further 162 points to damage the bullish look of the hourly chart. The precise number is 21159, and if the Indoos were to hit it by the close, that could spell trouble next week. Regardless, the broad averages have felt heavy lately, seemingly unable to get any lift from the news. Geopolitical events have had very little impact on the bull market, but the increasingly grim situation involving North Korea could be enough worry traders even if nothing quite spooks them.