Rick Ackerman

The futures made scant progress toward our 2439.00 target on what turned out to be a remarkably slow Friday, but they remain on track nonetheless for a push to that number shortly after Memorial Day.  The decisive move past the pink line, a secondary 'hidden' resistance, could set up a 'mechanical' bid there, stop 2398.50, but there would need to be an interval first that allows for a few more bars of 'hovering' before the futures can trip a proper buy signal via a pullback to the line. Since, on the 480-minute bar chart, this could take a few more days, you should consider using a 'camouflage' trigger to avoid missing a possible breakaway move on Sunday night or Monday. This wouldn't necessarily change our odds, but it would guard against missing the trade if the futures take off with a lurch after barely correcting.  _______ UPDATE (May 30, 11:58 p.m. ET): The futures have rolled down to the pink line, tripping a theoretical 'mechanical' buy signal at 2408.50, stop 2398.25. I'm not enthused about the trade, however, because it looks more weakness is needed to correct the steep run-up from the 2344.50 low of the Trump-is-failing dive of May 18. Under the circumstances, if you're looking to get on board for the next rally, I'd suggest crafting a 'camouflage' entry trigger with the 5-minute chart or less to avoid the implied initial risk of about $500 per contract. _______ UPDATE (May 31, 7:36 p.m.): The mechanical trade mentioned above is working, but not in the easy way we should prefer. We'll move to the sidelines until the nutty price action subsides. At the close, shorts were getting squeezed hard enough to provide at least a little carryover into Thursday.

Although we found no real-time trading opportunities during this session, there were some promising set-ups in a few high-fliers, including NFLX and AMZN. The best of the lot was in VXX, where a very gnarly ABC pattern looked likely to provide the sort of leveraged play we look for in this vehicle. I subsequently posted it to The Scoreboard and the trade was still pending at the end of Wednesday’s session. Check it out if you’re keen on doing the trade, or even if you just want to see what a good set-up requiring a little patience looks like.

It will be more than a little tempting to short into a sharp rally on Friday, since the stock market, FAANG stocks in particular, feels like it's in a blow-off phase. Factor in the impending three-day weekend and the always-menacing possibility of horrific news, and it's worth a gamble to take home a few put options in QQQ or calls in VXX.  We already hold positions in both but will be bidding to augment them as the week draws to a close.

I hadn't noticed the 140.00 target shown in the chart until today, but it looks quite promising as a place for QQQ to make an important top. Accordingly, I'll suggesting trading as follows: Bid 0.30 for eight June 9 139.50 puts, good through Friday; and bid 0.80 for four June 9 140 puts, day order, as long as QQQ has traded no higher than 140.09.  I am banking on downside targets for the options to give us the right price, but I am also factoring time decay for the 140 puts, since the implications of a four-day week following the holiday will not be lost on those inclined to short the puts. Stay tuned intraday, since I might need to adjust these prices on-the-fly. Although I'm mildly in love with the 140.00 target, don't go hog wild with this bet, since we'll be stepping directly in the path of a runaway freight train that has been mowing down bears for more than eight years. _______ UPDATE (May 25, 11:26 p.m. ET): QQQ opened at 140.31, negating our order for June 139.50 puts. For Friday only: Raise the bid for eight June 9 139.50 puts to 0.40, day order. I wouldn't deign to show you yet one more chart with a promising rally target. The FAANG stocks, and therefore QQQ, have shredded them all, and it would be foolish and presumptuous for me to to suggest the next target will be The One.

We treat AMZN as the key stock market bellwether for the entire investment world for good reason. It can drag U.S. stocks higher on any given day and keep them buoyant when interest in the markets is lackluster. On Wednesday the stock opened with the usual gap higher and then pulled back in bull-trap fashion. But after retracing the entire gain over the next 90 minutes, buyers found their footing and moved the stock steadily higher -- first to within an inch of the 977.76 rally target we were using to stay on the right side of the trend; and then, by day's end, to new record heights. You can use the minor ABC pattern shown to get a precise handle on this move, but don't expect DaBoyz to gift us with a 'mechanical' buying opportunity on a pullback to p2 or p. (Notice nevertheless that today's midsession pullback to the green line provided a perfect set-up for a 'mechanical' entry and a belated chance to get aboard at the low of a $10 rally.) _______ UPDATE (May 26, 12:51 a.m. ET): With Thursday's manic thrust, the 1000 barrier has become more important than any Hidden Pivot target I could offer you. Ahead of the three-day weekend, be wary of a bull-trap poke above it in the early going.

Zillionaire Asher Edelman was quoted on ZeroHedge the other day saying he has 'no doubt' that the Plunge Protection Team is behind the stock market's steep rally since the election. With all due respect for Mr. Edelman and others who believe this, it is conspiracist poppycock. Yes, the Plunge Protection Team, which is officially known as the Working Group on Financial Markets, does exist, having been created under President Reagan. And I have no doubt that it will be pressed into action some day when the inevitable avalanche hits Wall Street. But the source of the stock market's ongoing buoyancy at present is not the PPT, which has no reason to act unless there's a crisis, but rather the unlimited sums of credit available at zero or near-zero interest rates to institutional investors and to companies that continuously buy back their own stock to artificially inflate earnings per share. This dynamic is quite sufficient to keep the markets buoyant as long as the easy-money spigot remains open. Moreover, the bullish effect is powerfully augmented by short-covering, the most urgent source of buying -- indeed, the only source of buying sufficiently powerful to push the broad averages through heavy layers of supply to new record highs.  With that kind of boost the stock market hardly needs the Plunge Protection Team to keep the bull market going. Ultimately, however, and as any student of history could tell you, when the forces of nature usher in a bear market as is inevitable, the PPT will be powerless to affect it, let alone stop it.

Buyers were repelled today by the 1263.80 'secondary' pivot shown, failing badly in their attempt to achieve the 1269.80 rally target that had  looked so promising at Monday's close. The chart will likely have something to say about 'Matt's curse,' whereby a stall exactly at the secondary pivot usually proves fatal to the minor trend. In this case, according to Matt, a regular in the Rick's Picks chat room who trades mostly silver, it would imply more slippage to beneath the 1245.70 point 'C' low. That wouldn't kill the larger uptrend that has been in progress since May 9, but it would certainly dampen bullish spirits for the time being. For now we'll move to the sidelines, since the only opportunity that seems imminent would be a scalp-short overnight. _______ UPDATE (May 24, 6:03 p.m. ET): The futures rallied from a shallow hole today (click here for chart), seeming to dodge 'Matt's curse' for the time being.  The rally is potentially tradable via 'camouflage', but you'll need to zoom down to the 5-minute chart to find 'external' peaks suitable for this approach. _______ UPDATE (May 26, 12:58 a.m.): The June contract will need to pop above 1269.70, an 'external' peak recorded on May 1, to get out of  pussyfooting mode. Not that gold looks bad at the moment, but we should demand something more of it before we shift our attention in earnest to the 1311.70 target broached here earlier.

I've been using very ambitious targets for some FAANG stocks that have helped lead the bull market higher, but because two of the most important ones, GOOG and AMZN, began Tuesday with bull-trap opening bars, it's time to turn cautious, especially with the approach of a three-day holiday weekend. In practice this will mean using price objectives taken from the respective hourly charts of the two stocks. For GOOG, that would leave room for a rally of about $8 to exactly 956.75; and for AMZN a $6 rally to 977.76. Let's see how they perform relative to these modest benchmarks.

We've been using the 977.76 target of the pattern shown (see inset) as a minimum upside objective for the near term. Tuesday's price action generated a 'mechanical' buy signal at 967.82, but there were no reports in the chat room off anyone having done  the trade. If you did, use a 964.50 stop-loss for now. The stock could pop to the target overnight, so the position would need to be monitored closely if you expect to exit optimally. A decisive thrust past 977.60 would be telegraphing more strength over at least the next day or two.  Alternatively, it would take a drop exceeding 951.21 to hint of any short-term trouble.