Rick Ackerman

DIA on Friday slightly overshot an exceptionally clear and compelling Hidden Pivot target at 327.27 that has been in play since mid-November, then closed above it. This does not bode well for bears because of the stellar quality of the ABC pattern, which should have shown precise stopping power. Regardless, we hold a few March 26 300 puts purchased last week for 0.86 and will continue to offer puts short at a lower strike for at least as much as we paid. This would lock in a no-risk vertical bear spread, but it'll take a 4-5 point pullback to get us filled.  Alternatively, a decisive push past 327.27 would put a 374.13 target (!!!) in play, presumably to be achieved via a continuation of the nearly vertical ascent begun from 182.10 a year ago. Here's the chart. _______ UPDATE (Mar 16, 5:58 p.m.): Although the major indexes are still in a topping range in relation to some Hidden Pivot targets I'd drum-rolled for as long as months, the so-far tiny overshoots could continue to torment bears. Alternatively, the broad averages could blast sharply higher, trashing my targets and leaving no doubt about whether even crazier prices are coming. Concerning DIA, even though its relentless rally gives no hint of weakening, I am uncomfortable telling you, simply, that it's bound for the wild blue yonder. To avoid such vagueness, here's a plausible pattern with a 343.38 target that lies about 4.5% above. It provides an intermediate objective that is not quite as ambitious as the 374.13 target given above. Finally, let me show you again how microscopically the very-big-picture target at 327.40 (slightly modified from 327.27) has been exceeded. Here's the chart. Investors looking for the return of sanity can only hope that it foreshadows the massive coronary that this overheated

Last week's steep vertical climb came within 0.67, or less than two-tenths of a percentage point, of a longstanding target at 234.82, maxing out the monthly chart. I'd suggested getting short in TZA to leverage a possible top, but it never made it down to the 28.86-28.91 level where subscribers were instructed to place a bid. The order will remain viable on Monday, but because odds are heavily against it, you should maintain a tight stop-loss initially at 28.69. Here's a TZA chart with a downtrending ABC pattern that corresponds inversely to IWM's bullish move. _______ UPDATE (Mar 16, 6:15 p.m.): Playing cat-and-mouse with TZA wore me out, but some subscribers reported getting aboard near Monday's low based on my downside target at 28.86. If so, take a small partial-profit so you can hold what remains without risking a loss. I cannot say with confidence whether TZA is at a major bottom, but IWM's so-far infinitesimally small undershoot of a corresponding rally target, a very major one at 234.82, suggests it's at least possible. ______ UPDATE (Mar 18, 5:38 p.m.): Finally, a day that bears could enjoy! The reversal in the early afternoon from a slight gain could spell trouble for the herd if it picks up speed and power ahead of the weekend.

Another angst-filled week for bears brought the futures to within easy distance of the 4023.25 rally target we've been using. Mid-February's 3959.25 peak survived the bullish onslaught intact, and buyers didn't show much energy in taking four days to vault midpoint resistance at 3872. Still, it's hard to imagine the target remaining unachieved for more than three days.  When it happens and the futures poke decisively past it, we'll shift our sights to the 4083.75 target shown in this chart. It uses the next-lower low as a point 'A'. A pullback to the green line (3811.25) would trigger a 'mechanical buy, but only if the future have gone no higher than 3965 first. Corresponding targets for the June contract lie respectively at 4010.25 and 4070.75, and a drop to 3800.50 would triggering the buy, stop 3709. ______ UPDATE (Mar 18, 5:44 p.m.): Bulls got clobbered after a rally attempt sputtered out shortly after noon. We haven't seen anything remotely resembling fear since March, but if the tempo of today's selling picks up ahead of the weekend, there might be at least a little nervousness at the closing bell.

The so-far low for this month at 297.45 just missed triggering a 'mechanical' buy at the green line, 294.75. If the Cubes should relapse to it in the weeks ahead, the trade would still be a 'go', subject to a sop loss just beneath C=260.11. Subscribers will notice that the 398.68 target of the pattern shown is somewhat higher than the already ambitious one at 377.14 presented here earlier. This is a lesser pattern, but I've given it precedence nonetheless  because it is more easily managed for trading purposes. Regardless of whether Mr Market gifts us with a pullback to the green line, the 398.68 target would become an odds-on bet to be reached following a decisive move past p=329.40. ______ UPDATE (Mar 16, 6:37 p.m.): Reading my last few touts for this vehicle, subscribers might not recall that a long-ago forecast nailed the so-far all-time high within three-tenths of a percent. The 337.10 target was dropped from subsequent touts and updates after QQQ peaked at 338.19 exactly a month ago. It has since recouped half of the steep plunge to 297 (!), but that hardly negates the possibility that a bull market top is in.  This update is simply to put 337.10 back on-the-record and to add heft to the still speculative idea that we are in a bear market.

We've been using a 66,880 rally target that comes from the weekly chart and which tripped a 'mechanical' buy signal down at 47,845 (stop 41,500).  However, the lesser pattern shown in this chart has a higher target at 69,172 that will give us more running room and a chance to get aboard belatedly, since the current long, with enormous entry risk, was originally proffered as a paper trade. The  nearly $7,000 swoon to the green line required to trigger the trade seems unlikely, given the steep, uncorrected pitch of the rally, but we may be able to craft a 'reverse ABC' set-up or a 'mechanical' bid at the red line to get us aboard. Stay tuned to the chat room if you're interested, and make sure the 'email notifications' feature on your account dashboard is turned on. _______ UPDATE (Mar 23, 6:41 p.m.): A fall to the green line would trigger a 'mechanical' buy, but because we're long already on paper, and because the opportunity has evolved into something less than stellar, I'll issue no new buy recommendation. The paper long from 47,845  remains tied to a 41,700 stop-loss, with half covered on 2/21 at p2=57,363 (daily chart, A= 7580 on 3/11/20). Its imputed cost basis is 38,327.  

Gold spent most of last week in a measured ascent, only to falter when it counted. Notice that the 1738.00 high failed by a millimeter to surpass an 'external' peak at 1739.10 recorded a week earlier. That would have created a robust impulse leg on the hourly chart; instead we got a pathetic one. This is notwithstanding the faintly encouraging rally on Friday afternoon. It may have felt exhilarating at the time, but in fact it surpassed no significant previous peaks. It must therefore be reckoned a fake, a judgment that can stand pending better performance. Let's set the bar at 1741.20 to tell us when a rally becomes worthy of our attention. That's a tick above a small but technically useful peak recorded March 1 on the way down.  Even more encouraging would be a fist-pump above the 1757.40 point 'C' high of the downtrending ABC pattern shown in the chart. It was slightly bullish that the 1667.20 downside target was not reached, but negating the pattern itself with a move above 'C' is what bulls should want to see. Alternatively, my worst-case target is still 1630.50, a dubious pattern using a 'marquee high' that will have to suffice for now. ______ UPDATE (10:06 a.m. ET): Gold's rally has done what virtually all of gold's rallies do when they become moderately encouraging-- i.e., turn to ca-ca. I am particularly skeptical when the rally seems to have been caused by some utterance by Jerome Powell, the Federal Reserve's charlatan-in-chief. I will continue to set a high bar for rallies to avoid getting sucked in by fakes. _______ UPDATE (Mar 18, 6:29 p.m.): Regarding the 'high bar' mentioned above, you can wake me if and when an upthrust hits 1768.60, since that would generate an impulse leg on the hourly chart

May Silver is on a buy signal triggered March 4, when the futures touched the green line (see inset) after having popped ever-so-briefly above the red one a month earlier.  The price spike was caused by an effusion of Reddit/Robinhoodie hubris; however, the short squeeze they'd intended did not get very far. In retrospect, it is clear that they misjudged the heft of commodity silver as well as the fact that bullion's lazy bull market is on its own schedule and cannot be hastened with mere talk. Given the artificial nature of the February 1 spike, I suggested paper-trading the 'mechanical' buy when it triggered at 25.12. The position required a stop-loss just below C=21.99, implying initial risk of more than $15,000 per contract. In any event, the trade would be a winner if the futures reach p=28.27 without having dipped first below C=21.99. I have my doubts this will occur because a recalcitrant gold has been exerting downward pull on silver, but we should keep an open mind in any event. A two-day close above p=28.275 would indicate bulls have regained their mojo and are capable of pushing this vehicle to D=34.55.

A chat-room trade in eHang (EH) was well in-the-money when this session began, so we looked closely at the conditions that had made it so enticing. The opportunity had gestated in what I call the ‘discomfort zone’, just off a low that must have looked scary to most traders. That is how we should feel ourselves when we initiate a trade: a little nervous. Were it otherwise, we’d have too much competition from too many who are acting on the obvious. This session takes a close look at the ‘psychology’ of trading ABCs.

Here’s a concise primer for spread-trading options. Specifically, we found a very low-risk way to leverage a 323.59 rally target in DIA that could be applied to similar situations. If your eyes glaze over when the discussion turns to deltas, gammas and implied volatilities, rest assured that even an English major could understand this material. There is also a tightly reasoned set-up to get long in the E-Mini S&Ps that combines a ‘mechanical’ set-up with a ‘camouflage’ perspective.