Rick Ackerman

To all of my subscribers and readers, warm holiday greeting and best wishes for a happy, healthy and prosperous new year.  It begins with many troubling issues unresolved, most particularly the question of who will be the next U.S. president. Various vaccines promise to ease the pandemic, but possibly not in time to prevent many small businesses from failing.  A bright spot, particularly in states like California, New York and Michigan,  where dictatorial governors have disregarded individual rights, is that business owners are at the point of revolt. This bodes well for America, since our political leaders are obviously in need of rebuke and a reminder of whom they would serve.

This session had the highest attendance of any Wednesday tutorial session held to date. It features some timely examples of 'mechanical' set-ups, but also a refresher on rABC trades, which have been out-of-fashion lately because of the emphasis I've put on set-ups that are companionable with TradeExchange.com's platform. There are some very subtle points, previously undiscussed, that concerned the use of p1 and p2 levels for 'mechanical' buys.

The broad averages have been lapping at some long-term rally targets this week, although not so voraciously that bears should dive for cover quite yet. A 304.07 target for DIA has been exceeded so far by 1.63 points; a 312.29 target in QQQ by 2.35 points; and 12,829 target in the E-Mini Nasdaq by 89 points, or  0.6%. These Hidden Pivot resistance points have already served us well, keeping us comfortably on the right side of powerful uptrends that flouted the pandemic's fatal effect on a wide swath of the U.S. economy. Small businesses are failing by the thousands each day, creating structural unemployment problems that will be with us even if there are ten more stimulus packages yet to come. Wall Street seems not to care, as long as a handful of mega-cap companies that earn their money mainly from advertising continue to grow in value. They have been inflating 'wealth' by tens of billions of dollars each day, dulling whatever lessons investors may have learned from the last bear market. Please note that the Dow Industrials are poised to rally a further 2300 points, to at least 32,692, if the new year begins with a bang. It's hard to imagine what could stop it.

With the post-Christmas resumption of trading Sunday morning, bitcoin tacked on an insane $3,000 in the blink of an eye. Even more preposterous is that a correction one might have expected to last for at least three to five days appears to have run its course in mere hours. This has raised the prospect of cryptomoney fever achieving yet another record high before dawn. How much farther could the rampage go?  A projection using the Hidden Pivot Method suggests that the next big thrust will hit 33,600, about 6000 points, or 22%, above these levels. But why should it stop there, we might ask, with mass hysteria's Olympus beckoning at 100,000? We'll be better able to assess whether bulls have the gumption to get there once we've seen how they handle the 'hidden' resistance at 33,600. If this proprietary pivot is dramatically impaled on first contact, be prepared for a burst to 50,000, a marquee-quality number that would be in play simply because I will have run out of Hidden Pivot targets. Support from Billionaires Disclaimer:  I think bitcoin is, if not a hoax, then a cleverly marketed scheme on the order of alchemy and cold fusion. I get emails all the time from bitcoiners convinced cryptocurrency should be prized over all other investable assets, particularly gold. The most fervent believers are robinhoodies and millennials with little experience of precious metals, other than as jewelry that old people wear. At gold's expense, they have helped push bitcoin into its second speculative mania, the first having ended woefully in 2018. The collapse that year took it from an all-time high of 19707 down to 3134. The current short-squeeze supernova has much more power behind it, however -- not only from speculative excesses fueled by buyers too young to know about or

For a couple of days, it almost looked like bulls were going to avoid filling some large gaps they'd left on the intraday charts the previous week. Alas, they turned uncharacteristically timid as the new week began, turning a tedious stall into a full-blown rout when trading stopped mid-day on Christmas Eve. No doubt they'll be back, but it will be interesting to see how Mr. Market challenges them to get on board for the next big leg up. The 37.86 target given here previously is no longer viable, nor is there any magic correction target I can offer you at the moment. Stay tuned in any case, since more bullish opportunities are surely coming. _______ UPDATE (Dec 28, 5:25 p.m.):  Today's bull-trap dive just missed triggering a 'mechanical' buy at the green line (x=29.82), stop 27.13. This strategy is still viable, but only for traders prepared to monitor the trade at night. _______ UPDATE (Dec 30, 6:57 p.m.): The 'textbook' mechanical trade triggered and has gone deeply in-the-black, putting a D=38.20 target in play. The pattern uses a corrected 'B-C' segmented, but the original pattern would have worked just as well, getting traders aboard near the low of a so-far 24-hour surge of 12%. If you did the trade, please let me know in the chat room so that I can determine whether to provide tracking guidance. You should be out of 50% of the original position, with an additional 25% offered at p2=35.28.

Although DIA has yet to surpass a longstanding target at 304.07 after a month of trying, it hasn't retreated much either. Subscribers bought puts for a cheap speculation last week nonetheless -- not because a plunge is certain, but because the betting odds are better than they've been for a while. Indeed, the Hidden Pivot target is clear and compelling, and bulls may have gotten all the mileage they're going to get from that old standby, 'vaccine hopes'. However well the available vaccines work, it's going to be a long slog back to steady economic growth, and many more small businesses, along with some large ones, are certain to die along the way. Investors are probably thinking that things can only get better in 2021, but that is not necessarily so. There is reason to doubt that the news environment, such as it is, will support a bullish stampede into the new year, and that is why we should own some puts. ______ UPDATE (Dec 28, 5:30 p.m. ET): The unruly little porker poked its snout slightly above 304.07, but there's not much we can do about it, other than marvel at DIA's bold effrontery

The E-Mini S&Ps haven't gotten as close to the 3767.25 major rally target shown in the chart as some other indices have to their respective targets, but the shortfall could vanish in a trice if TSLA goes nuts as it sometimes does. Regardless, there is no rule that says a bull market must end at a D Hidden Pivot, and that's why we should be alert to a possible reversal in this vehicle even if the fat lady hasn't sung. We hold no official position, since it is too nerve-wracking to try to pick a top using index futures and a tight stop. If there is an appetite in the chat room for shorting this vehicle, please give me shout, since I may be able to provide timely guidance. _______ UPDATE (Dec 29, 7:37 p.m. EST): Post-Christmas binging has pushed the futures to within an inch of the 3767.25 rally target that is still viable. I'll suggest spectating unless you have the technical chops to short an rABC pattern on the 15-minute chart.

The chart shows yet one more reason to think the stock market is at a potentially important top.  This is a somewhat different view from the one featured here earlier, which used a lower point 'A' to project a major top at the pattern's p2 'secondary pivot'. The new graph seems more logical in retrospect, since it captures a potential top at a 'D target rather than at a secondary resistance.  As to getting short at these levels using the futures contract, we'd have suffered three weeks of Chinese water torture, since the March contract first got close enough to D to tempt a short on December 8.  The rally that followed a sharp pullback from there would have spooked most bears out of their positions, but anyone bold enough to stay the course would have suffered a seven-day flogging from head-butting at the 'hidden' resistance.  Better to draw a bead on some way-out-of-the-money put butterfly spreads in QQQ as we have done than to have this sonofabitch ratchet another 200-300 points against us while it disembowels the very last, hardiest bears. ______ UPDATE (Dec 28, 5:49 p.m.): Unlike its QQQ sibling, this lunatic bait did not merely poke above a clear Hidden Pivot target at 12741, it punched well past it and then closed near the intraday high. This is ugly and unnecessary from a bear's perspective and will require shifting our minimum target to 13555 by lowering point 'A' a skoch. We can still hope, nonetheless, and however briefly, that the futures suffer a massive coronary at p2=12829, the pink line in the chart that has so far contained today's rally. _______ UPDATE (Dec 29, 743 p.m.): A two-day close above p2=12829 would meet our standards for a bullish breakout. Let's see if the keister bandits who run

We briefly grabbed the weasel by the tail last week for a profitable ride, but it became harder to tell as the days wore on who was winning, bulls or bears. The small breach of an 1864.50 midpoint support on Wednesday was not sufficient to suggest the downtrend would continue to D=1838.00, nor even to warrant a presumption of further weakness.  Instead, we were left with a faintly encouraging chart that will become still moreso on a two-day close above 1891.00. That is the Hidden Pivot midpoint resistance of a pattern projecting to as high s 1922.80 over the near term.  You can find it on the 30-minute chart, where A=1848.20 on 12/16. This pattern has the potential to signal a buying opportunity, so stay tuned. _______ UPDATE (Dec 30, 7:16 p.m. EST): A second-day close above 1891.00 on the final trading day of the year would put a little heat on the bad guys, especially if the new year begins with elevated perceptions of the evolving fraudulent-election crisis. We'll have to wait and see, but my short-term bias in bullion remains moderately bullish.