Rick Ackerman

This rabid weasel could turn on us at any time, but for the now we should assume it's bound lower, to at least the 1605.50 target shown. It's not quite a done deal, however, since the intraday low occurred precisely at the 'p' midpoint pivot associated with our target.  If it's breached Thursday in the early going, that would affirm the target and make any feint north a tempting short.  Camouflageurs should look for the opportunity on charts of five-minute degree or less, taking the first signaled entry point if it looks subtle.

Like the carnival midway, on Wall Street nearly every thing that happens is a rigged game. Customers exist to be fleeced, and the bunco artists who do the fleecing are just Ivy League-educated carny men with their own versions of the whirling spindle, the devil's bowling alley, cats on a rack, the cigarette shooting gallery, the six-ball rolldown and the hurdle ladder. The main difference between the carny men and Wall Street's best and brightest is that the latter have better teeth. Currently, one of the more popular scams they've been plying involves goosing stocks higher each day no matter what the news. Paradoxically, this usually begins with stocks diving on the opening bar. The purpose of this set-up is to exhaust sellers, allowing the flim-flammers to accumulate some inventory at fire-sale prices before running shares back up the bears' wazoos. Bomb-Proof Stocks With corporate earnings falling, incomes stagnating and mortgage rates in a steep ascent, one might expect share prices to be collapsing. Instead, the stock market is being held aloft each day by rallies in a select group of stocks that are assumed to be nearly bomb-proof: Amazon, Netflix, Priceline, Google and Apple. Much as the prudent investor might want to offload shares these days, it is psychologically difficult when the lunatic stocks are pushing double-digit gains early in the session. Lately, though, even these stocks are getting dragged down by the weight of the broad averages. Yesterday, for example, most of the hot stocks were up 1%-2% in the early going. By the final bell, however, only two of them -- Apple and Google -- were still holding gains, albeit well off their highs. What this suggests is that DaBoyz are finding it increasingly difficult to hold the high-fliers aloft for long enough to distribute shares in

The dollar's weakness versus the euro in recent weeks seems bizarre only if you imagine that it will continue. My guess is that the relationship is about to reverse, demonstrating yet again that the swings of the dollar and the euro over the last year-and-a-half have been gratuitous and technically driven. Notice that the selloff that followed July's 84.75 peak, although fairly steep, was not vertical. One might have expected worse, given the viciousness of the trap sprung on bulls just a few deceptive ticks above May's high. Instead of falling apart, however, the dollar merely stairstepped lower after a wicked two-day downdraft. The process has continued, becoming more labored over the last two weeks as sellers' potency has waned.  Now, my guess is that DXY is about to fake out bears with a feint beneath June's 80.50 low before turning higher with the same energy that sent it tumbling in July. _______ UPDATE (September 3): The dollar is up about 2 percent since the forecast above first appeared, although the rally did not require a fake-out beneath 80.50 to get going; the actual low was 80.75. Now, with just a small push above 82.49 (an 'external' peak recorded on 8/2), buyers would refresh the bullish energy of the hourly chart.

The run-up in some of the high-fliers yesterday (NFLX, for one)  was so steep that scalpers would have done best to have taken every signaled 'x' entry point on the lesser charts. Under the circumstances, the contrarian might start Wednesday with the notion that the truly unexpected would imply a repeat performance.  DaBoyz have been waiting for an opportunity to apply the squeeze, and it could very well come in the form of good/bad news -- take your pick -- from the Fed.

Like Tesla's sportster, the stock can go from zero to sixty in under four seconds  -- behavior that at once courts danger and opportunity. The chart shown evinces plenty of the latter, with a short-squeezed opening bar that turned out not to have been a bull trap. Notice how the high of that bar got past peak #1 without breaking above #2. That's about as 'camouflaged' as gap-up openings get, but even then you'd have needed to ride the whirlwind for the rest of the day just to eke out a $2-per-share gain. From here, the best play I could imagine on Wednesday would come on a quick (i.e., 90-second or less) pullback from pennies above peak #2. If it takes the form of a sharply etched b-c leg, I'd suggest jumping aboard at the 'x' entry without thinking about it. _______ UPDATE (10:45 a.m. EDT): This time the opening was a bull trap, with the stock touching 150.31, just above peak #2, on the first bar before diving to a so-far low of 146.25. Since there was no C-D rally, we did nothing and hold no position.

As you can see, yesterday's rally was just coitus interruptus, with a frustrating stop at Redfern that just missed going 'impulsive' on the 120-minute chart (and the hourly). Ordinarily that would be the  kiss of death for a minor bull cycle, but my hunch is that buyers will have another run at it unless some horrid piece of news darkens their state of mind on Wednesday. Traders looking for action and adventure may have to zoom down to the one-minute chart -- the only source of 'camouflage', and just faintly so -- to be found late Tuesday night.

The stock market's underlying weakness is being masked each day by the ability of DaBoyz to short-squeeze the bejeezus out of the lunatic stocks -- i.e., the few companies, mostly Internet-based, that presumably can be counted on to make money even if America sinks into a Depression. Even so, it's doubtful that the likes of AAPL, AMZN, GOOG, NFLX and PCLN can continue to hold back the bearish tide.

Bears shouldn't get their hopes too high, since, as I mentioned elsewhere, an entire week's hard-won losses could be recouped by DaBoyz in mere minutes if a mote of short-squeezable news comes across the tape. That is what they are waiting patiently for, although for the time being there doesn't seem to be enough legitimate buying to hold stocks aloft for more than the opening minutes of a given session.  Notice in the chart that the selloff from last week's highs has exceeded three prior lows, two of them 'externals'. A key battle between bulls and bears lies ahead, at the still undetermined 'p' midpoint support of the hypothetical pattern shown. If this is a bear market a-borning, the support should be obliterated on first contact.  Hidden Pivot scalpers should note that yesterday's best shorting opportunities occurred after the creation of second point 'C'. This is most clearly visible on the five-minute chart.

We hold 32 September 140-135 put spreads 1:1 with a cost basis of 0.11.  To completely eliminate risk from this position, which cost us $352, I've suggested selling half of the spreads for 0.33.  In fact, we can cover our entire outlay plus an assumed commission of $50 by closing out 16 of the spreads for just $25 apiece. This modification is timely, since the spread closed yesterday on a bid/asked of  0.19/0.28.  That means you may be able to get the order filled for 0.25 by simply offering it at an in-between price. However, if DIA continues to sink — even furtively, as has been occurring — it should be easy to close out half the position for 0.25 today or tomorrow.  The remainder of what we will hold would give us a shot at an $8,000 profit, although that would require a 1500-point drop in the DJIA between now and September 20. Realistically speaking, we stand an excellent chance of quintupling our stake or better even if stocks merely continue to drift lower rather than plummet.. FYI, here's an observation concerning stealth selling that I posted in the chatroom during yesterday's constipated session: "The stock market still looks like not-so-sly Distribution: shake out all the sellers on the opening bar so that DaBoyz can run stocks up as high as possible; then, fade to black. The run-up piece of this ruse has not been getting much mileage lately, but with the right 'news,' three days of drifting lower can easily be recouped in under five minutes." ______ UPDATE (August 21, 4:30 p.m.): With the collapse, as anticipated, of today's fraudulent Fed-'news' rally, the spread is going nicely our way.  It was 0.27 bid at the close, so I'll assume everyone was able to exit half of the position