Rick Ackerman

I'd expected stocks to fall even harder than they did on Friday, especially in the final hour, but DaBoyz did a terrific job keeping the market afloat after around 11 a.m.  Prices chopped their way moderately lower thereafter, allowing the smart guys to distribute stock on a day when the Dow was down more than 700 points. That was quite a trick, actually. Weakness is all but certain to continue Sunday night, but on DaSleazeballs' terms. That implies they will pull their bids and let index futures plummet on zero volume. By Monday's opening bell, with sellers exhausted, it will be relatively easy to touch off a short-covering panic.  That's about as much as I can predict with good confidence at the moment, but we can use the Hidden Pivot levels shown in the chart to exploit swings in either direction. For starters, look for the Sunday night selloff to hit p2=2941.00, a potentially opportune spot for bottom-fishing with an 'rABC' set-up. ______ UPDATE (Jun 29, 950 p.m.): Price action is about as wishy-washy as it gets, although it still smells like distribution. _______ UPDATE (Jul 1: 12:02 p.m.): A subscriber asked in the chat room whether shorting 'mechanically' at x=3084.50 was recommended. I replied that  I'd rate the mechanical short as VERY appealing at a gut level, but very dangerous technically. _______ UPDATE (Jul 1, 9:28 p.m.):  Use this pattern to trade the September contract as it works its way up to the 3175.00 target.  The stall precisely at p=3119.00 could mark an important top, but I doubt it. In fact, this evening's pullback to x=3090.94 is an appealing mechanical 'buy', stop 3062.50.  Similarly, a pullback from 3147.31 to p would offer an excellent opportunity to board the uptrend belatedly.

After being locked in a tedious range for nine weeks, the futures have broken out in an unspectacular way. They are bound for the 1875.20 target shown in the chart, and we shouldn't be surprised if reaching it turns out to be a two-week slog. Getting aboard the uptrend intraday has been tricky, to say the least, but our best bet is with a 'mechanical' set-up. It's a bit much to ask, but a retracement to 1720.10, the green line, would be a back-up-the-truck opportunity. Smaller patterns may give us a chance as well, but we'll have to play it by ear. In any event, you can use p2=1823.50 as a minimum upside target for the near term. ______ UPDATE (Jul 1, 9:44 p.m. ET): The slog I told you expect could at times feel more like the Bataan Death March. Today, for instance. The plunge did not alter my bullish outlook, although it could create a potential tightly stopped buying opportunity at 1766.80. That's a Hidden Pivot midpoint support on the 15-minute chart, where a=1797.90 (8:30 a.m. on 7/1); b= 1767.90 (11:30 a.m.).

I started tracking DIA again thinking it would provide a way to trade the swings without having to use futures contracts. Alas, this ETF for the Dow plays catch-up nearly every day, gapping up or down on the opening depending on what index futures have done overnight. However, the 242.09 target looks ripe for bottom-fishing, notwithstanding the existence of  'structural' support from some lows made near 242 a month ago.  Accordingly, I'll recommend buying four expiring 254 calls if DIA gets within 5 cents of 242.09. That will probably be the lowest strike available for under $1. The order is good for the first hour only. The trade seems likely to survive whatever plunge DaBoyz are able to engineer Sunday night, since the Dow would have to fall more than 800 points to negate it. ______ UPDATE (Jun 29, 9:56 p.m. EDT): The trade detailed above came nowhere near triggering.  Instead, an inside day left no interesting possibilities for the moment.  _______ UPDATE (Jul 1, 12;12 a.m. EDT):  A 'mechanical' short at the green line looks moderately enticing, although I've advised against a similar trade in the E-Mini S&Ps due to the sums involved. In this case, you can take a small speculative stake using Jul 10 puts at the first strike where they are priced under 1.00 (241 should be close). Index futures have already gapped above the green line in night trading, and it's impossible to predict where this vehicle will be at the opening bell. I may be able to sharpen (or perhaps cancel) the trade then, so you should hold off unless you really know what you're doing.  _______ UPDATE (Jul 1, 9:48 p.m.): With a three-day weekend approaching, I'll suggest shifting to the July 17 puts.

A fall to x=346.37, the green line, would trigger an enticing 'mechanical' buy with a stop-loss at 332.58. The initial, theoretical risk on 200 shares would be almost $2800, so this trade is not for everyone. However, mechanical set-ups have been working consistently in this stock, as anyone who has followed my recent touts may have noticed.  I might be able to substitute call options for stock, but please note that the green line should not be used or thought of as a support or a Hidden pivot whence AAPL is likely to bounce, since it is neither. Stay tuned to the Trading Room if you care. Focusing on a much bigger pattern, last week's top an inch from a clear and compelling target at 370.16 is good reason for caution. It could mark the top of AAPL's insane rally, and therefore a possible top in the stock market. The smaller ABCD pattern that had led me to project 385.48 remains sufficiently persuasive nonetheless to keep that target theoretically in play. We'll be better able to weigh the odds once we've seen some downtrending abcd patterns play out. If they easily exceed their 'd targets, it would affirm the bearish outlook. ______ UPDATE (June 29, 9:57 p.m. EDT): The downtrend didn't play out at all, but I don't see the uptrend going anywhere either. ______ UPDATE (Jul 1, 12;23 a.m. EDT): A push above last week's record-high 372.38 would make a further run-up to 385.48 an odds-on bet. _______ UPDATE (Jul 1, 9:55 p.m.): The stock has shown poor relative for two days. Although it may need a pullback for a running start into the next leg up, if weakness brings it down to x=358.09 in this chart, that would trigger an appealing 'mechanical' buy at 358.09, stop 351.27. 

The 10,341 rally target disseminated her last week was narrowly missed, meaning it is still in play theoretically. That implies that a pullback to the green line would set up a 'mechanical' buy with a stop-loss at 9368.00.  I am not recommending the trade, however, since initial risk would be around $4870 per contract. You might want to paper-trade it anyway just to see whether our long winning streak using these big-picture set-ups continues. If you substitute QQQ calls and actually do the trade, be aware that the green line is not to be construed as a possible reversal point. In fact, it serves just two useful purposes, once of which is to let us know when a 'mechanical' trade has been signaled. _______ UPDATE (Jul 1, 10:04 p.m.): Buyers easily pushed past the 10,193 midpoint Hidden Pivot shown in this chart, shortening the odds that D=10,657 will be achieved. An unlikely drop to x=9960.75 would trigger a 'mechanical' buy, stop 9727, but p itself would become a buying level, stop 10.038, on a retracement that has come from a high very near p2=10424.

If you thought the resurgence of Covid-19 in the U.S. would put a damper on Wall Street's orgy, you'd have been wrong. Stocks continued their heedless ascent on Thursday even though the pandemic is close to extinguishing a fragile economic recovery that had barely gotten off the ground. The Dow rose 300 points, demonstrating yet again that champions of the V-shaped recovery still hold sway in the markets.  Two consecutive down days seems to be as bad as it gets any more, regardless of the headlines.  This observation in itself is reason for extra caution, since it implies that we've all gotten a little too used to buying the dip on day three. One of these times, probably soon, that dip is going to turn into an avalanche that will last for weeks.

This lesson will refresh your memory concerning some subtle but important characteristics of tradeable patterns. Finding good impulse legs is the key to using the Hidden Pivot Method profitably, and the rules are simple and few. Mainly, it’s a matter of choosing trend legs with ‘B’ highs or lows that have exceeded ‘external’ highs and lows. Avoiding ‘sausage’ in this way is easy if you pay attention to the rules. There are some finely nuanced examples here to help you spot winning patterns.

It was a real shocker to see stocks get drubbed merely because of a nasty resurgence in the coronavirus. V-shaped mania was overdue for a breather, though, and we should be prepared for perhaps another day or two of selling.  But given that there is a quite bullish target outstanding in AAPL, the most institutionally beloved stock in history, don't be surprised if bulls are raring to go next week or even earlier when they realize that the latest outbreak will not make the coming Second Great Depression any deeper than it was already going to be.  That kind of thinking is guaranteed to put a smile on Wall Street's face and a song in its obsidian heart -- this song perhaps.

AAPL has blown past a longstanding rally target at 370.15, implying it is bound for yet another at 385.48 that lies a further 5.4% above. Because the stock is almost certain to get there, the broad averages can be expected to move higher with it. This seems hard to believe, given the grim turn of pandemic news. Fauci sees no slowing of Covid-9 this summer and downplayed the idea that hot weather can affect it.   That is turning out to be true in hot, muggy Florida, which in the last few days has shot up to the top of U.S. trouble spots.  Businesses struggling to survive until 'something' changes for the better are going to have a rough time getting though the summer. However, if AAPL continues to lead the charge on Wall Street as it has been doing for years, it would mean that none of the foregoing  will even remotely faze stock-market bulls.