Rick Ackerman

Officially we are short from near 189.90 via the purchase of four Sep 8 180 puts for 0.12. This is a 'mechanical' trade, and although the green line (x=189.90) is neither a target nor a resistance, it is where most trades of this kind are signaled. The fact that the rally topped two cents from the target is mere coincidence, even if it may have felt like we got the trade exactly right. If time erodes our puts to the vanishing point by mid-week, we may try again. Regardless, you should be offering half of the puts to close for twice what you paid for them. _______ UPDATE (Sep 6, 2:40 p.m.): Today's so-far quadrupling-or-better of AAPL 180 puts extends a Rick's Picks winning streak that stretches back beyond memory for option trades posted either as touts or as spontaneous 'berries'  in the chat room. Anyone who bought the puts for 0.09 to 0.12 on last week's guidance should be out of half to three quarters of the position by now. Save a few for Friday, since the explosion of these still-out-of-the-money options has spooked the clowns who are short them. Even if they did so as part of a hedge, they would still be in trouble due to the deadly negative-gamma exposure of options that only yesterday were $10 out of the money. Here's the chart, so lovely and gratifying. _______ UPDATE (Sep 7, 2:16 p.m.): Nailing the 189.90 top of AAPL's hellish plunge within two pennies, and timing it nearly perfectly, produced quick gains of as much as 10,000 percent on puts that could have been acquired for as little as 0.06 just a couple of days ago. They traded as high as $6.60 today in panic selling that deepened the already-punitive losses from a day earlier. Many subscribers apparently

This ETF proxy for long-dated Treasurys looked promisingly perky until last Thursday, when it spiked to a high that narrowly failed to clear an 'external' peak at 97.37 recorded on August 8. The subsequent relapse on Friday generated enough momentum that bulls will have their work cut out for them if they should attempt to slow the fall.  Otherwise, look for this vehicle to continue its long dirge down to at least p2=88.05, the secondary Hidden Pivot support of a pattern projecting to as low as 80.84. Presumably, that would square with my projection of a 5.53% rate on the Ten-Year, which settled last week at 4.17%. [ Note: The chart and downside targets have been corrected to replace earlier data that appears to have come from the Twilight Zone.}

The bullish pattern shown, with a 4573.25 rally target, will likely control price movement as the new week begins . It has already produced a profitable 'mechanical' buy on the pullback to the green line (x=4405.81), and we could see an equally opportune short materialize when the target is reached. This looks very likely, given the way buyers stabbed through p=4461.63 at the start of last week. The move accounted for most of the week's gains, illustrating yet again how volumeless gaps and short-covering are responsible for most of the bull market's orchestrated rise. Since the short would require a 30-point trigger interval, we'll look for our opportunity on the lesser charts when the time comes. For now, though, your bias should be bullish and allow for the possibility of a drop to p=4461.63 to trigger a 'mechanical' buy, stop 4424.25. The earlier in the week this occurs, if it does, the more attractive the trade. ______ UPDATE (Sep 6, 6:30 p.m.): We'll need to remind ourselves when ES plummets to the green line (x=4405.81), leaving many traders terror-stricken, that we are being gifted with a fairly attractive 'mechanical' buying opportunity. It won't be a back-up-the-truck event, since the relatively long B-C leg will have dissipated some of the bullish energy of the nicely impulsive A-B. But I do expect a one-level gain at least, implying a bounce to the red line (p=4461.63).  A trend failure at that point could be fatal, so we'll be on our guard. 

The bullish pattern we used last week to leverage a 1995.00 rally target is still viable, even if there haven't been any pullbacks sufficient to trigger a 'mechanical' buy on the daily chart. That could still occur on a swoon to the green line (x=1934.00), or to the red line, where a somewhat riskier trade would be signaled. More upside to the 1995.00 target is not in doubt, however, given the way the futures punched through p=1954.30 last Monday.  We'll look at other ways to get aboard, so stay tuned to the chat room if you care.

Last week's top occurred an inch from the 25.34 target of a reverse pattern stretching back to July, so I've lowered its point A to June's bottom to produce a new, somewhat higher rally target at 25.74. A further drop to p=24.16, or to x=23.37 could cue up a 'mechanical' buying opportunity, although the latter would be somewhat less risky. The stop-loss for a bid placed at the higher level would be at 23.63, but check for timely guidance in the chat room, since we may be able to cut risk significantly. The predicted move to at least D=25.74 comes with high confidence, given the easy penetration of p=24.16 on the way up. _______ UPDATE (Sep 6, 6:41 p.m.): Now that the futures have come down to the green line (x=23.27), you can use a trigger interval of 28 cents to get long. That implies entry risk of about $1400 per contract, so the trade is advised only for subscribers who can locate the trigger pattern. Based on Wednesday's low at 23.31, the buy signal would come at 23.595, with a partial- profit-taking exit at p=23.875.

Although the futures finished the week with no net gain, price action was encouraging relative to the 38.28 rally target flagged here last week.  The pattern could be setting up for an enticing 'mechanical' buy at the green line (x=34.30), but we'll need to be alert to other opportunities if the pullback doesn't go that far.  I'll mention an even higher target at 38.73 if the one given above is penetrated decisively, especially the first time it's hit. It is derived from sliding the point A low of the reverse pattern down to June 29's 33.95 bottom. ______ UPDATE (Sep 6, 6:51 p.m.): This one is for advanced Pivoteers only, since GDXJ looks like hell. To bottom-fish, use a reverse-pattern trigger on the hourly chart, where a=35.71 on 8/31. 

Talk of production cuts by OPEC and Russia sent crude quotes screaming last week toward the 87.40 target shown. It is all but certain to be achieved, given the easy with which buyers drove the future through the 82.51 midpoint HP resistance. If it's exceeded, the new target would be at 88.14. Considering that soaring pump prices are already threatening to choke off a U.S. economy already headed into certain recession, the energy producers' actions could be construed as hostile. The rally will make a juicy short at some point because lasting rallies are driven by global increases in demand, not by reductions in supply in a punk world economy. _______ UPDATE (Sep 5,  3:20 p.m.):  No one mentioned it in the chat room, but the October contract topped today 7 cents from the 88.14 target boldfaced above. The joke was on me, though, since the actual target would have been 88.11 -- four cents from my target --if I had used the correct point 'C' low. The subsequent sharp pullback could have been worth as much as $1600 per contract, and virtually any reverse-trigger in any time frame would have worked with no problems. _______ UPDATE (Sep 6, 6:55 p.m.): Anyone paying attention?

I let it all hang out in the interview I did Friday with USAWatchdog's Greg Hunter. Do I actually believe the U.S. economy is headed into a condition of barter? Yes, I do.  It will be that bad. And global. Americans in particular will face a long period of severe hardship when these boom times end. That's because the USA is where credit excesses and wealth-effect hubris have been at their most visible and disconcerting. Presumably, the cataclysm required to wreck the banking system would occur in the late stages of a bear market that has always been inevitable. I don't mean to imply that the damage would necessarily take a long time to complete, however. Indeed, it is likely to happen with shocking speed. Imagine it as the collapse of a financial black hole, powered by the implosion of more than $2 quadrillion of  derivatives backed chiefly by gaseous vapor. When the initial rumbling is felt, portfolio managers, including sovereign funds and the biggest investment firms in the world, will urge investors to keep their cool. Some will, at least for a short while. But mounting waves of redemptions will eventually force BlackRock, Fidelity, State Street et al. to dump the shares of clients desperate to raise cash in order to meet margin calls or worse. What Is Your 'Plan C'? Who will the buyers be in this avalanche?  That is a question for which there can be no comforting answer. In the meantime, we should be thinking through what my colleague Charles Hugh Smith refers to as 'Plan C'.  This doesn't mean hunkering down in suburban cul-de-sacs, hoping for the best. Rather, it might require moving to a town or locale with sufficient human and material resources to reduce dependency on distant providers of food, water and energy.

The dollar blew past the 104.03 'D' target of a minor pattern we were watching on the hourly chart, so I've deployed a bigger one with a midpoint Hidden Pivot resistance at 104.65 that looks likely to show more stopping power.  It will have the help of an 'external peak a nickel above that was recorded on May 31, but if both fail to contain the rally, the Matterhorn high at 105.88 on March 8 that I also mentioned here will have a chance. My gut feeling is that a major breakout is imminent. If so, the deflationary implications of a waxing dollar would make it even harder for the quacks who run the central bank to continue tightening.