Rick Ackerman

Bloomberg News, buzzed on Fed Kool-Aid as always, thinks the banksters have engineered a soft landing for deflation. Although it's true that price bubbles in everything from used cars to styrofoam surfboard blanks have begun to detumesce, there is no reason to think the shrinkage will stop when inflation falls to some 'comfortable' level. That's not how deflation works, especially when it is correcting excesses of the biggest financial bubble ever. In residential real estate, the implosion has been mild enough so far that sellers actually seem to think they'll get their price if they wait long enough. Sitting pretty? Only in their dreams. With 30-year fixed mortgages currently averaging 7.5%, many first-time buyers might be starting to wonder whether they will ever own a home. They need little convincing in the meantime that we're in a recession, even if owners of unmortgaged homes priced above $2 million think the U.S. economy is hunky-dory. Muddling Toward a Crash If business merely muddles along in 2023 without slipping deeper into recession, the gap between buyers and sellers can only widen. To the extent this is already happening, we're in the beginning of a silent crash in residential property values. It is particularly deceptive because mortgage-based transactions have dried up, turning price discovery opaque. Incipient deflation is more visible in commercial real estate, with vacancy rates above 15% in Houston (18.9%), Dallas (17.6%), San Francisco (15.5%), Washington (15.2%) and Chicago (15.08%). These figures grossly understate the problem, since many urban centers are slipping into a self-perpetuating spiral of declining tax revenues, decaying public amenities and an exodus of workers to places that are more livable and affordable. Texas, Tennessee, Florida, Arizona and Nevada are among the biggest gainers, California the biggest loser. San Francisco, for all of its natural gifts, could be

AAPL looked like hell last week, stopping out the point 'C' low of a weak bullish pattern, but making little headway on the obligatory bounce.  Desperation will not provide the distribution opportunities its handlers seek, but their one good trick  -- gapping the stock down on the opening in order to exhaust sellers -- hasn't been working lately because shorts are not as easily spooked.  Well below the pattern is a downward sloping, red line. It is the lower trendline of a channel I'd said could contain some big swings in 2023 without allowing a major breakdown or breakout. For your information, the upper channel-line will come in at around 172 this week, the lower at 121.  In theory, that would free the stock to swing wildly over a 51-point range as we enter the new year.

After stumbling out of the gate last Sunday evening, DaBoyz just couldn't get it going. It was two steps up, four steps back all week before they threw in the towel on Friday with exhaustion selling in the final hour. The intraday high had missed p=4029.25 by more than a smidgen, implying more weakness lies ahead. If I'd lowered my expectations at the opening, I might have seen this juicy reverse-pattern short come into focus. Oh well.  If the futures take out last week's lows, I'd wait until they fall to at least 3863, a voodoo number, before attempting to bottom-fish. _______ UPDATE (Dec 12, 9:37): Not a bad trick, getting this hoax to waft 60 points higher with nary a bullish buyer in sight. It was all short-covering, and it failed to surpass even a single 'external' peak. That would require a print above last Monday's 4047 peak. Let's see if bears are sufficiently unnerved to supply the necessary lift. My guess st the moment is yes, although I doubt the rally will breach the next significant external peak, 4119.25. Since we should never have to guess about such things, here's a chart that can not only tell us everything we need to know, but also enable us to profitably trade the move however high it goes.  _____ UPDATE (Dec 13, 10:45 p.m.): What the heck was that all about??? We'd wanted the faked death dive portion of the day to touch our 'mechanical' bid at the green line (4022.44). Although I'd said in the chat room that the six-point gap wasn't close enough to x to do the trade, it would have qualified based on the new, mainly visual standard I am using to judge such opportunities. In any event, the 4245.25 target remains viable as a short-term

The nasty, two-day plunge that ended the week has set up a paradoxically appealing 'mechanical' buy at the green line (x=106.12, stop 104.65).  The best 'mechanical' trades are supposed to look scary, and this one certainly does.  I can't guarantee that a round lot bought with a 106.12 bid will bounce all the way to D=110.49, but I'd say odds of at least a one-level rebound (i.e., to p=107.57) are about 80%. If you've been paper-trading the more frightening 'mechanical' set-ups, I'd suggest that you sit back, relax, and continue to keep score in order to develop enough confidence to trade them with real money.

The tortuous move toward an 1858.20 rally target broached here last week is living up to expectations, sapping bulls' energy with swoons that are being recouped only with a lot of grunting and wheezing.  The target still looks like a good bet to be reached, however, and we should remain open to the possibility that it won't impede buyers for long. If they can close above it for two consecutive days after first touching it, we'd shift our sights up to the next significant Hidden Pivot resistance, 1907.10 (120-min, A=1642.30 on 11/3. _______ UPDATE (Dec 16, 12:35): The Feb contract would trip the second 'mechanical' buy in two weeks if it falls to the green line (x=1776.90), stop 1733.40).  With $17,000 of entry risk on four contracts, this one is recommended only if your 'camouflage' skills are up to snuff. All others should paper-trade the opportunity to learn how it works (or doesn't, occasionally.)

March Silver has risen with more self-assurance than gold recently and lies within easy distance of a 24.32 target that has kept us comfortably on the right side of the trend, even during the 6% selloff that began the week. The target is derived from an ABCD pattern sufficiently clear and compelling to offer a high-odds short. Regardless, bulls should keep their fingers crossed, since an easy move through the target, especially if accompanied by a close above it on the same day, would add to the evidence that September's low at 17.56 was the start of a bull market. Above 24.32, our next price objective would be 25.06 (weekly chart, A= 18.23 on 10/14).

Bulls remain well on-track to hit the 41.17 target of the rABC pattern shown (see inset), powering an ascent that has been too steep to afford us a handhold for a 'mechanical' buy on the daily chart.  A pullback to p=33.49 early in the week would trigger one (with a stop at 30.93), but it would be riskier than bottom-fishing a steeper dive to x=29.64. You can try either, but I am recommending the red-line play only to those with the 'camouflage' chops to cut the theoretical entry risk on four round lots from $1,024 to no more than  $200.

Crude futures can be pretty vicious, but if this were nearly any other vehicle, I'd suggest bottom-fishing D=67.74 with a very tight stop-loss and a truck to hold it all. Given the ease with which sellers crushed the midpoint Hidden Pivot at 75.54, the downtrend is nearly 100% certain to achieve the target. But it's just as likely to put in a tradeable bottom very near there. However, the pattern, although quite serviceable for most other vehicles (other than the p.o.s. grains) is certain to be 'read' by other experienced traders. That means that bids at D are going to get stopped out a few times on the lesser charts before the inevitable reversal takes flight. We are more than up to the challenge, but be prepared to do some work. _____ UPDATE (Dec 12, 10:19 p.m.): Weeks can go by without anyone mentioning crude in the chat room. Is there any interest?  Are any of you trading it? _______ UPDATE (Dec 13, 10:52 p.m.): There appears to be more interest in trading the micro-contract, so I will swap it for the full-size contract starting Sunday. I remain skeptical that this rally will be more than a flash-in-the-pan.

The dollar's weak bounce from p=104.09 implies that still lower prices are likely. Considering that the midpoint pivot lies just beneath a key low at 104.64 recorded back in August, the rally should have been stronger, since many bulls would have been stopped out when the breakdown occurred. We'll monitor the expected breach of the 104.09 Hidden Pivot, since, if it gets crushed, that would portend more slippage to as low as D=100.18. That would represent a still-moderate 12% correction from September's 114.78 high -- not too bad considering the steepness of the rally that saw the Dollar Index rise from 89.21 to 114.78 between early 2021 and October 2022.