Rick Ackerman

Although I am on a busman's holiday and will not resume publishing The Morning Line until Sep 17, here's a timely note concerning AAPL. We've been using a 151.38 downside target that remains viable, but I expect the stock to go much lower in the months and years ahead -- well beneath $100, that is. When the company announced a week ago that iPhone sales were holding up pretty well, it was a clarion call to short the bejeezus out of the stock. Apple was alway going to be more vulnerable than most retailers to an economic downturn, and that downturn has finally arrived. A key market for the company's pricey, over-camera'd cell phones is Europe, which is headed into deep recession. The one-decision chimps of the portfolio world who have ensured AAPL's steady rise over the years are not going to go quietly into the night, however. They'll have their hands full distributing the biggest-cap stock ever to the rubes in a process that will take years. AAPL remains the key bellwether for the stock market as a whole, and it is the only stock one need get right to get the market right. The bear market will still be tricky to play, though, since everyone knows by now that we are in one. Wall Street's shameless shills, particularly the clueless, lazy hacks in the news media, will be talking up the resumption of the bull market each and every day until the Dow falls below 10,000. But if you can contrive to tune out their blather, you'll have a better chance of getting through the nation's slide into darkness without losing eveything,  Here's a link to my interview on Friday with Jim Goddard of Howe Street. (Also interviewed  for This Week in Money were Doug Casey and Ross

The futures were freefalling to the 4032.50 target shown when the closing bell left them a split-hair shy of it.  Look for a tradeable turn from the pivot, although not necessarily an enduring one. Sliding point 'A' a step higher yields a slightly lower target at 4022.75 that might also work for bottom-fishing. As always, a decisive move through either of these 'hidden' supports on first contact would suggest the trend is likely to persist, even if there's an intervening bounce. The selloff damaged the intraday charts, but because it was tied ostensibly to news, there is no reason to think it will continue for much longer. ________ UPDATE (Aug 30, 4:45 p.m.): Sellers spent the entire day frolicking at p=3967.50 of this pattern, with a 3862.25 downside target. They'll need to crack p to drive this brick lower, but the pattern should continue to work unless stopped out above C. _______ UPDATE (Sep 1, 11:15 p.m. ET): One subscriber reported shorting this brick at 3967.50, per my 10:34 chat room instruction. The 4001.75 stop-loss advised implies entry risk of $6800 on four contracts, but you'll be on your own in any event. ________ UPDATE (Sep 2, 9:04 a.m.):  The trade was stopped out by a lunatic leap ahead of the bell to 4002.00. Cool trick, wasn't it?

AAPL was overdue for a drubbing, especially since the stock could not have continued to hover in outer space when the broad averages finally got hit.  Nor is there any compelling reason for the portfolio chimps who live off AAPL to put much effort into holding it aloft while other stocks continue to correct. You can see that a seemingly nasty fall to $150 would not change the menancingly bullish look of the chart or the likelihood of new record highs.  Most immediately, there's a 162.40 downside target we can use as a minimum projection over the near term (30-min, A=174.90 on 8/18). ________ UPDATE (Aug 30, 5:06 p.m.): The bearish pattern shown in this chart, with a 151,15 downside target, is all we've got to work with at the moment, The impulse leg is not legitimate and the C-D leg has yet to touch p, but we'll give the pattern the benefit of the doubt as AAPL continues to make its way lower. Apple says iPhone sales are holding up fairly well, but with Europe headed into a possible economic depression, the market for overpriced/over-featured cell phones is about to crash along with consumer spending. ________ UPDATE (Aug 31, 11:40 p.m.): This chart revises the quite bearish target slightly upward to 151.38. Today's low just pennies from p=157.00 says the pattern is working and will yield good odds for trading its levels 'mechanically'. ________ UPDATE (Sep 3, 10:32 a.m.): 'Good odds', indeed! A straight-up  'mechanical' short at the green line would have produced an intraday profit of as much as $486 per round lot. The 151.38 target remains viable as a minimum downside objective for the near term. ______ UPDATE (Sep 7, 9:30 p.m.): My  newly bullish outlook for the E-Mini S&Ps contrasts sharply with a still-bearish forecast for AAPL. I'll be

The futures did nothing last week to earn the somewhat ambitious bullish pattern shown. The 1985.40 target is theoretically viable because the green line was tagged, but the follow-through failed to reach p=1840.80, which is what we should expect at a minimum if this brick is going to have a shot at 1985.40. The selloffs have lacked vigor as well, so don't be surprised if the Decembe contract spends the next 2-3 weeks screwing the pooch. My moderate bias calls for a marginal breakdown below C=1696.1. _______ UPDATE (Sep 3, 10:38 a.m.): The 'C' low at 1696.10 held, albeit barely, but I do not trust a bounce coming from such an obvious place. Brace for a relapse, and don't get your hopes too high unless this dog vaults p=1840.80 (see inset). _______ UPDATE (Sep 7, 9:35 pm.): I'll lower the bar for this dog, stipulating that it must leap to 1758.00 to turn the hourly chart unambiguously bullish. That would exceded a key 'external' peak recorded on August 29. _______ UPDATE (Sep 8, 10:36 p.m.): The lowered bar (see previous update) was too high, since today's mere head-fake created a bullish impulse leg that cannot be ignored. Depending on how buyers handle p=1729.60, we'll be able to judge the odds of further upside to D=1745.50 or higher.

There is little to encourage in the daily chart (see inset), so perhaps contrarians should take heart? We'll continue to use downside targets at 17.37 and 16.22, although a tradeable turn from p2=18.19 his week is certainly possible (daily, A=21.57 on 6/27).  If you'd prefer to be on a hair-trigger for the very first sign of life, set a screen alert at 19.89. A print there would generate a bullish impulse leg on the daily chart, exceeding an 'external' peak recorded August 18 on the way down. _______ UPDATE (Sep 3, 10:51 a.m.): The futures have bounced from within a hair of the 17.31 target shown in this chart, but don't get your hopes too high. _______ UPDATE (Sep 8, 10:03 p.m.):  The criminally engineered swoon on the opening triggered an unrecommended 'mechanical' buy at the red line, implying that more upside to D=18.81 is a done deal. More bullish still would be an easy move through it on first contact.

The pattern we've been using for several weeks, with a still unmet 109.09 downside target, is clear and compelling, implying that this sharp bounce from well north of it is not destined for greatness. Even so, we'll give the rally the benefit of the doubt, especially if it should continue on up to 116.75, where a distinctive 'external' peak made two weeks ago on the way down cries out to be tested. Please note that a print at p=114.89 would trigger a so-so 'mechanical' short, stop 116.82, and that if the trde were to get stopped out, TLT would have an even-odds chance of breaking out above C=120.69 of the bearish pattern. _______ UPDATE (Sep 1, 11:10 p.m. EDT): TLT has bounced tentatively from within a hair of the 109.09 target, so there's a good chance the rally could get legs. _______ UPDATE (Sep 7, 12:20 a.m.): The way sellers have crushed a 109.09 'hidden' support with barely a bounce suggests TLT is headed significantly lower. A test of 100 seems almost too obvious to consider, but I'll have a closer look as soon as I am able to access Tradestation.

Last week's rally could provide a crucial test for my bearish outlook, since it triggered an attractive 'mechanical' short at the green line after bouncing from a low in the pattern's sweet spot.  The theoretical position was slightly profitable at the bell, but we are paper trading it in any event because the entry risk is about $22,000 on four contracts.  To qualify the word 'attractive', it implies that a short from 94.24 has a better than 50% chance of producing a profit by falling to p=88.75, at least, before popping above C=99.75 to stop out the position. ________ UPDATE (Aug 31, 11:50 p.m.): So far so good. The futures produced a $22,000 profit on the paper trade with today's dive to p=88.75. Assuming half the position has been covered, let's shoot for p2= 83.25  on the third of four contracts shorted. Note the D target at 77.75, which, as noted here earlier, would imply pump prices below $3 gallon. _______ UPDATE (Sep 1, 11:24 p.m.): Use a stop-loss at 91.43 for the two contracts that remain. This should be worked o-c-o with an order to cover one contracts at p2=83.25. _______ UPDATE (Sep 7, 10:16 p.m.): The trade has been a monster, producing one of the biggest gains ever for an explictly actionable tout.  The trend forecast itself went sharply against the crowd, with an extremely bearish forecast at a time when most other seers were expecting a run-up to above $100. That said, there has been almost no discussion of the trade, or even of crude oil, in the tradng room, so NYMEX futures will be eliminated from the core list of touts. However, I will still provide coverage of this vehicle and energy proxies on-demand in the trading room. 

[The Morning Line commentary will resume on Sunday, September 17, to allow your editor a holiday break.  In the interim I will continue to update 'touts' and to post in the Rick's Picks trading room as usual. RA]    The way stocks plummeted on Friday, one could almost believe that Fed blatherer-in-chief Jerome Powell made it happen.  We know better; for in fact, the selloff was caused by mysterious cyclical forces that were set in motion billions of years before Powell was born. Go ahead and try to prove the negative if you want, but that's how it works. Markets create the news, not the other way around.  Count on Rick's Picks to ignore the headlines and tell it like it is, always disrespecting Fed quackery.  The only thing the charlatans who run the central bank have caused to happen since they willed themsleves into existence nearly 110 years ago is the destruction of the dollar.   Whatever you think about the Fed, a far more important concern is whether Friday's thousand-point avalanche in the Dow ended what has so far been a tedious, garden-variety bear-market rally. Athough it would seem so, the correct answer is no, it didn't.  How do we know this?  For starters, Jim Cramer supposedly said so on his show -- said, that is, that the June low will stand, presumably till the end of time. He is certain to be wrong about this eventually, but in the meantime, technical signs say higher prices are indeed coming. The bear rally technically has further to go because Friday's plunge followed on the heels of a 15% rally that had exceeded several important peaks on the daily chart. The implication is  that the current selloff is merely corrective in the context of a bigger bear rally yet to

Although sellers finally hit, and then pulped, the recalcitrant 4245 target, I've used a visually obvious and conservative 'reverse' pattern (inset) to project at least moderate additional downside over the near term to D=4129.26. The pattern looks enticing for 'mechanical' shorting on the way down, but p2=4178.81 would be a worthwhile spot nonetheless to attempt scalping what could prove to be a fleetingly tradeable low. If the HP levels give way easily, however, suggesting the correction will be nastier than some might expect, we'll shift our sights to this larger rABC, where D=3775.50.  That would be a major breakdown, but you still shouldn't pass up a chance to play for a bounce, even if 'against the box' with options, at p=4051.50. That well-hidden support would become my minimum downside projection if 4129.26 gives way easily. ______ UPDATE (Aug 22, 8:54 p.m.): The futures plunged to within an ansgstrom of the 4129.26 target I'd flagged as my minimum.  What's next? Reply hazy, try again later. _______ UPDATE (Aug 24, 6:56 p.m.): Here's a modest rally target at 4189.25 you can use for now. Notice how Mr Market cheated 'mechanical' bids at the green line out of an easy winner. Don't expect more kindness if the trade sets up a second time. ______ UPDATE (Aug 25, 11:02):  ES is moving with high predictability, having topped in the dead of night just beneath my 4189.25 target.  Then, as expected of Mr Market, following a sharp pullback from the 'mechanical'-trade sweet spot, ES trampolined from a few points above x to deny easy entry for a second time.  It doesn't know we are there, it just comes naturally.