Rick Ackerman

I was expecting the Dollar Index to correct down to 94, but bulls have re-asserted themselves well above those levels. Last week's powerful finishing stroke was yet another body blow for the Fed, which is desperately trying to seem in control of the financial system as the U.S. economy sinks into recession. The strong dollar will further depress the earnings of American multinationals while squeezing the air from every debtor on earth who owes dollars. A strong dollar is the last thing anyone other than OPEC wants (they get paid in dollars, which are better than gold these days, and far better than fleetingly popular rubles), but the market-driven uptrend has grown too powerful to suppress with the usual smoke-and-mirrors tactics.  From a technical standpoint, bulls appear to have clinched more upside to at least 106.49 with Friday's leap past the 103.90 midpoint pivot. We have another outstanding target at 112.14 tied to a much larger pattern.

I've held to a 3.24% target for quite some time based on a highly unorthodox ABCD pattern, but it now looks like rates on the Ten-Year Note will achieve a minimum 3.56% before the uptrend exhausts itself.  This would be congruent with a 108.74 downside projection for TLT, an ETF vehicle that tracks the long bond; it is currently trading for around 113.77.  The implication is that if the housing market is not already imploding with the force of a black hole, it will be soon. ______ UPDATE (June 22,, 8:28 p.m.): Slide 'A' up to the one-off shown and the new target at 35.18 was missed by just 2% -- close enough for us to consider it fulfilled. This assumption would be strengthened if the downtrend overshoots d=30.64 on the hourly chart, where a=34.60 pm 6/16 at 10:20 a.m.

Get AAPL right and you get the stock market right. I've repeated this adage many times, and it has been borne out consistently. However, it is about to be crucially tested as the stock falls to a compelling midpoint Hidden Pivot support (p) at 128.24. We'll have to see how sellers interact with the support before we can judge whether more downside to D=104.74 is likely. However, the A-B impulse leg on the weekly chart (inset) is sufficiently powerful to suggest bears eventually will win this battle, even if it takes 2-3 months to play out. That would represent a 42% haircut for the most valuable stock in the world, and a deflationary juggernaut for portfolio managers' balance sheets.

The ostensibly bullish pattern shown looks primed to fail, but I am featuring it anyway because it looks almost too 'textbook' not to work. Almost. Granted, winning 'mechanical' set-ups are supposed to seem scary when they trigger, but in this case we'll pass up the opportunity and watch from the sidelines. Were so promising a pattern as this to seven out, it would add to the evidence that the bear 's full fury is not yet spent. Nor is it a sign of good health that a downside target at 3850 that had been five months in coming has produced a measly 10% bounce. Here's a chart for the September contract if selling spills into the new week. The downside target is 3708.50, and judging from the way bears crushed the midpoint support on Friday, it will be achieved. ______ UPDATE (Jun 15, 12:24 p.m.): The 3708.50 target caught the exact-to-the-tick low of this week's 200-point avalanche, enabling numerous subscribers to report instant, substantial profits in the Trading Room. The bounce so far has been 55 points, but bulls should be troubled that it wasn't twice that.  We'll give it another day to see if short covering can do what bulls evidently cannot. _______ UPDATE (Jun 16, 10:22 p.m.): Bulls will have a chance to turn things around at p2=3678, but if this feat of engineering fails on a Friday as seems likely, look for more slippage to the 3502.00 target. A tradeable bottom is likely if that target is achieved. 

This will come as scant consolation to long-term investors who have suffered through three months of corrective pain and tedium, but the recent low failed to generate a bearish impulse leg on the weekly chart (see inset). It could still happen, but the implication of a second try would be that bears don't have the conviction to crack 1700. Whatever happens, bullion is just a trade at the moment and nothing more, with a time horizon of perhaps 2-5 days. _______ UPDATE (Jun 13, 10:13 p.m,): Here's a fresh chart with a 1773.70 downside target that is probably the best that bulls can hope for over the near term. A rally to x=1855.30 would trip an enticing 'mechanical' short, stop 1882.60, The trade is recommended for Pivoteers who are proficient with 'camouflage' triggers, since the initial risk on four contracts would be around $12,000 theoretical. ______ UPDATE (Jun 16, 10:32 p.m.): The rally tripped the 'mechanical' short noted above, but I am still recommending the trade only to subscribers proficient with 'camouflage' set-ups.

July Silver tripped a promising short at the green line on May 27 that is showing s small profit.  Friday's swoon did not quite reach the red line (p=21.12) where half the position might have been covered 'by-the-book', but the trade still looks likely to work.  We'll be better able to judge how likely a further fall to D=18.90 is over the next few weeks, but the A-B impulse leg is steep enough to imply the target will be achieved. _____ UPDATE (Jun 16, 10:36): The short could have been covered for a $6600 profit at p=21.37, but if you still hold a partial position, exit now.

As if the thimble-riggers at the Fed didn't have enough to worry about, the dollar turned rabid last week, threatening to transform America's still-undeclared recession into a downturn for the history books. The greenback's rally pushed the price of U.S. goods even higher for foreigners while increasing the cost of fuel that they pay for mostly in dollars. In theory the dollar's strength should have alleviated pain at the pump for U.S. consumers. Unfortunately, however, with the cost of gas and diesel fuel thrusting to mind-numbing new highs each week, the effect has been so muted as to be barely noticeable. Wall Street has noticed the gathering storm, however, and is doing everything possible to distribute stock to the rubes before pulling the plug. Last week, for instance, Amazon was trading down around $110 a share following a 20-for-one stock split. The idea that stock splits are bullish is a pernicious lie that has gained currency because most investors tend to think that more of anything is better. Now widows and pensioners who owned just a few shares of AMZN at $2000-plus per now have twenty times as many shares. How fabulous is that? They naturally expect those shares to rise eventually to their pre-split price, which would not be unusual in a prolonged bull market. But we are quite possibly in a bear market now, and the outcome may not be so felicitous as AMZN's peanut gallery might imagine. Whatever the case, you can count on insiders to unload as much of the stock as they can now that shares have become affordable for the masses.

There's no relief in sight for gas prices that seem headed to at least $10 gallon.  The chart above suggests July crude will likely hit $128 this week or early next, a whopping 7.5% gain over last week's high. But watch out if the futures shred their way past this Hidden Pivot resistance, since that would portend a continuation of the trend to $140, a target first drum-rolled here several weeks ago.  It's a safe bet that Californians will be paying $10 or more for gasoline by then, even if far fewer of them are driving. Realize that it is not consumer demand that has been pushing up prices, or even conspiratorial constraints on supply, but rather a flood of speculative money into energy resources as a hedge against inflation. The irony is that the coming price collapse in crude will be part of a deflationary tsunami that wrecks the banksters' moronic shell game. It will occur simultaneously with a real estate collapse that has already begun. Indeed, bidding wars for homes appear to have ceased due to the steep rise in mortgage rates, record-high prices for homes, a dearth of inventory and a scarcity of qualified buyers. These factors have created perfect conditions for a real estate collapse. No Escape Inflation in energy and real estate are similar in that neither contains an escape hatch for investors. Because energy prices cannot continue to rise without eventually throttling the economy, the rally is doomed. But when prices finally plunge, as they must, that will suck the air from a $2 quadrillion derivatives market that was largely built using energy resources as collateral. The collapse in mortgage-backed securities did the same thing to the banking system in 2007-08. This time, although tens of millions of homeowners are sitting on huge paper

The futures wasted a week of our trading lives screwing the pooch, failing even to trip a 'mechanical' buy at the red line, let alone at the green as we prefer. This implies that Friday's weakness was just noise and that ES remains bound for the 'D' target. I've raised it a tad, to 4309.00, to correct an inscrutable error that I blame, as I am wont to do, on quirks in the Tradestation platform. You can use 4309 as a lodestar for bull trades, since the implied 200 points of upside leaves plenty of room for profit. The pattern looks too obvious, even though it's a reverse ABC, to allow a precise and painless short when D is reached. However, I still like it as a place to attempt shorting, and I would therefore suggest using a 'camo' trigger on the very lesser charts when the time comes. Stay tuned to the chat room and your email 'Notifications' if you would like further guidance on this. Please note that the unexpected swoon to x=3932.88 would trigger an enticing 'mechanical' buy, stop 3807.00. ______ UPDATE (June 6, 5:21 p.m.): Cancel the trade, since there's not much swooning going on. It could be distribution, actually, and there's no point in exposing ourselves to it. _______ UPDATE (Jun 10, 12:13 a.m.): A drop to the green line (x=3932.88) would trigger a 'mechanical' buy, stop 3807.00. I am not recommending the trade, however, even executed with 'camouflage', because of how sickly the futures looked all week. Ahead of the weekend we should be doubly cautious.