Rick Ackerman

The pennant  formation shown is building a base for June Crude to pop to as high as 146.42. This seems incredible and goes against the grain of my recent forecasts, which have implied that crude topped at $121 in March. Even so, I'm forced to consider the possibility of a powerful upthrust, based on the purely technical evidence in the chart. Such a move would not likely be caused by a surge in the global economy, which appears headed toward deep recession. It would also be bucking deflationary headwinds that will continue to mount as higher interest rates crush borrowers.  The only way crude could get to $146 is with a massive disruption of the distribution chain such as war might cause. Is the chart predicting a geopolitical conflagration?  So it would seem.

AAPL, the crown jewel of the institutional investment world, has lost more than 20% of its value since January. Last week it signaled still lower lows down the road when it deeply pierced a case-hardened floor of Hidden Pivot support at 146.77. But how far down the road? My hunch is that last week's bounce on Thursday from a bombed-out bottom at 138.80 will prove to be the start of the most powerful short-squeeze since January. As such, and according to design, it will devastate bears who have grown complacent betting against the biggest portfolio managers in the world. The fact that the squeeze began off a bottom on Thursday, giving the stock a running start for a psychotic leap into freaky Friday (the 13th, no less), is evidence that DaBoyz are taking no chances. They do not want this rally to flame out quickly like all the others that nipped at shorts' privates in April. The stock will still need to take quite a leap, to 156.75, merely to generate an impulsive leg on the hourly chart. Expect DaBoyz to succeed at this project -- the earlier in the week the better for them. _______ UPDATE (May 18, 6:34 p.m.): The small dip below the red line has shortened the odds of a further fall to D=131.81 of this pattern. Also, a rally to x=145.27 would trigger a 'mechanical' short, stop 149.76. Check the chat room for for timely guidance, since the appeal of this trade will depend on how and what time of day 'x' is hit.

Friday's bear rally was not particularly impressive, and we could probably write it off had it occurred on any other day of the week. But because it left shorts bleeding on the ropes ahead of the weekend, they are likely to provide buoyancy when index futures resume trading late Sunday afternoon.  The three labeled peaks will pose an immediate challenge, but we should expect them to give way if there is no particularly unsettling news over the weekend. If you or I were the criminal masterminds who rig the markets, this is how we would set things up to maximize the power of short-covering and other buying behavior related to the calendar. Short-covering rallies are engineered to achieve heights that mere bullish buying never could, and that's why we we should expect the rally to continue.  For now, use the 4102.00 'D' target of this reverse pattern as a minimum upside objective. The Hidden Pivot levels can also be used for 'mechanical' entries or to get short at D. If it's easily exceeded, bears may be facing a tough week. ______ UPDATE (May 16, 5:35 p.m.): Buyers went nowhere, but that was impressive, given the quickening drumbeat of news concerning the implosion of China's economy.  Use this pattern, a slightly evolved version of the one above, with a 4102.00 rally target. _______ UPDATE (May 18, 1:15 p.m.): Minor downside targets have supported only feeble bounces so far (see my 10:06 rec in the Trading Room), but the p midpoint of this pattern will likely work better. Today's decisive move below 'x' implies that 'p' is all but certain to be reached. I am not publishing the actual price associated with p to avoid making it too visible._______ UPDATE (May 18, 6:12 p.m.): Here's my third correction of the bearish pattern, with a

TLT has taken a promising but still-fragile bounce from the 112.31 secondary Hidden Pivot of the pattern shown. When reversals occur at p2, they sometimes continue in the same direction, eventually stopping out the pattern with a move through 'c' -- in this case 123.03.  This dynamic is called 'Matt's Curse', named for the subscriber who first observed it, and in this case the implications are bullish. The rally would become less tentative with a pop above  the 'external' peak at 119.31 recorded on May 3. ______ UPDATE (May 24, 10:05 p.m.): The short-squeeze gap on the opening kept the rally alive by generating a fresh impulse leg on the daily chart, albeit by a hair. The next thrust must exceed 120.35 to keep the elevated mood stoked.

There's a Hidden Pivot support at 1757.40 to break gold's steepening fall, but then what?  A tradeable low seems very likely to occur there, or somewhat lower near one of several 'external' lows that stairstep down to 1704.30. The downtrend could even end with Friday's 1797.20 low, the pattern's 'secondary' pivot, but I wouldn't count on it. The futures are certain to be volatile and therefore tradeable while they carve out a bottom, but opportunities will necessarily be labor-intensive and short-lived.

Silver's interminable dirge might not reverse until it falls to 19.20, the 'D' target of the pattern shown. Although it's possible the turn could come from as high as p2=20.23, that seems unlikely because of the relentless downward ratcheting that has characterized this mini-bear move. Initial price action at p=21.27 suggests that if and when the July contract comes down to 19.20, it will be possible to bottom-fish there with a very tight stop-loss. 'Mechanical' shorting opportunities may materialize in the meantime, but so far none of the rallies has been strong enough to set up the trade.

Use the 14,751 target as a maximum downside objective for the next few weeks. If Bertie gets there, that would represent a nearly 80% plunge from November's all-time high at 69,000. I regard the target as likely to be achieved, given the way sellers sliced through p=31,434 last week. The secondary pivot at 23,092 can be bottom-fished nonetheless, provided you've made money on the way down and know how to limit risk.

We've had four months to observe and analyze the bear market that began a single tick off January 4's record high. What might be said about it so far?  Mainly that it has been far kinder and gentler than we should expect. Realize that the biggest financial bubble in U.S. history has popped. Although this is becoming increasingly obvious, you can be certain investors are waiting to jump back in at the subtlest sign of a bottom. Their brokers and financial advisors will be the first to spot this bottom, along with a dozen more as the broad averages work their way toward the deepest bottom imaginable In the meantime, the little guys reportedly have been shifting their capital into money market funds, although not at a pace that has spiked redemptions at Vanguard, Black Rock, State Street and a few other biggies that for 13 years made the bull market seem unstoppable. At some point the Leviathans will necessarily turn seller as their customers dive out of shares. It is impossible to say when this climactic phase of the bear market will begin or how long it will take to run its course. Much sooner than we might expect, and with blitzkrieg speed, are two possibilities for which we must be prepared. What is certain in any event is that when Vanguard, Berkshire, Fidelity, Black Rock et al. are forced to dump their crown jewel AAPL, the little guys will not be stepping in to support it at $100, or $80, or $60, or even $20. In the extremely unlikely event they are in a buying mood as the Mother of All Dips seeks a bottom, their ammo will be gone, deflated into hyperspace by ruinous asset deflation. The Lomcevak More immediately, however, we should view last week's sharp

With long-term rates closing like a missile on my 3.24% target for the U.S. Ten-Year Note, I was compelled to double-check my math. The chart not only confirms the validity of the target, it offers a bigger-picture perspective on an ABCD pattern that is as gnarly as it is compelling. I'd previously used a daily chart to project an identical target, but the fact that the same persuasive, rules-based elements are present on the weekly chart makes 3.24% the number to watch. It is not short-able with the usual precision because its stopping power will be conflated with that of a top made in the same place in October 2018.  I have more to say about this in this week's Morning Line commentary, so check it out if your curious about what a top in Treasury rates could mean for the U.S. economy. _______ UPDATE (May 24, 10:14 p.m. EDT): A slight breach of the 2.72% low recorded on April 26 corresponds to TLT's inverse poke above a small 'external' peak recorded around the same time. Have interests rate seen their high? It's possible, but the evidence is not yet decisive. It would imply that the recession that began months ago -- the one Goldman's resident genius said a few weeks ago had a 15% chance of occurring within the next 12 months -- is beginning to deepen.  Here's the chart.