Rick Ackerman

AAPL began the week with an impressive rally but couldn't summon enough additional thrust to surpass a key 'external' peak at 177.18 recorded on January 12. This doesn't necessarily mean the stock won't eventually push above the peak and the all-time high at 182.94 notched a week earlier. However, it does suggest that the move will be lacking in power and the new high potentially fleeting. That's as much speculating as we can do at the moment, so let's sit back for a few days and let price action speak for itself. ______ UPDATE (Feb 9, 7:55 p.m.): Bulls have consolidated late January's steep rally and are now ready to take on the record high at 182.94 recorded on January 4.  The pattern shown in this chart is a bullish reverse head-and-shoulders formation, but even if you were oblivious to it, the visual impression it gives is unmistakably positive.

Short-covering extended the stock market's bounce for a second week, but without generating any impulse legs on the daily chart. On balance, bears still appear to hold the edge, mainly because of the steep pitch and power of January's sell-off.  We should give bulls wide berth nonetheless, since the week ended with an earnings blowout at Amazon and a 20-1 stock split for Google shares that will enable the riff-raff to own the stock just like the big boys. Let's greet the new week from the sidelines, until we get a clear sign of where things are headed. _______ UPDATE (Feb 9, 8:24 p.m. EST): Signs this week have been clearly bullish, which suggests that the bear rally, if that's all it is, is doing its job effectively.  If the move achieves new record highs, which looks like no worse than an even bet at the moment, we may be pondering the same question even then: is it for real, or not? Instead of worrying about it or trying to guess how and where a top might occur, we should simply trade with the trend. Nudge me in the chat room if you want further guidance during regular hours.

If bulls are unable to get traction at p2=138.67, more slippage to 136.75 will become likely. We haven't done any bottom-fishing in this vehicle in a long while, but a hit at or very near D=136.75 would warrant it, so stay tuned. We could use call options if the target is actually achieved, but the obviousness of the pattern argues against it. Regardless, a tradeable low is coming soon that could mark a pause in T-Bonds' murderous, two-month slide. My forecast for 3% on the long bond suggests, however, that there would still be more downside to come. ______ UPDATE (Feb 10, 2:21 p.m.): A fall to at least 135.41 is now all but certain, given the initial, decisive breach of p=139.89. I didn't see this initially because my imagination was not quite that bearish at the time. Here's the chart.

The marginally bearish pattern shown here last week obscured a marginally bullish one that put April Gold on a 'mechanical' buy signal. It was triggered a week ago when the futures came down to the green line (x=1785.90). The position would have produced a theoretical profit on four contracts of $12,000 on Friday, when a weak rally touched the red line where partial profit-taking would have been in order. All of this has little to tell us about gold's next move, but we shouldn't expect too much, given the tedium of the last ten months. _______ UPDATE (Feb 9, 8:31 p.m. EST): We can continue to use this pattern to get a precise handle on gold, since the 'mechanical' buy signal it generated two weeks ago is still live and very profitable, at least in theory. The story will become more interesting if bulls blow past D=1875.10, but I wouldn't count too heavily on it. In the meantime, a pullback from p2 to p once the higher pivot is touched could be 'mechanically' tradeable.

The pattern shown offers no good handholds for trading, but it is descriptive nonetheless of a stagnant, frustrating bull market that seems in no hurry to get back in gear.  The so-far eighteen-month correction has produced several lower lows that would have stopped out bulls with no taste for tedium, and left even hard-core bulls wondering whether there mightn't be a better place for their capital. From a technical standpoint, a rally would need to clear the August 4 peak at 26.19 to signal a likely end to the correction. We can accumulate silver nonetheless by averaging down, but I will limit my guidance for now to responding to your ideas and queries in the chat room.

Bertie goosed itself on Friday with rather more brio than we've grown accustomed to, but the move was barely a blip when viewed against the backdrop of its crushing descent from 68,000.  I still expect a relapse to the 29,000 neckline of the developing and still speculative head-and-shoulders pattern we've been monitoring for the last couple of months. This bounce would merit our attention if it pushes above the 44,434 peak (1/13) that sits just above the point 'A' in the chart. ______ UPDATE (Feb 7, 6:33 p.m. EST): Let's give the lunatics their due with an expansive view of the rally, which is bound, at a minimum, for the 46,751 midpoint resistance of this ambitious 'reverse' pattern. We'll be better able to judge whether the move is capable of reaching D=60,525 once we've seen how it interacts with the red line.

AAPL stalled almost to-the-penny at 170.18, the D target of the reverse pattern shown. We might have attempted to get short there if this had occurred in the middle of the day. However, it was not such an appealing play ahead of the weekend, especially with the stock closing on the high tick of the session. The rally to the target in retrospect was all but ordained, given the gap-up opening bar through the midpoint Hidden Pivot at 162.20. The spike also exceeded an external peak from a week ago, generating the kind of impulse leg that almost invariably portends a continuation of the trend. Elsewhere on the page, I've featured a chart that shows the stock rallying to the neckline of a bearish head-and-shoulders pattern. Which picture will prevail? The questions seems likely to be settled this week, since just sitting there is not an option. _______ UPDATE (Jan 31, 8:12 p.m. EST): DaBoyz showed the trading world's hard-core doubters of the bull's invincibility how it's done, effortlessly wafting a $3 trillion stock more than 2% higher on a volume-less Monday morning opening. Just a few more points and their perennially resurgent Phoenix will have the magnetic help of the old record-high at 182 to add imagination's pull to short-covering's push. ______ UPDATE (Feb 2, 8:47 p.m.): DaBoyz are about to let AAPL fall, since the carnage in Facebook and Paypal has made it unnecessary and uneconomical to support King Kong when lower 'reload' prices are guaranteed. 

The tortuous pattern shown should be serviceable for now, although we have come to expect gold's nasty, gratuitous dives to fall short of their 'D' targets -- in this case 1740.00.  The p2 secondary pivot (p2) at 1769.20 is another matter, however, and it should be used to attempt bottom-fishing with a tight stop-loss. Specifically, I'll suggest managing the trade with a reverse pattern where a=1836.80 on 1/25 at 6:00 a.m. EST.  Theoretical entry risk will be around $500 per contract, so this one is not recommended for novices. _______ UPDATE (Feb 4, 8:22 a.m.): Gold's moves in either direction are 100% gratuitous but tradeable nonetheless. Although the April contract failed to dip to the secondary pivot where we'd planned to do some bottom-fishing, the current rally will become 'mechanically' shortable if and when it touches x=1826.60. With about $12,000 of theoretical entry risk on four contracts, this gambit calls for a deft 'camouflage' touch. Here's the chart.

The pattern shown is a civilizational embarrassment, proof that the markets, far from being prescient or even rational, are just a cosmic circle jerk with no real purpose. I won't dignify or otherwise comment on this chart, since it would be akin to predicting a cockroach's next feint as it scuddles across a kitchen floor in search of darkness. Nudge me if something interesting happens. The next move is likely to be up, since bears and those who manipulate silver prices for a living don't have the guts to take out any important lows.