Rick Ackerman

BRTI triggered a 'mechanical' buy when it fell to the green line at $44,063 earlier this month. I didn't recommend the trade however, because the 'camouflage' set-up we would have used to get long never ripened the way we prefer. Good 'mechanical' opportunities are supposed to feel scary at the time they are signaled, since the best of them usually features a plunge back to the green line that is meant to disembowel bulls who have bought C-D 'follow-through' legs too recklessly. This pattern surely qualifies as a hair-raiser. However, that in itself makes it theoretically appealing, even if not textbook perfect. The C-D leg died in the right place, but the imputed power of the A-B impulse leg was diminished by heavy choppiness near its top.  Even so, I'd rate the trade a '7.4', well above the 7.0 threshold where we tend to go for it.  I see no reason at the moment to go for much of anything, however, since the 'C' low at $28,824 will have become magnetic by now.  ______ UPDATE (Jan 24, 8:58): How cute. The turn from just north of a neon target at 32,134 occurred with no one aboard, but with a lesson to offer: Now we know that Bertie-watchers are so fixated on obvious ABCD patterns that we can't use them anymore. The attractive head-and-shoulders still needs lower lows exceeding $30,000 to look gorgeous. 

With the bull market in an apparent topping process, it will always be insightful to ponder Apple's chart. It offers a window into the minds of money managers, many of whom have staked their careers on the uptrend of just one stock. Some of these guys would be sorely challenged to analyze a game of Chutes and Ladders.  Staying long in AAPL for the last 13 years, however, and robotically adding to positions the entire way up, has required no analytical skills whatsoever, only the hubris to believe the lucrative ride will last forever. But how much more growth can a company already valued at $3 trillion deliver?  This question was bound to trouble portfolio managers eventually, and it would appear that time is now. The first thing to notice in the chart is that the stock recently failed to reach a compelling Hidden Pivot rally target at 187.93 that was flagged here more than a year ago.  It could still be achieved, although the weight of the topping pattern just beneath the target suggests the easy opportunity may be past. Under the best circumstances, chewing through the supply overhang would first require a consolidation at lower levels, then a confidence-building trek up a familiar slope that would take perhaps 4-6 months. This is by no means too much to hope for, but as my friend 'Trader Mike' Schurr always likes to remind me, hope is not a strategy. Bitcoin, AAPL's Cousin I've included a chart of bitcoin that stretches back two years. Bitcoin is AAPL's speculative cousin, the exuberantly irrational side of the bull market. It, too, appears to be in a topping pattern, which I've sketched speculatively as head-and-shoulders formation.  This is fanciful although not farfetched. AAPL arguably was forming a head-and-shoulders itself until last week's plunge destroyed

The chart above suggests that interest rates on 30-year T-bonds could be on their way up to 3.02%, a more than 40% increase over the current 2.11%.  That is not necessarily bad news for investors, since a market adjustment of that magnitude would make it unnecessary for the Fed to tighten.  It would also make it easier for the central bank to sell some of the $8Tr in U.S. debt currently sitting on its books. As the Covid asset bubble has grown to gargantuan size, it has become increasingly clear that the Fed, for all its talk about tapering, has dreaded doing so. It would surely pop the bubble, triggering a bear market in stocks and, quite possibly, a deep economic depression. A Market Adjustment That's why Powell has only talked about tightening credit. However, given the market adjustment this has helped cause, his do-nothing tactic appears to be working. If and when rates achieve 3%, it will give him room to ease. Also, a widening spread between short- and long-term rates will fatten bank profits by tens of billion of dollars. A very small handful of contrarians have been saying the Fed's next move will be to loosen, not tighten. This graph explain why they will be right. From a technical standpoint, the 3.02% target is not a done deal, however. Rates would need to blow past the 'midpoint pivot' at 2.35%, shown in the chart as a red line, to clinch a follow-through to 3.02%.  But by merely surpassing the green line as they have done this month, they have put the 3.02% target in play. From a technical standpoint, it would be a huge blunder for Powell & Co. to tighten now. You can bet they won't.

The S&Ps are in a topping pattern, a middling head-and-shoulders formation with the potential to send the mini-futures down to 4300 once the neckline at 4500 is broken. Presumably, that would be just the first installment of a full-blown bear market.  I seldom pay attention to the H&S because it pops up so often on charts of all time frames, but this one is too shapely to ignore.  As noted here earlier, it will take several more weeks to develop a symmetrical right shoulder. This implies there are at least one or two more dramatic swoons to play out, possibly tradeably. I've added a Hidden Pivot pattern to the chart with two immediate trade possibilities: mechanically shorting a rally to the green line (x=4685.63); or bottom-fishing with a 'camo' bid near p2=4577.88. The latter looks somewhat riskier, and that is why I am suggesting that you use a camouflage entry. Nudge me in the chat room if you're interested.  I am somewhat surprised that the last rally did not quite reach the 4752 trendline where we were eager to get short, but there is not enough evidence to suggest we were front-run. Regardless, let's continue to avoid patterns that are obvious, since every Tom, Dick and Harry is trying to get short at these levels. _______ UPDATE (Jan 18, 10:36 a.m.): The futures have bounced robustly from within two ticks of p2 pivot noted above. This provided an opportunity to get aboard for a quick profit on four contracts of as much as $2,700. Review the chat room discussion beginning with my 9:53 a.m. post to see how the trade unfolded in real time. If you want to learn how to do it yourself, as many subscribers have, you should attend the Wednesday tutorial sessions and immerse yourself in the

Like so many other stocks we follow, AAPL appears to be topping, setting up a plunge that is more than a year overdue.  Because the shares are valued at $3 trillion, and because owning them has been the no-brainer path to success for virtually every money manager on earth, the inevitable takedown is likely to consume years and feature many spectacular bear rallies. That would not be conducive to the kind of butterfly spreading we usually do to leverage big bear moves. However, we're certain to find a way nonetheless, presumably by selling juice at the top of run-ups and by buying distant calls at swing lows. For now, sit back and enjoy the spectacle of portfolio giants getting trapped because there is no one to take them out of the mountainous quantities of AAPL they've been accumulating and hoarding since 2009. ______ UPDATE (Jan 19, 10:30): Bottom-fish the 164.87 target shown in this chart if you know how to cut the entry risk to $0.15 per share.  Using the marquee high at 182.94 would produce a lower target at 162.41, but I just don't have it in me to bend the rules that much, since we would be using a too obvious ABCD pattern without a valid impulse leg.  _______ UPDATE (Jan 20, 7:40): I've put the 'bastard' target at 162.41 in boldface green, not that I enjoy having my arm bent by reality.  

We took an $840 loss shorting four contracts on the rise Friday, learning in the process something we'd already suspected: that this rally is probably going much higher. A titanium Hidden Pivot resistance at 83.87 that had taken five months to achieve showed no discernible resistance, telegraphing the session's strong finish.  Since $100 crude seems fated, we'll focus for now on the smaller, tradeable patterns that will get it there. The one shown would trip a theoretical 'mechanical' buy on a pullback to the green line (x=84.07), but I am not explicitly recommending the trade, since it could occur over the weekend.  If and when buyers punch through p=84.44, we should look for a follow-through to at least 85.18, a place to get short if you've made some bucks on the way up. ______ UPDATE (Jan 17, 9:48 a.m. EST): In the chat room last night two subscribers reported jumping on the trade detailed above. However, since neither said anything about he got aboard, nor about risk management thereupon, I cannot say whether they may have throw caution to the wind.  Here's a chart that shows why the $1,480 profit the trade would have produced at p=84.44 came with almost no pain, since the futures never dipped more than two ticks below the 84.07 entry price. However, they fell in the middle of the night after trading slightly above p, and so the question of how one managed the ongoing risk would determine the amount of the eventual gain. If at least half of the position was exited at p but the rest is STILL held, the net gain is still around $500.  FYI, here's a chart for the March contract with a visually logical target at 88.13. A pullback to the red line (75.09) could be bought 'mechanically' if

The week ended with a very real profit of as much as $8,000 for anyone who followed my explicit instructions. Can we do it again, you ask? Probably, although trading this particular vehicle successfully will always be akin to extracting opportunity from a hacking cough. Our winners are  necessarily leveraged at the tops of disappointing rallies and at the bottoms of gratuitously scary dives. That, after all, is what gold does -- has been doing for years. Between these extremities lies the aforementioned  hacking cough, and although its volatility should make for bountiful trading in theory, it is too much work to concern ourselves with here. The pattern shown has rewarded 'mechanical' buyers twice, but I doubt a third winner will be so easy. Even so, you can use the 'reverse' pattern shown, with an 1873.90 rally target, to plot your strategy or merely assess the strength of the uptrend, such as it is. The bad guys seemingly lack the guts to push the futures below C=1753.00, but I hesitate to use this observation to greenlight any old 'mechanical' buy set-up that comes along. ______ UPDATE (Jan 19, 10:40 p.m. EST): This evening's vertical spike has stalled very precisely at p2=1843.70 of the bullish pattern that has guided us for the last month. A decisive push through it would clinch more upside to the 1873.90 target, but it will be more interesting if this Hidden Pivot gives way easily. That would set up a test of the key 'external' peak at 1922.80 recorded on June 1.

The bull trade explicitly detailed here as last week began could have produced a profit of as much as $9100 with relatively little stress.  And here's more good news:  The tradeable pattern has continued to evolve into one that can probably be used successfully again. For starters, a pullback to the green line (x=22.46) would trigger a very appealing mechanical buy. This gambit will work best for those of you who are familiar with camouflage set-ups, since the straight-up risk from a conventional entry would be around  $10,000 on four contracts.  A short initiated at D=24.01 looks enticing as well, although the obviousness of the pattern could make it a tricky play. The target is a strong bet to be reached, given the way buyers impaled p=22.98 on the first time they came in contract with this 'hidden' resistance. ______ UPDATE (Jan 29, 10:50 p.m.): Buyers speared the 24.01 pivot we were using as a minimum upside target, foreshadowing a test of  November's imposing peak at 25.40. A vast void separates the two levels on the chart, creating a a formidable discomfort zone for us to play with. Stay tuned to the chat room if you're interested.

Bertie has turned leaden, transforming a once-exciting chart into one that might be mistaken for that of a company in the hosiery business. The bitcoin proxy bounced nearly $5000 from within a split hair of a Hidden Pivot at 39,805 that I'd drum-rolled, but the move lost steam last week, portending a possible test of the 39,666 low.  ETHE, a vehicle traded in lieu of this one, looks even worse, having broken the neckline of a head-and-shoulders pattern projecting to as low as $20; it currently trades for around 27.50.  The subsequent rally has been weaker than we might have expected, but we'll give DaBoyz another crack at it this week, since all they've got to do to make bitcoin scream is step away from the offer for a day or two. ______ UPDATE (Jan 20, 7:54 p.m.):  Here's a fresh view with a 37,275.61 downside target. The pattern is sufficiently gnarly that you can expect it to work no matter what your purpose.