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The pattern shown, with a 363.15 rally target that differs slightly from the one we've been using for months, has exuded good karma all the way up. Notice that it triggered two fetching 'mechanical' buys in places where most bulls would have been paralyzed by fright. That's why these trades work, and why we should expect the rally to continue at least to D. As before, we will want to short the bejeezus out of a print at or near that Hidden Pivot, but without letting hubris cloud our judgment concerning whether we've seen The Top. If you butterflied calls a while back, please let me know in the chat room, since they should be coming home to roost shortly. ______ UPDATE (Aug 31, 11:05 p.m.): Although three weeks of patty-cake at p2 has somewhat dimmed our 363.15 lodestar, it hasn't quite snuffed it. A short there is still warranted in any event, but I wouldn't attempt a 'mechanical' buy unless DIA swoons precipitously to the green line. _______ UPDATE (Sep 4): Make that, four weeks of patty-cake at p2. _______ UPDATE (Sep 8, 9:06 p.m.): Bulls ran out of gas trying to stay aloft for yet more gratuitous head-butting of p2. Let's see if bears can seize the advantage by pounding DIA hard ahead of the weekend. If so, it would be behavior we haven't seen in a very long while.

Jackson Hole hubris was operating at full strength last week as investors around the world anxiously awaited the announcement on Friday that would send the markets into hyperdrive. The broad averages had in fact churned impassively for several days ahead of whatever lame twaddle concerning The Tapeworm lay in store. The question of when the Fed will begin to tighten following a loosening binge that has persisted more or less continuously for a hundred years is the focus of portfolio managers' tiny, febrile brains these days. How quickly they forget! For taken together, the last dozen or so Tapeworm utterances, hints and titillations would seem to imply that if tightening is coming at all -- which everyone knows it is not -- it's unlikely to commence before, oh, maybe the end of 2022 or, for good measure, 2023. Vague enough for you? This dovish meme has been recycled so many times that it's a wonder it can still send shares soaring. And yet it does, alternating with fleeting dips of feigned fear and dread whenever the Fed even whispers that it will someday be necessary to bring its surreal balance sheet into a semblance of control. Colloquially this is known as "taking away the punch bowl," an annoyingly dumb cliche coined by a benighted news media to make the somewhat esoteric concept of tightening go down easier with readers who are rightly confused about the bottom line. Getting High in August Still, you have to give the charlatans who manage our expectations their due, since they've riveted investors' attention whenever someone affiliated with the central bank farts, burps or clears his throat. On Friday, Fed Chairman Powell did all three, metaphorically speaking, in promising there would be some tapeworming of monthly bond purchases by  the end of this year. We've

[Editor's note: The following was sent out to clients in mid-July by my friend Doug Behnfield, a financial advisor and senior vice president at Morgan Stanley Wealth Management in Boulder, CO.  Long-time followers of Rick's Picks will be familiar with Doug's work, since his thoughts have appeared here many times. I have always referred to him as not only the smartest investor I know, but one of the smartest guys. He still is, and I am grateful to him for allowing me to share his insights with you. However, I must I must apologize for some formatting changes that were necessary due to typographical limitations on my end. Doug's original letter was meticulously footnoted, and some text that was bullet-pointed I have rendered in paragraph form. Otherwise, the content is unchanged. RA] In all 44 years as a Financial Advisor (aka Account Executive, stockbroker), I have never been aware of any respected stock market pundit that “called the top” in close proximity to the actual beginning of a true Bear Market. However, an associate once gave me a report late in 1987 that had been issued in July, 1987 written by Justin Mamis entitled The Philosophy of Tops. He wrote it just three months before the Crash of October 1987. It has been in my permanent file for decades and I dragged it out a few months ago to remind me how utterly difficult it is to know how high is too high (or how low is too low) in the stock market. After all this experience in the business, I wish I knew, or that I knew someone who knew, on a timely basis. But, alas, it has been too much to ask. That doesn’t mean that I haven’t accumulated a meaningful amount of market wisdom over the years.

[Editor's note: The following was sent out to clients in mid-July by my friend Doug Behnfield, a financial advisor and senior vice president at Morgan Stanley Wealth Management in Boulder, CO.  Long-time followers of Rick's Picks will be familiar with Doug's work, since his thoughts have appeared here many times. I have always referred to him not only as the smartest investor I know, but one of the smartest guys. He still is. I am grateful to him for allowing me to share his insights with you. However, I must I must apologize for some formatting changes that were necessary due to typographical limitations on my end. Doug's original letter was meticulously footnoted, and some text that was bullet-pointed I have rendered in paragraph form. Otherwise, the content is unchanged. RA] In all 44 years as a Financial Advisor (aka Account Executive, stockbroker), I have never been aware of any respected stock market pundit that “called the top” in close proximity to the actual beginning of a true Bear Market. However, an associate once gave me a report late in 1987 that had been issued in July, 1987 written by Justin Mamis entitled The Philosophy of Tops. He wrote it just three months before the Crash of October 1987. It has been in my permanent file for decades and I dragged it out a few months ago to remind me how utterly difficult it is to know how high is too high (or how low is too low) in the stock market. After all this experience in the business, I wish I knew, or that I knew someone who knew, on a timely basis. But, alas, it has been too much to ask. That doesn’t mean that I haven’t accumulated a meaningful amount of market wisdom over the years. As

[Editor's note: The following was sent out to clients in mid-July by my friend Doug Behnfield, a financial advisor and senior vice president at Morgan Stanley Wealth Management in Boulder, CO.  Long-time followers of Rick's Picks will be familiar with Doug's work, since his thoughts have appeared here many times. I have always referred to him not only as the smartest investor I know, but one of the smartest guys. He still is. I am grateful to him for allowing me to share his insights with you. However, I must I must apologize for some formatting changes that were necessary due to typographical limitations on my end. Doug's original letter was meticulously footnoted, and some text that was bullet-pointed I have rendered in paragraph form. Otherwise, the content is unchanged. RA] In all 44 years as a Financial Advisor (aka Account Executive, stockbroker), I have never been aware of any respected stock market pundit that “called the top” in close proximity to the actual beginning of a true Bear Market. However, an associate once gave me a report late in 1987 that had been issued in July, 1987 written by Justin Mamis entitled The Philosophy of Tops. He wrote it just three months before the Crash of October 1987. It has been in my permanent file for decades and I dragged it out a few months ago to remind me how utterly difficult it is to know how high is too high (or how low is too low) in the stock market. After all this experience in the business, I wish I knew, or that I knew someone who knew, on a timely basis. But, alas, it has been too much to ask. That doesn’t mean that I haven’t accumulated a meaningful amount of market wisdom over the years. As

Although there should never have been any doubt bitcoin would make new record highs after shaking out weak hands with a plunge below 30,000, the speed with which it has recovered, eating through thick layers of supply offered up by doubters and losers in thankful retreat, has been breathtaking.  The pattern shown yields a minimum objective of 53,228 and should work nicely for 'mechanical' entries if there's a violent swoon. In any event, we'll monitor price action at the target closely, since an easy push past it on the first attempt would all but guarantee a test of the old high at 64,858.  There is just one place between here and there where we might attempt to get short, but I won't risk queering its magic with an ostentatious drumroll on the home page.  Here's a futures chart, basis the CME September Bitcoin contract, that looks promising for purposes of setting up mechanical entries. A pullback to the green line following two or three more sideways bars would scream 'Buy me!' _______ UPDATE (Aug 26, 10:37 a.m.): Today's nasty swoon missed the green line by a millimeter, but I will suggest canceling the trade. My gut feeling is that the mechanical set-up noted above will still work if Bertie relapses and actually touches 'x', but that it will visit excessive pain on bottom-fishers before BRTI turns around.  Here's the picture.

There is increasing confusion in America about how to handle the rapid spread of Covid’s delta variant. The stock market can usually tell us how much fear is out there, but this time Wall Street seems, if not quite clueless, then certainly heedless. The broad averages have moved steadily higher in recent weeks, caused more by nervous short-covering than by any particular bullishness. There have been no dramatic surges, only a steady, ratcheting ascent that suggests an army of bears have been hard at it, trying to get short at a major top. The irony is that if they would just relax, bull-mania would end overnight, since the rally is drawing its punching power more from buyers driven by desperation than from any other source. With or without them, though, a very important peak is not likely far off. Delta-lockdown worries are bearing down on markets and nearing the red zone as state governors respond with increasingly onerous restrictions on 140 million Americans who have not yet been vaccinated. One-Upping DeBlasio Here in Florida, there are signs that serious trouble could be brewing in the nation’s school systems. In Palm Beach County last week, more than 400 students were quarantined just two days into the school year. Although most of them have not tested positive for Covid, contact tracing has put their school year in limbo. Unfortunately, such turmoil could prove to be a mere squall in comparison to the gathering firestorm in big coastal cities. In New York City, for one, DeBlasio announced last week that the un-vaccinated would be barred from indoor dining, gyms, bars and other places. Not to be outdone, California’s true-blue mayors have already one-upped him with edicts that go even further to restrict movement and commerce. As of Friday, Los Angeles reportedly was considering

Last week's finishing stroke was a fractal clone of schizoid price action traced out over the previous two weeks.  Both exuded the stink of nervous sweat that is symptomatic of unrelieved short-covering. We would surely know, having gotten short ourselves via an rABC pattern that took almost five hours to produce a measly $600 profit. Our hard work was taken as evidence that still higher prices lay in store, as indeed they did. But how long can it go on?  My strong gut feeling is that DaBoyz are getting ready to pull the plug, and soon, after they've extracted the last ounce of buying power from wrong-way bettors. I give this fool's rally another 4-7 days to run , if that long, and would therefore suggest laying in a small inventory of put butterfly spreads well below the market and 6-8 weeks out. You can do this using SPY, keying on strikes at 410 or below. For a more precise handle on immediate prospects, here's your SPY road map (see inset). The stall at p=445.52 could potentially be fatal, but we'll wait for the rally to fail, if it does, before we pass judgment. In the E-Mini S&Ps, a comparable resistance lies at p=4461.25, which also has produced a so-far precise stall. Its associative 'D' target is 4557.50, and any move decisively past p would put this target in play. SPY's 'D' target is 455.05. ______ UPDATE (Aug 16, 4:40 p.m.): Biden's egregious mishandling of our withdrawal from Afghanistan is an appalling preview of how so much else that concerns the nation is about to spin wildly out of control. And yet, the stock market barely flinched and actually closed higher! Rather than go on about how the bull market is under the spell of epic, psychotic delusion, I'll stick

Gold spent last week turning the previous week's plunge into potentially gratuitous mau-mauing of bears by the nefarious forces that control bullion's price action. We'll take a cautious stance, since the rally has occurred off a quite-impulsive down-leg that is shown in the chart. For your peace of mind, I'd suggest being not quite as enthused about the rally as we were frightened by the still-pungent plunge. For the time being, use the pattern shown to avoid getting fooled.  If the point 'C' high eventually migrates above the August 4 'externall' peak at 1835.90, I could warm somewhat to gold's intermediate-term prospects. As always, you should tune to the chat room and your email alerts if you want to stay apprised of timely intraday opportunities.