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The U.S. dollar took a massive hit in stride following last week's announcement of a $6 trillion bailout package. The news caused the greenback as measured by the Dollar Index (DXY) to fall by just a few points from recent highs. The dollar's seemingly inexplicable strength is a harbinger of the catastrophic debt deflation I've been warning about for many years, since it will increase the real burden of debt on all who owe dollars.  It also shows how the dollar can be subject to short-covering pressure capable of pushing its value far above any logical threshold, even when the Fed is practically giving away dollars to the rest of the world. Let me explain. At present, exceptionally strong demand for dollars is being driven in significant part by liquidity issues originating in Japanese financial markets. Like all central banks, the Bank of Japan has usurped the role of debt markets in order to create a nearly unlimited supply of money to prop up the economy. One way it force-feeds yen into the system is by buying Japanese government bonds held by dealers. Dealers have been reluctant to sell lately, however, because they need the bonds to collateralize short-term borrowing in U.S. repo markets. They are more eager than ever to borrow dollars because the Fed has made them so cheap. 'Opportunity Moves to Size' The Fed's intention in backstopping global markets with an effective $4 trillion credit line, in addition to a $2 trillion consumer stimulus, was to avoid a run on financial markets. Instead, the banksters may be about to discover that they have stimulated infinite demand for U.S. dollars. I once wrote about this in the context of my experience as a floor trader. One might think that if, say, IBM shares were trading in 50,000-share blocks,

Just so you know, the biggest rally since 1933 has yet to surpass even a single 'external' peak on the hourly chart. For that reason, I'll reserve my enthusiasm for the time being -- especially since we know that the purpose of bear rallies is to fool us into believing they are the real McCoy. Did today's wild-eyed buying ignore the reality that grave uncertainties will continue to hang over the economy for the foreseeable future? Of course it did. Did Trump's optimism go over-the-top when he circled April 12, Easter, as the goal for loosening the lockdown on commerce? For sure. As it happened, just minutes before he spoke, the World Health Organization was predicting America will be the scene of the next big outbreak. Don't think I am going to get in the way of this speeding locomotive, though, no sirree.  But I will remain skeptical as long as my stock charts fail to confirm such unwarranted exuberance as we saw today. As I keep reminding you, it's all about impulse legs, and I will continue to look at ABC patterns in ES and other trading vehicles as though they were formed from inconsequential, one-minute price bars. They are all the same to me. For now, that means buyers will need to push this brick past past 2542.75, an 'external' peak that I've labeled in the chart. Also, I cannot simply overlook the fact that the recent lows shredded a clear and very important downside target at 2206.75. Some chartists would say this Hidden Pivot support held, albeit barely. In my estimation it didn't, and the 1956.25 downside target given here earlier will therefore remain theoretically valid until such time as C=2697.25 is exceeded to the upside. Until that happens, forgive me for not being excited. Isn't that

To My Readers: I have sent the following note to Sean Hannity, Rush Limbaugh and Holman Jenkins of the WSJ Journal. It is a MUCH better idea than squandering $2 trillion sending out checks to...EVERYBODY. Here is what the President needs to do. Forward this to your Congressman if you agree: President Trump needs to mobilize the Army to set up Civil Conservation Corps/WPA-type work camps to rebuild America. Virus-test each recruit who shows up, train them, then put them to work. The mobilization would be similar to the WWII effort, when crash courses turned no-nothings into navigators, bombardiers and radiomen in mere weeks/months. Taxpayers would be getting a much better value for their $2 Tr than sending checks/debit cards out to every household. This would be a huge political winner for the President, but also for America. Everyone has talked about rebuilding America’s infrastructure, but this is a great opportunity to actually do it. Sincerely, Rick Ackerman

The pros who confidently bought the dips for more than a decade are now quietly selling the rallies. During the bull market, accumulating stocks on weakness was a no-brainer, as easy a ticket to big profits as investors will ever enjoy. But the bear market has ended this rare opportunity. Instead, the Masters of the Universe have been unloading as much stock as they can into every rally. This tactic was clear on Friday in the wee hours, when shares rose sharply on gaseous volume while most of us were sleeping. The intent to distribute was so obvious that Rick's Picks put out a recommendation at 5:34 a.m. to short the E-Mini S&Ps. (Here's the actual post in the Trading Room. The futures subsequently fell more than 200 points.) Only a few subscribers were able to take advantage of this guidance, however, because of the ungodly hour. Get used to it. Short-squeeze spikes tend to occur at times that are either inconvenient or intimidating to most traders: on Sunday nights; in the final hour on Friday; on the opening bar of day sessions. Rinse and repeat. How to Recognize Distribution Distribution is the name of the game these days, and you will need to understand how it works if you want to survive the bear market. We saw a sustained example of it in Boeing [BA] when shares held above $300 for an entire year while scandal engulfed the company. After deftly unloading as much BA as possible during that time, DaBoyz pulled the plug and the stock plummeted to $90 just ahead of the pandemic selloff.  Equally adroit was the outwardly gentle distribution of U.S. shares that occurred in early February. You may recall that the stock market hovered defiantly aloft for weeks, even as coronavirus stories out of

I am recommending bottom-fishing if AAPL gets within a 10-15 cents of the 223.93 target shown in the chart. Buy two options expiring March 27 at the lowest out-of-the-money strike at which calls are priced under 1.00. This trade is suitable for rookies because the target, which comes from a gnarly pattern that is just my style, looks likely to work precisely. You can interpolate my instructions, perhaps increasing the size of the bet, if you know what you are doing. Check back before Monday's opening in any event, since I might be able to refine my instructions. That is impossible now, since Tradestation is not currently showing Friday's closing bid/ask data for AAPL options. I have not made the 223.90 price target publicly viewable, but be aware that moles from Goldman, Morgan Stanley et al. seem to be aware of them and could front-run us. _______ UPDATE (Mar 23, 9:15 a.m.): Better get used to it. AAPL popped a $17 rally from 221.25 that would have offered an excellent bottom-fishing opportunity -- except that the low occurred at 4:30 a.m., and the move was over by 8:30, an hour before options open. Trend and target, as you will have observed, are as easy to nail as shooting fish in a barrel, but we can only make money on them if they occur at the 'correct' time of day. There will be other opportunities. ______ UPDATE (Mar 23, 5:46 p.m.): AAPL relapsed to a target that worked even more precisely for bottom-fishing. With apologies, here's the chart that I mistakenly thought I'd posted in the Trading Room in timely fashion. Under ordinary circumstances, the precise completion of a pattern that has taken more than two weeks to play out would augur a strong bounce lasting at least 2-3 days. We

For all of last week's violent price swings, the April contract appears to be basing above 1450. The 1407.30 downside target remains viable nonetheless, and the futures did in fact trigger a 'mechanical' short to that number on Friday at 1517.60 (240-min, A=1597.90 on 3/13).  Looking at a much bigger picture, the chart (inset) stretches back a decade in order to put the bull cycle begun in 2016 in a useful perspective.  You don't need to be a technician to see that the $260 surge begun last November, encouraging though it was, fell well shy of the moon shot that would have signaled much higher prices. Specifically, the upthrust failed to generate a strong impulse leg on the weekly chart when it died well shy of the key peak at 1794 recorded in 2012. That doesn't necessarily mean the high won't eventually be exceeded, only that it could take quite a while -- meaning years -- for it to happen. I am not ruling out a spectacular bounce shortly from somewhere above 1400, but if there is instead a protracted rally, even a strong, steady one, its potential would likely be limited. _______ UPDATE (Mar 23, 5:57 p.m. EDT): Gold's biggest rally in recent memory failed to exceed even a single 'external' peak on the hourly chart. The nearest lies at 1574.80, about $5 above today's high, but we'll reserve judgment about the health of the uptrend until we've seen a little more of it.

The U.S. dollar has been one of the few big market winners lately, but this is hardly a good thing. If the greenback continues to strengthen, it will hurt U.S. multinationals whose overseas revenues are reckoned in currencies that would be falling. In addition, all who owe will need to repay their loans in dollars more dear than when they were borrowed.  And it will sink prices for a broad variety of commodities, particular crude oil, that have been used to collateralize a super-leveraged derivatives market worth perhaps $1.5 quadrillion notional. Do you see the problem? Throughout its 25-year history, Rick's Picks and its predecessor, Black Box Forecasts, have never wavered in their bullish outlook for the dollar. In recent years, our projection for the Dollar Index (DXY), currently trading around 101, has called for a test of highs near 120 recorded in 2002. When DXY slid to 71 between 2002-08, we saw this as merely corrective. What a Fool Believes Our outlook for the dollar is congruent with the deflationary bust we foresee puncturing the outsize asset bubble created by the central banks over the last 40 years. Residential real estate is a big piece of it, and you can imagine for yourself whether mortgage lenders will ultimately allow homeowners to pay off their loans with a few hundred-thousand-dollar bills peeled from their overstuffed billfolds. This is just one of many reasons why a hyperinflation is not coming. Set against them is the entrenched belief that the Fed would never let deflation happen. Well, on Tuesday, the dollar, along with the real burden of debt, soared despite the fact that President Trump was offering up a trillion dollar stimulus package in an attempt to offset economic damage from the pandemic. Ordinarily we would have expected the dollar to reel

[Note: This commentary now strikes me as having been w-a-a-a-y too bullish. Some important things have changed since I published it. For one, the $1 trillion+ stimulus package is already a transparent failure -- not just psychologically, but of political leadership. Does anyone -- other than eggheads and some politicians -- actually think it will stimulate anything? Absolutely not. And there is this: Spring-break revelers have introduced grave uncertainties that will persist for at least another four to six weeks, until we can be sure they have not jump-started a contagion that the nation has paid an extremely high price to suppress. The stock market cannot possibly sustain a rally under the weight of such anxieties. RA] If you're feeling depressed because your retirement fund has been cut in half by the Covid-19 avalanche on Wall Street, take heart because you may have a good chance to get it back. Yeah, I know, I wrote here only last week that the bear market would stretch on for years, bankrupting us all and ushering in the Second Great Depression. But watching the spectacular collapse of Boeing shares has made me more of an optimist. The stock has plummeted from $350 to $129 in a little more than a month, wiping out more than $150 billion of capitalization. It is the swiftness of Boeing's fall that I find most encouraging, since this could have happened only if the stock's canny institutional sponsors wanted it to happen. Why on earth would they? Simply because they are quite confident they eventually will recoup their investments -- and perhaps even a little something more for their pain and trouble. Throwing the Switch And I don't mean to imply that it will take years or even months for them to get back to flush. More like

It feels odd to be characterizing Friday's 2000-point rally in the Dow Industrials as "just noise," but that's what it was. It's a safe bet that almost none of the buying was driven by optimism about how pandemic news would play out over the weekend. Who could predict such a thing? Uncertainty reins, and the only thing that seems certain at this point is that the normal flow of life and business in the U.S. and around the world will face more disruptions than anyone could have imagined even a week ago. We look to the news media to make sense of it all, but those who write about such world-shaking events as have occurred recently often seem as confused as the rest of us. On Friday afternoon, for instance, when the Dow Average closed with its biggest gain ever, most of it achieved in less than an hour, the Wall Street Journal headlined its digital front page with this unintentionally wacky mash-up:  Stocks Soar as Trump Declares National Emergency. Linking these two events sounds preposterous, doesn't it? The editors must have thought so too, since the headline was quickly changed to: Stocks Rise Sharply as Haywire Week Wraps Up. A Fatal Disease Haywire would be an understatement, for it was the craziest, most volatile week in stock-market history. That's because machines are doing nearly all of the trading these days, and the algorithms that instruct them are programmed to detect and exploit the stock market's every cough, sneeze, hiccup or belch before any living thing feels even a slight tremor. It was bad enough when short-covering humans with hair-trigger reflexes could cause stocks to soar for little or no reason. But when ten thousand thinking machines are set against each other to accomplish the same thing, except profitably, the