Rick’s Picks

Bertie is working on a promising bullish impulse leg, but not outperforming the market as it used to do so effortlessly. The chart I've linked is ostensibly bullish, inferring as it does a massive head-and-shoulders pattern that looks like it will be hard to disrupt. Regardless, this vehicle is just a trade at the moment, so you'll need to nudge me in the chat room if you see any opportunities you'd like vetted.  Notice that sellers could push down to as low as 29,000 without much affecting the constructive look of the big picture.

TLT has bounced from a place that is obvious only to us -- the swaddling bosom, as it were, of a visually defined 'discomfort zone'.  That means the rally has been endowed with enough mystery and surprise to juice it pretty good. Will bulls seize the advantage ? Rather than try to predict, we'll simply keep an eye on it and trade TLT with a bullish bias. Bring your timely ideas to the chat room if you're interested and I will gladly vet and score them using Morning Line odds. _______ UPDATE (Mar 2, 12:10 a.m.): The rally looks certain to hit a minimum D=145.13, given the way buyers obliterated midpoint resistance today at p=139.82. Here's the chart.  ______ UPDATE (Mar 2, 8:05): The worst selloff in recent memory triggered a 'mechanical' buy at x=137.19, stop 134.50. No one mentioned this opportunity, but I'll track it as a paper-trade nonetheless. We're looking to exit at least half at p=139.82. _______ UPDATE (Mar 3, 10:52 p.m.): Once again, a 'mechanical' trade has caught the low of a scary dive to produce a quick and relatively painless winner. T-Bonds' sharp reversal this evening has pushed TLT up to the 139.82 midpoint pivot where I'd advised selling half. If you used expiring, near-the-money calls, they should have more than tripled in value.  Selling TLT against the calls tonight would hedge the profit with a backspread. Here's the chart, with the elongated green bar representing night-session price action.

For now, allow for minimum downside to the 165.41 midpoint 'hidden' support of this pattern. Because of the mild gnarliness of this picture and the deep-sea location of p, you can try bottom-fishing there with a very tight stop-loss, even using out-of-the-money call options to leverage the bounce. Be sure to cash out half if they double in price!  The chart shown in the inset yields a different and more troubling picture. The stochastic divergence shown is quite bearish, even if it is not yet ominous. I will continue to monitor it, since AAPL remains The Only Stock That Matters. ______ UPDATE (Feb 14, 2022): AAPL's unwillingness to fall is what kept the stock market from continuing Friday's refreshing slide. The Hidden Pivot at 165.41 could still get schmeissed, but that didn't seem likely at the bell. _______ UPDATE (Feb 15, 11:04 p.m.): Even if the pattern shown in this chart doesn't develop into a textbook head-and-shoulders, the look of it at the moment is bullish. To give bears the benefit of the doubt, however, we should hold the applause until such time as buyers push above the key peak at 177.18 recorded on January 12. _______ UPDATE (Feb 17, 6:07 p.m.): Weakness over the last several days has started to bend the head-and-shoulders pattern out of symmetry, somewhat diminishing its bullishness..

Because the steep selloff that ended the week was driven by news from Kiev, we should view it as corrective. I've implied as much in the current Morning Line commentary, which notes that no one ever went broke buying stocks as they plummeted on some distressing headline. Friday's dive terminated precisely at the 'D' target of the small pattern shown in the chart, but still lower prices seem likely before the 'rumor' of a Ukraine invasion is actualized by Russian tanks and troops. We should therefore focus on p=4323.25 of the larger, bearish pattern, since that is where the futures are most likely to head on Monday.  Bottom-fish there in the usual ways, but let's remain open-minded to the possibility the midpoint support will give way. Depending on how badly, this could portend a test of January 24's bombed-out low at 4212.75. _______ UPDATE (Feb 14, 5:15): Candy-ass bears evidently were so unnerved today by rumors that Putin might be willing to negotiate that they failed to follow through on Friday's promising selloff. Add in the divergent, 'green' finish of AAPL and Bertie (bitcoin), and it is hard to imagine stocks going anywhere but sideways-to-higher this week. _______ UPDATE (Feb 15, 10:47 p.m.):  DaSleazeballs are still in charge, and they mean to take this hoax higher whether there are buyers or not. All of yesterday's gains occurred on zero volume around 4:00 a.m.  What more do you need to know? _______ UPDATE (Feb 17, 10:35 a.m.): See my recent Trading Room posts for an actionable idea that I aired yesterday and slightly revised a moment ago. _______ UPDATE (Feb 17, 5:55 p.m.): Barring a bounce from p2=4359.63, the futures appear headed down to the 4318.00 target of this pattern. Any profits booked on the way down should be applied to bottom-fishing there

The chart raises the question of whether Friday's sharp bounce precisely from the 'D' target of a fairly large, bearish pattern is the start of a major rally. We'll keep an open mind rather than speculate, trading this vehicle as opportunities present themselves. Subscribers who bottom-fished as I suggested would be cushioned by partial profits booked after TLT reversed with a powerful leap. The run-up caused Feb 22 138 calls to more than quadruple in value, but whichever options you used, gains already booked should be sufficient to put your mind at ease about holding onto a few for a swing at the fences. You can rotate them into the future with calendar spreads, but in any case please let me know in the chat room if you need further guidance. ______ UPDATE (Feb 15, 11:15 p.m. EST): The resumption today of TLT's death spiral should serve to renew our focus on the 3.01% rate I've projected for the long bond. It currently sits at 2.36%, up from  1.70% in early December.

The 1875.10 rally target of a 'reverse' pattern tracing back to November remains my minimum upside projection for the near term. The pattern has produced stellar 'mechanical' gains for subscribers who used it to get long on the dip to the green line back in October. Looking ahead optimistically, I'll suggest using the new, larger 'reverse' pattern shown to stay with the trend no matter how erratic it becomes. The pattern paradoxically yields a more modest target at 1916.40 than some smaller ones I could have used. However, because this is gold, which so often disappoints, I am being cautious. As always, a decisive move through this Hidden Pivot resistance on first contact would be a welcome sign that the rally has farther to go -- perhaps much farther. We shall see. _______ UPDATE (Feb 15, 11:23 p.m.):  The rally's failure by $1 to surpass key peak at 1882.50 recorded in November warrants a cautious outlook. Even if the peak eventually is exceeded, the likelihood of significant upside from there has already decreased. _____ UPDATE (Feb 17, 6:15 p.m.): The futures appear all but  certain to achieve the 1916.40 target, which served to keep us confidently on the right side of a balky trend. Let's see how bulls handle this 'hidden' resistance, since an easy move past it would portend a continuation of the uptrend. You can short there with 'camouflage' if you've made some bucks on the way up.

The chart shown uses a slightly more ambitious and gnarlier pattern than my latest one in gold to project a rally target at 26.12.  It has yielded a profitable 'mechanical' buy, although not as lucrative as the one in gold. However, it should serve in any case to keep us confidently aboard the uptrend for as long as it continues. A second 'mechanical' entry could be attempted if the futures revisit the green line (22.59), but I am recommending this only if the implied drop follows a high in the 'sweet spot' between p and p2. We should also be alert to a possible resumption of weakness, since there is a downtrending conventional abc pattern that tripped a 'mechanical' short on last week's rally to x=23.72 (Daily chart, A=25.54 on 11/16).

Quotes are headed to at least 101.88, but more likely to the maxed out D target at 107.63 shown in the chart. We've been using a 105.08 target that was based on the March contract to keep us comfortably in step with crude's sensationally steep rise, but switching to the April futures has revealed a pattern of greater clarity. The $100 mark is of course psychologically important, but it also raises the prospect of a global economy dependent on cheap energy collapsing under the staggering load of even marginally higher prices. Will the inevitable price reversal be the catalyst for the catastrophic deflation that central banks have struggled for decades to avoid? That would be my guess. Whatever is coming, we'll stay disinterestedly focused on the two targets given above to get a sense of whether prices could conceivably rise to as high as $200 a barrel, as at least one noted forecaster has been predicting.

Bertie has displayed little of its former market-leading brio lately, but it is nonetheless in a robustly impulsive uptrend that projects to as high as 51,556 over the near term. That target is speculative at this point, since the calculation uses a low at 42,011 on Friday that may not endure. A bigger picture using a 'reverse' pattern dating back to October offers the prospect of a run-up to as high as D=61,163, but we'll need to see how bulls fare at p=47,070 before we can confidently assess the strength of the uptrend.