Rick’s Picks

I've substituted TLT for T-Bond futures to give equity traders a chance to get involved. If a trade is signaled, it should be executed using TLT itself rather than puts and calls (unless they look particularly timely and opportune). There is nothing of the sort in this picture at the moment, although it may hold some small appeal for straddle sellers. A bullish resolution to this tenesmus picture is possible if TLT can rally above the pattern's 144.42 point 'C' high. That would exceed two peaks, creating an impulse leg more powerful than would be apparent at a glance.

Bears were probably more frightened than bulls when Monday's carnage ended. The final half-hour of the session featured an 80-point rally so steep that it would have left shorts too dazed to stand their ground. However, the bigger picture suggests cyclical forces may finally be on their side. It features an 11% drop in the S&Ps over the last eight days that exceeded no fewer than five prior lows. This is a quite powerful impulse leg, and it is how we might expect a bear market to begin.  For now, though, it seems highly unlikely to be quickly undone by short covering, let alone by bulls eager to buy the dip. This time, many of them will doubtless be praying for an opportunity to exit at at least somewhat higher prices rather than salivating over the prospect of going all-in on further weakness. This doesn't mean things will get any easier for bears, who may be sensing a chance, finally, to make some real money. Regardless, whatever opportunities arise will be reducible to the common denominator of the Hidden Pivot Method: impulse legs. Stay tuned if you want to see how we make sense of them and trade them, no matter how nutty stocks get. _______ UPDATE (Jan 25, 10:23 p.m.): 'Mechanical' trades work best in violent markets, especially when the entry looks scary. Check out this evening's chat room gambit involving a bet against a nasty after-hours sell-off. It produced a quick winner worth at least $1,700 per contract. _______ UPDATE (Jan 26, 9:10 p.m.): The night shift dirtballs can't always steal with impunity. Tonight, for instance, although they have pulled their bids in order to see where sellers exhaust themselves, they must still be on their guard for an onslaught of market orders at the opening. Use p2=4240.50 in

The rally has been unimpressive, but it is inarguably getting the job done. We've been using the pattern shown, with an 1873.90 target,  to stay on the right side of a challenging trend. It has helped us to avoid disappointment whenever gold dives from somewhere shy of a minor target, but also to spot money-making opportunities on the way up, including a recent $8000 winner that had been explicitly detailed here.  A similar opportunity would be signaled via a 'mechanical' buy if the futures were to fall to p=1813.50 (the red line in the chart). The appropriate stop-loss would be at 1793.30, implying $8,000 of entry risk on four contracts, but we'll find a less stressful way to get aboard if and when the opportunity comes.  ______ UPDATE (Jan 26, 9:16 p.m.): If today's gratuitous, stage-managed plunge continues, it will trip a 'mechanical' buy at x=1783.20, stop 1752.00. Don't bother with this one unless you are proficient enough with rABC 'camo' setups to cut the implied $12,000 entry risk on four contracts to no more than a tenth of that.

Whatever is pushing up quotes for crude, it's scary to imagine.  Stocks have been acting as if they understand that the party is over. But energy prices? You'd think the global economy was about to embark on a boom so robust that it will somehow overcome the world's hopelessly knotted supply chain. In actuality, the economy of the most important buyer of oil at the margin, China, is close to imploding, starting with a real estate bubble that could be the biggest ever. Is crude perhaps discounting a collapse in supply when Putin attacks Ukraine? Whatever the answer, and even if a bear market in stocks has begun, the March oil's monthly chart implies that prices are on their way up to at least 105.08 this winter. Gas by then will be $6 a gallon, which, far from exacerbating inflation, is more likely to knock the economy on its ass. ______ UPDATE (Feb 2, 9:24 p.m.): This chart shows why it is impossible to be long in crude while keeping risk:reward in propitious balance. Notice how each new marginal high is followed by a swooning dive that is about three times what you would have made holding the position from one peak to the next.  

Buyers caved after failing to get much boost from a rigged opening. Sellers were played to exhaustion an hour into the session, but when the obligatory short squeeze sputtered out before lunch, the game was over for bulls. The surprise was that the downtrend in the final hour failed to hold a promising Hidden Pivot support. This put the futures on track to hit the 4372.50 target shown in the chart.  This would ordinarily be a can't-lose place to try bottom-fishing intraday, but not on a Sunday evening if the futures open weak.  That would waste an especially opportune 'gnarly' pattern, but as we know, there will always be another.  Following a decisive breach of 'D', the next logical stop on the southbound express would be 4305.25, derived from converting point 'C' on the chart into 'A' of the new pattern.

The head-and-shoulders pattern that AAPL has traced out since Thanksgiving is so commanding at this point that there's no point in using Hidden Pivot patterns to try to improve the forecast. The selloff will need to hit 158 or so to round out the pattern visually, with additional room all the way down to around 147 if bears mean business.  We shouldn't rule out the distant-longshot bet entirely, however. That would call for a sharp reversal from 160 or above that just keeps going. A rally with sticking power would be telegraphed by minor rallies that shred their d targets. Whatever happens, AAPL continues to be the perfect proxy for institutional mindset, ambition, folly and greed. _______ UPDATE (Jan 24, 8:23 p.m.): Today's exhilarating plunge to 154.70 made the head-and-shoulders pattern look even more compelling. It amounts to mountainous supply, so we'll focus on ways to get short, or perhaps long in order to make a few bucks ahead of the next downturn. Stay tuned to the chat room for a timelier perspective.

The so-far nascent rebound blew out a cautious attempt to get short last week with such ease that we should think expansively about how far it could go.  The pattern shown allows for a run-up to 160^07, and my gut feeling is that the futures will need all of that room over the next 7-10 days. That implies 'mechanical' bids will enjoy favorable odds all the way up.  There's about $1750 of implied entry risk per contract, however, but w can cut that down to size with 'camouflage' set-ups that reduce our theoretical exposure by perhaps 90%.  Pay close attention to price action at 156^14, since that is the 'D' Hidden Pivot resistance of a lesser pattern. If it's easily surpassed, that would be warning bears to step out of the way. _______ UPDATE (Jan 24, 8:31 p.m.): The futures reversed sharply after topping four ticks above the 156^14 resistance billboarded above. No one mentioned wanting to trade this vehicle, so I provided no further guidance.

Silver demolished an important Hidden Pivot resistance at 24.01 with such force on Friday that we shouldn't hesitate to consider far more ambitious targets. The one shown at 40.12 is not even the most optimistic on the horizon; that lies at 53.06, the target of a pattern begun from 8.77 more than 13 years ago. We'll be better able to judge the power behind the move when we've seen how it interacts with the smaller ABCD's 30.76 midpoint pivot. Another lies at 32.35, and it is likely to be even more challenging, since it is the midpoint pivot of the much larger pattern. The lower midpoint is not in play yet, since it will require a rally to the green line (x=26.09) to lock in the recent low at 21.41 as the pattern's point 'C'; however, the big pattern has already done so.  In any event, and as you can see, both patterns have very steep impulse legs pushing the rally. That is coiled power, and if it is unfelt now, it eventually will be.  It also portends bullish 'mechanical' set-ups throughout the bull market that are extremely likely to work. Stay tuned! ______ UPDATE (Jan 24, 8:40 p.m.): My extravagant rally targets (see above) tapped a gusher of bullish sentiment in the chat room today.  That's all well and good, but please keep in mind that the March contract will need to get past November's 24.58 peak and then some before we break out the bubbly. Last week's exuberant, Hidden-Pivot-demolishing spike was a welcome and encouraging step in that direction, but no more. ______ UPDATE (Jan 26, 9:27 p.m.): The futures will fall to at least D=23.01 if the secondary support a 23.27 fails. Bottom-fish there only if you know what you're doing. _______ UPDATE (Jan 27, 8:57 p.m.): Today's downdraft

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.