Rick’s Picks

QQQ poked its rapacious snout just above a compelling Hidden Pivot resistance at 337.10 last week, then rolled down with somewhat more conviction than the Dow. It ended the week toward the lows, leaving the possibility of a hung jury when the new week begins. We’ll reserve judgment for now, but if short-covering should shred the resistance and leave it behind, I’d have to grudgingly concede that the 352.09 secondary pivot shown in this chart is in play as a minimum upside objective. Another interesting aspect of the chart is that QQQ would trip an enticing ‘mechanical’ buy if it were to plunge 12% to the green line at 290.77. ______ UPDATE (Feb 25, 5:53 p.m.): It's been a long time since a week ended with a crushing decline, but perhaps this will be the one patient bears can celebrate. The fact that the selloff begun ten days ago from a high 1.09 points above our longstanding target at 337.10 at least makes it interesting.

The futures spent the entire week head-butting a 3938.25 target that has been in play since early November. Ordinarily we might infer that a major top is in the works. But these are not ordinary times, and a practically inexhaustible supply of credit dollars has given the trend an aura of invincibility. My hunch is that an unexpectedly strong dollar and high borrowing rates will snuff the good times, but even then it will take time to sap the manic energy behind the rallies. Let's see what another week brings. In any event, the futures would need to fall all the way to 3652, or about 6%, to generate a bearish impulse leg on the daily chart. _______ UPDATE (Feb 24, 7:14 p.m. EST): Bears are caught in a short squeeze that is the first in a month, although it has yet to turn savage. That will likely happen by week's end if it happens at all, and it will be announced by a decisive push through the 3925 midpoint Hidden Pivot shown in this chart. At that point the futures should be presumed headed toward the 4046 target, although I cannot yet say for sure whether it will be reached or, alternatively, if the trend will fail at p2=3986. _______ UPDATE (Feb 25, 6:04 p.m.):  Wednesday night's sharp reversal left barely intact a mechanical buy I'd suggested paper-trading. However, the more interesting fact is that the trade was an instant loser even though the set-up was textbook attractive. This suggests sellers are getting antsy, even if no one has hit the panic button yet. Perhaps this is a bout to occur ahead of Friday's closing bell?

The longstanding target at 318.30 was effectively fulfilled last week when DIA got within 0.70 points of it just ahead of Wednesday's regular-session opening. Even so, the Dow ETF remained buoyant for the remainder of the week, finishing near the middle of the range. A lunge higher on Monday or Tuesday is not likely to get very far, but let's stipulate that DIA must close above 318.30 for two consecutive days before we assume that bulls are still in charge. Otherwise, a rolldown is coming, possibly turning into a long-overdue avalanche. ______ UPDATE (Feb 23, 8:23 p.m.): The hoax that wouldn't die, apparently. Since DIA hasn't actually touched 318.30, let me suggest buying a few cheap, soon-to-expire puts if and when it does. Treat them as you would a scratch-off lottery ticket, since you won't be getting much better odds. All you'll be doing is satisfying a gambling jones for picking tops, but what's so wrong with that? ______ UPDATE (Feb 24, 7:20 p.m.): The puts came to us for as little as 0.38-0.40, but I suggested blowing them out shortly thereafter when DIA fist-pumped its way past the 318.30 target.  This implies more upside to at least 327.45 (60-minute, A= 261.41 on 10/30; B= 299.49 on 11/9). ______ UPDATE (Feb 25, 6:08 p.m.): Today's dive failed to generate a bearish impulse leg on the intraday charts, but I wouldn't count on relative strength in the Dow to save the day for other broad indexes that fared worse.  Key support lies just below 300.

IWM's recent failure to achieve either of two rally targets I'd drum-rolled is curious, given that it has been the vehicle of choice for portfolio chimps paid to throw other people's money at superficially appealing 'themes'. The more important of the targets is 234.82, derived from a pattern that stretches back to the beginning of the bull market in 2009.  The other is the 232.72 target shown in the inset.  It's possible the chimps, abetted by their unwitting slaves, short-covering bears, will lay waste to the two Hidden Pivot obstacles in the week(s) ahead. For now, though, we can infer only that Big Money has stalled, presumably waiting for bears to provide the kind of boost that mere bullish buying cannot. Given the targeted tops that have occurred recently in the Dow, QQQ and S&Ps, the burden of proof will be on the optimists as the week begins. ______ UPDATE (Feb 24, 7:25 p.m.): The lunatic brigades were back, bolstered by short covering that drove this gas bag to within easy distance of 234.82. Right now, that's the only place I'm recommending getting short. _______ UPDATE (Feb 25, 6:12 p.m. EST): Our chances of getting short at 234.82 further dimmed today, although IWM's dive has yet to do any serious damage to the intraday charts. Let's see what Friday brings. 

I've been steadfastly at bitcoin's side the whole way up, raising my sights when necessary and putting out 'mechanical' buy signals for anyone crazy enough to trade it. Since virtually all of the signals have been profitable, perhaps you'll be willing to humor me when I say that the 66,880 target shown is where the mania could end. This is somewhat higher than the target I mentioned in the chat room the other day. At the time, I hadn't noticed the luscious point 'A' low on the weekly chart (see  inset). In any event, I am no longer so naive as to suggest that it might take a little time for bitcoin to get there. At the rate this parabolic blowoff is going, it would be no surprise if bulls hit the target before the week is over. Thereafter, it would require a pullback and a new rally leg to allow me to come up with a new target. Alternatively, if BRTI blows past D without so much as a howdya do, it would lend weight to predictions that bitcoin will eventually trade for $250,00, or even $1 million. I doubt this will occur, but I am  not about to assert that it could never happen. _______ UPDATE (Feb 23, 7:17 p.m. EST): A nasty plunge has tripped a dicey 'mechanical' buy at p=47,845, stop 41,500. At the risk of missing the bottom of a presumptive correction and a potential shot at D=66,880, I'll recommend placing the mechanical bid at 38,328, stop 28,809. A paper trade is suggested if you simply want to keep score. So far, 'mechanical' buy signals have been batting 1.000, even at the sub-$4000 low that preceded the current mania.

Bears couldn't finish the job last week, stranding a fine-looking Hidden Pivot target at 1749.80 with a feeble rally to end the week. The target will remain valid nonetheless until such time as 1878.90 is exceeded to the upside. If and when that happens we shouldn't get too excited, since bulls too have been unable to achieve 'D' targets associated with similarly reliable patterns. For trading purposes I'll suggest backing up the truck to buy 'em if the futures get within 40 cents of 1749.80. A stop-loss as tight as 1747.90 can be used if the order is filled. _______ UPDATE (Feb 22, 4:37 p.m. EST): The futures went the 'wrong' way, getting nowhere near our bid. However, despite the seeming strength of the rally, it conspicuously failed to surpass  an 1814.20 'external' peak made on the way down last Tuesday. The peak seems likely to be exceeded soon, but the inability of bulls to accomplish this on the first try suggests that the coming rally is not destined for greatness. _______ UPDATE (Feb 24, 7:33 p.m.): No sooner was the 1814.20 peak exceeded than gold receded back into its wonted state of fake mournfulness.  The 1749.80 downside target is still in play theoretically, but I'm not encouraging anyone to give it much thought.

Silver spent a second consecutive week confounding bulls and bears alike, apparently in no hurry to resolve the bullish pattern shown. It nearly got negated by a phony swoon last Thursday evening, but the selling stopped just shy of the pattern's point 'C' low at 25.93. The shortfall will task bears when the new week begins, since the spike rebound generated a modest impulse leg on the hourly chart. The midpoint pivot at 28.66 can serve for now as a minimum upside objective, but it'll take a two-day close above it to imply that a finishing stroke to D=31.39 is likely. _______ UPDATE (Feb 24, 7:03 p.m. EST): Price action has been quite tedious, albeit within the context of a bullish channel in a bull market. Strip out the gratuitous Reddit/Robinhoodie spasm from three weeks ago and it grows even more tedious. The pattern projects to 31.39, as noted above, but the target won't be a "go" until such time as p=28.66 has been decisively exceeded.  Note: "Reading" price action at the midpoint Hidden Pivot is a key feature of my system. We can trade in and out of silver all day long, lowering the cost basis over time, but I'd prefer to do it with HP tactics that lower the entry risk to perhaps $150-$200 per contract rather than the $1000 that's possible when SI swings $2, as it has already done once in the C-D leg begun on 2/4.

The so-far high of this bull market has fallen just shy of a 234.82 target with a sterling pedigree. All three coordinate used to calculate the target are historical, with a point 'A' low located at 2009's watershed low, and a B-C correction that brackets the market's epic collapse a year ago.  I'll recommend waiting for Mr. Market to hand us the trade we want on a silver platter before we jump aggressively on some March 19 190/185 puts spreads. I'd originally suggested a 0.15 bid but am now advising that you buy them at will, stepping up your size at lower and lower prices as IWM gets closer to the target. Going up against a bull that is about to enter its 13th year is of course highly speculative, so don't risk any more than you could afford to lose without pain or remorse. The pattern is very clear an compelling, with three 'locked' coordinates for which there are no alternatives. That is why I strongly doubt IWM will blow past the target, at least initially. There is almost certain to be a tradeable pullback from very close to 234.82, and that is what we are betting on, not the ever elusive Mother of All Tops. As always, once you've bought any puts spreads, offer half of them to close for twice what you paid. _______ UPDATE (Feb 18, 9:30 p.m.): Bears have fought so hard for meager yardage over the last few days that they look ready to keel over dead. Absent some sort of Sunday night shock, we might look for the broad averages to reverse and pop to new record highs next week. If so, we should keep that 234.82 target in mind as a place to get short aggressively.

In retrospect, it was entirely predictable that Mr. Market would push this little scumsucker to within a split hair of my longstanding target at 3938.25 on a Friday afternoon, just ahead of a three-day weekend. The actual high was 3936.25, a shortfall of five hundredths of a percentage point. So what now?  If you took a small short position as originally advised, don't worry, you're going to be just fine. But we will still have to sit and wait until Tuesday (!!) until options start trading again, and anything could happen between then and Sunday night, when index futures will open for a limited number of hours. All we can do is cross our fingers and hope stocks are still hovering near my targets have when the new, holiday-shortened week begins. That could provide the opportunity we've waited so patiently for to buy way-out-of-the-money put spreads in, for one, IWM, but also possibly DIA and QQQ. _______ UPDATE (Feb 15, 11:51 a.m. EST): At the moment, the futures are doing what in a normal world, in a bull market not driven by full-blown psychosis, would seem absolutely impossible -- i.e., pushing above 3938.25 as though this solid-titanium Hidden Pivot did not exist. If the 234.82 rally target in IWM suffers the same fate, it will bring me closer to the conclusion that nothing short of a true black swan -- i.e., an event that is unforeseeable and well nigh unimaginable -- can stop an asset bubble fed by practically unlimited credit easing around the world. That said, I doubt the current push through 3938.25 will get very far. Price movement in markets disrupted by three-day holidays are always greedily opportunistic of thin supply/demand, so it doesn't surprise me that the criminals who control these markets are using President's Day to