Rick’s Picks

After two weeks of meaningless ups and downs, stocks seem in need of instruction. Or inspiration. Or something. It will likely come in the form of a headline, but don't expect the news to be anything special, or even interesting. Bulls/bears are ready to seize on just about any item that the news media could pretend or claim is significant. Thursday's morning's headline in the WSJ concerned a private equity deal for Victoria's Secret, a bra-and-panty has-been, and for all we know, the reported souring of the deal was the cause of the stock market's rally in the first hour. Regardless, my aging, bullish target at 2921.75 remains theoretically viable. I won't pretend I'm as enthused about it as I was two weeks ago when it emerged, but it's all I've got to offer you at the moment. A whopping, 145-point decline would invalidate it, but little else save Armageddon.

We'll keep the 1832.20 target broached here earlier firmly in mind, but the pattern shown is likely to be more useful for trading this vehicle over the next week or two. Today's push past the green line tripped a theoretical buy signal and implies the June contract will reach p=1772.60 at a minimum. If you trade gold actively, that midpoint Hidden Pivot can be used to set up a short sale, albeit one that could prove fleeting. A decisive push past the pivot would make further upside to the 1879.00 target an odds-on bet. In the chart, I have referred to the pattern as 'good enough for government work' because the impulse leg is technically illegitimate, with an extension above April 7's 1742.60 peak that did not exceeded any 'external' peaks as required.

In the Trading Room this morning, a subscriber recalled my certitude recently that AAPL's bear rally would reach a minimum 313.58 before sputtering out. As it happened, the stock swan-dived 8% after going no higher than 288.25. Should I double down on my target? As far as the subscriber was concerned, Goldman Sachs already won the bet: "Rick," he texted, "I'm going to give the point to Goldman." True, the renowned investment firm had presciently waved the yellow flag just ahead of AAPL's fall.  Some would say it was Goldman's warning itself that caused the stock to plunge, and they would be right. That doesn't necessarily mean it won't keep falling. For all we know, Goldman's vaunted analysts have nailed a very important top. But I doubt it, given the fact that the 288.25 high slightly exceeded an 'external' peak at 286.44 recorded a month earlier (see inset). The seemingly failed rally generated a powerful, albeit well camouflaged, impulse leg on the daily chart, implying that the selloff begun Friday is corrective and will eventually give way to a new rally leg. Anyone care to lay me some odds?  Incidentally, my long term forecast for AAPL calls for an eventual drop below $100 -- an outlook far less sanguine than you will find among self-aggrandizing dartboard prognosticators like Goldman who retail stocks to the public, and whose front-run advisories notoriously lag big moves in either direction. ______ UPDATE (Apr 27, 8:59 p.m. EDT): No, you're not imagining it, Apple really does face some big problems, including: 1) shifting assembly out of China; 2) maintaining sales of a high-margin product during a global recession/depression, and 3) competing in a streaming market glutted with competitors. Even so, I'll stick to the bullish targets flagged above. Buyers are struggling with the 285.26 midpoint

I searched my archive for any mention of the neon target at 1788.7 shown in the chart but found nothing. This is embarrassing, like a scavenger failing to spot a Harley 'Knucklehead" rusting under a pile of hay in a New Hampshire barn. If I'd noticed this pattern, I would have been less enthused about touting the mechanical buy at 1711  a week ago. (I am relieved, however, that no one has mentioned it since, even some subscribers who said they'd done the trade.)  Be that as it may, the position went in-the-black for long enough to allow partial-profit-taking, and it could still come home. The hourly chart is still bullish as well, even if disappointing at the moment, and an ambitious target at 1832.20 broached here earlier remains theoretically viable.  I would hazard a safe way to get aboard, but the pattern that has traced out over the last couple of weeks is distributive and about as appealing as off-brand ketchup. _______ UPDATE (Apr 28, 9:16 p.m. EDT): A three-day dirge has taken a toll on buyers without doing much technical damage, even on the lesser charts. We'll keep an eye on the so-far ratcheting downtrend nevertheless, since it began from a high that failed to reach the 1779.10 midpoint Hidden Pivot of a clear bullish pattern. This is slightly bearish but would not become concerning unless the downtrend breaches 1666.20, the point 'C' low of the bullish pattern.

The hopeful, decisive pose struck by the President during tonight's briefing has touched off a spirited short-covering rally, powering this dervish past a major Hidden Pivot resistance at 291.45 that I hadn't expected to give way so easily. Actually, I'd planned to get short there, but fortunately the gap-up move in after-hours trading rendered my bold dream impossible. The move has opened a path to p2=313.58, a well-wrought secondary pivot shown in the chart. It will likely be a better place to try shorting than tonight's erstwhile Maginot Line; however, when we are doing so, it would be careless to ignore the magnetic allure of D=347.24. At that price AAPL would be in record territory, as blithely oblivious to the realities of pandemic economics as a tin of sardines. ______ UPDATE (Apr 20, 12:20 .m.):  Goldman's spinmeisters unloaded on AAPL Friday, driving the stock sharply lower. Although the selloff generated a bearish impulse leg on the hourly chart that merits our attention, I still expect a rally to at least 313.58 before a top is in. ______ UPDATE (Apr 21, 12:08): If bulls are about to regain command, we should see AAPL turn from either 275.20 or 272.61. Both of these Hidden Pivot supports are shown in this chart. ______ UPDATE (Apr 21, 9:22 a.m.): Sellers breached 272.61 shortly after dawn and now AAPL will fall to at least 268.38, a target calculated using night bars.  For the moment, however, Buffett and DaBoyz are using bears like a speed bag, sending the stock into a short-covering rally before they let the stock grope its way down to a 'natural' low. Here's the chart, with a 268.82 target that is derived from overnight bars.

DaBoyz have obligingly stepped out of the way Thursday night, allowing a short-squeeze panic to do what mere bullish buying never could. The June contract now looks like an almost certain bet to reach a 2921.75 target we've been using for the last week that seemed a little farfetched when I first posted it.  Since these targets sometimes behave in Heisenberg-like ways, we should assume that my having aired the target on the home page will make it a less than stellar spot to stake out a big short position. We can try it just the same, but with entry risk very tightly controlled. My hunch is that the trade will produce at least a small profit but that buyers will retake the offensive quickly and drive the June contract to the marquee-suitable 3000 before remorse starts killing off the rally's most intrepid spear-carriers. ______ UPDATE (Apr 21, 12:25 a.m.): ES has tripped a weak 'mechanical' buy signal at p=2771.25, but we are already a step behind it, and I would only have recommended it in the first place to Pivoteers who can cut the implied entry risk of $2500 per contract down to a fifth of that or less.  Why a 'weak' signal? Because the tortuous C-D leg has given initially-too-eager bulls a chance to jump ship after booking a profit. Here's the chart. ______ UPDATE (Apr 21, 10:12 p.m.): Just a tad lower and the futures will trigger a mechanical buy at 2696.00 (the green line), stop 2620.50. This trade is even riskier than the one at p=2771.25 (see above), and I am therefore recommending it only to Pivoteers who are comfortable on double-diamond slopes. If it gets stopped out, that would suggest distribution has been at Category 5 strength, since the April 5/7 A-B impulse leg was 

The futures still appear to be laser-locked on 2921.75, a Hidden Pivot target that I've drum-rolled here recently. I am strongly discouraging shorting there unless you've made at least a thousand bucks on the way up, so please don't announce your intentions in the Trading Room.  I doubt we'll be so fortunate as to see a pullback to p=2771.25, which would trigger an enticing mechanical buy, stop 2721.00. But there are bound to be other opportunities to get aboard, possibly with less risk. Those of you who remember how to do the old-style mechanical entries should look for an opportunity on a pullback to p2=2846.50. Recall that we need a few price bars above that level, with some white space beneath them, to set up the trade. Otherwise, any dip that exceeds a prior low on the lesser charts can be used to set up an rABC entry. _______ UPDATE (Apr 15, 9:33 p.m.) The thousand bucks (see above) was there for the taking for anyone who used the price trigger and stop-loss I posted in the Trading room about 45 minutes before the opening. This gambit went successfully against the day's weighty downtrend and could have produced an actual gain of about $2300 in under 20 minutes. As far as I could tell, only one subscriber, the intrepid MikeS, jumped on it, so I did not establish a tracking position. Looking just ahead, the drum-rolled 2921.75 rally target noted above remains viable, but tonight's weakness offers little encouragement for a bull trade. A dive to the green line (2696.00) would trip a 'mechanical' buy signal, but I'm much less enthused about using it than I was yesterday's signal at the red line. Check the room for guidance in real time, since prospects could brighten after the opening.

Buyers blew away a Hidden Pivot target at 1782.30 that we'd been using for a while and June Gold now looks bound for at least the 1832.20 target shown. The futures are all but guaranteed to get there if they can close above 1777.40 for two consecutive days or reach 1800.00 intraday.  We can use the pattern shown to trade the rally confidently. Most immediately, that would mean placing a 'mechanical' bid at 1711.11, the green line, stop 1670.60. A somewhat riskier trigger could be fashioned using p=1751.50, stop 1724.60, but I'd suggest paper-trading this one if you are unfamiliar with 'mechanical' entries. Even if you know what you're doing it would be best to convert the mechanical signal into a less risky alternative. Tune to the chat room for further guidance if the opportunity gels. Let me also mention, just to be on the record with it, that there's another rally target at 1886.20 that comes from the continuous daily chart. The futures would need to push decisively above the 1777.40 'secondary' pivot referenced above to imply that the higher number is a done deal. Here's the chart. ______ UPDATE (Apr 15, 9:44 p.m.): A buy at the red line (see above) never got airborne, but a 'mechanical' bid at 1711.10 still looks promising -- the moreso if it occurs early in the session. ______ UPDATE (Apr 16, 8:30 p.m.): Here it comes!  The best 'mechanical' trades will often test our nerves to the limit, since they trigger at the end points of brutal countertrend moves. This one would go 'live' at 1711.10, stop 1670.60, for a shot at 1751 or higher -- that's risking more than $4,000 per contract  -- but I'd suggest watching from the sidelines if you are merely curious about how well they work. The

The June futures have topped so far this evening less than a point from the 1775.10 rally target I'd flagged Sunday night ("Gold is down an unpersuasive $24 at the moment...").  The target may have been especially useful to subscribers who felt discouraged by gold's $30 drop after Thursday's close. I'd suggested buying on weakness using a 'mechanical' bid at 1722.90. It failed by a hair to trigger, but the point of it was to avoid hoping for the gift of a pullback all the way to the green line, where we initiate most of our 'mechanical' trades.  The chart raised the prospect of an rABC short, but it actually triggered at 1772.20 just after the chart was drawn and produced a $370/contract gain on paper. Here's the rABC pattern on the 30-minute chart: a=1772.80 (4/13 at 4:00 p.m.) Bulletin:  Gold's pop just now above 1775.10 means the June contract is on its way to at least 1782.30, a bigger-picture target we've been using for quite a while that could prove challenging to beat.