Rick’s Picks

Just because the E-Mini S&Ps were down by a record-breaking 225 points today doesn't mean the selling is over. Expect the futures to fall  further 140.75 points, at least, before they can attempt to bottom. That would leave them at 2592.75, a Hidden Pivot support shown in the chart. The pattern lacks a distinctive point 'A' high, but the weak one I've chosen should be good enough for government work. No matter which top is used, it wouldn't change the fact that sellers obliterated a midpoint pivot at or near 2864.88, telegraphing yet more weakness to come.  A slight adjustment in 'A' yields an alternative target at 2603.40, so be ready for a turn from there as well. _______ UPDATE (Mar 11. 10:08 p.m.): I still expect the futures to reverse course at or very near one of the two targets flagged above. If they eventually relapse below these Hidden Pivot supports, you should infer that more slippage to 2447.75 is likely. At that point the S&P futures will have corrected 28% from the all-time high at 3995 achieved just three weeks ago. That would not necessarily mean the bear market is over. More likely would be the start of a Stage 2 that could see stocks grind bulls and bears alike to dust over the next year or so. ______ UPDATE (Mar 12, 9:10 p.m.): It is bearish that so clear and promising a Hidden Pivot support as the one at 2447.75 proffered above has given way so quickly. Since most trading algorithms have the IQ of a grapefruit seed, we should expect the machines to test the key low at 2316 recorded in late December. Look for a rally from somewhere very near there, but I cannot tell you how best to trade it until such time as

The tempo of pandemic horror stories quickened over the weekend, implying that bulls and bears who bought into Friday afternoon's short-covering binge may have set themselves up for a sacking.  We'll know by the time you read this, but my hunch is the DaBoyz will pull their bids when index futures start to trade late Sunday afternoon, letting shares fall beneath Friday's lows before stepping in. This will be tricky even for DaSleazeballs, since an onslaught of market orders from those unable to trade off-hours could hit when the regular session opens. The key support to watch is the 2808.25 target of the pattern shown. It is conservative, since we could wind up pushing the point 'A' toward the record highs achieved just before the pandemic selloff began globally.  In any event, all rallies, no matter how powerful or intimidating, should be viewed as opportunities to get short. Since many if not most traders are thinking exactly that, the rallies are bound to exceed the limits of the bearish imagination. Remember, the role of the short squeeze is not only to obliterate bears, but to keep bulls in the game -- all the way to the bottom.

The April contract has taken a tortuous path higher since New Year's Eve, when it tripped a buy signal tied to the 1731.30 target shown. The target has never been in serious doubt, even when a hellish $135 swoon occurred a couple of weeks ago. In fact, that tripped a 'mechanical' buy signal at p=1594.20 that may have been reassuring to those who've been in gold for the long haul.  Although 1731.30 is not quite a done deal because of the difficulty buyers had getting past p, it's probably an 85% shot to be achieved, probably within the next 6-12 days. We'll need to take stock if and when this happens, since there's likely to be a substantial correction from that number. ______ UPDATE (Mar 11, 9:44 p.m. EDT): It would be great if we could say gold has held its own, but shouldn't it be rallying as stocks collapse? Clearly, bullion is not on the list of investable assets that portfolio managers regard as safe havens. Which leaves mostly nervous Nellies to tend precious metals markets, and to dive for cover each time gold seems to be getting insufficient lift from pandemic fears. The bull market is still very much intact on the daily and intraday charts nonetheless, as is the 1731.30 target. My gut feeling is that it eventually will be reached, but that it could take longer than the 6-12 days I'd allotted. As a practical matter, a long position would have been exited at around 1695 using a 'dynamic' trailing stop such as I've detailed here before. Regardless, we should prepare for a long slog -- and perhaps be careful what we wish for, since a heightened crisis capable of lighting a fire under gold evidently would need to be more serious than the crisis we've

AAPL has traced out a pretty simple pattern that implies minimum slippage from here to at least p=269.86. Although the pattern is obvious enough to attract the attention of the hoi-polloi we always hope to be trading against, the midpoint pivot is probably sufficiently obscure to offer a decent place to attempt bottom-fishing.  The stock will be short-able in the meantime intraday, but I'll leave the details to the Trading Room, assuming there is sufficient interest. The gaps between HP levels are so big that we can hope to trade the stock, by turns, from either side of the market. Nudge me if you're keen to take a plunge in options when choice opportunities arise. ______ UPDATE (March 9, 8:54 p.m. EDT): Today's plunge shredded the 269.86 midpoint Hidden Pivot, making further slippage to 235.72 a good bet. Here's the chart. _______ UPDATE (Mar 10, 9:04): Just an inch more and AAPL will trip a signal to get short 'mechanically' at the green line. I've spotlighted the stock's ability to tell us exactly what's on Mr. Market's diabolical mind, and so we shall see. I am not recommending the trade, which would require a stop-loss at  304.01, but we'll track it anyway in order to gt a firm handle on AAPL's behavior. The 235.72 target flagged above is still viable and will remain so unless the stop-loss on the short is hit. _______ UPDATE (Mar 11, 9:50 p.m.): The stock failed by an inch to trigger a mechanical short by touching 286.93 on the last rally. That will not affect the odds of more slippage to 235.72, however, even though the stock appeared to resist a wholesale collapse today. We can assume AAPL shares are being deftly distributed by DaBoyz, who would be well aware of the company's vulnerability in

On their way lower, the futures have bounced twice precisely from the 2972.63 midpoint Hidden Pivot of the pattern shown, validating the pattern itself and its 2808.25 target. That doesn't mean sellers are certain to pound it down to that level, but odds of this happening would surely increase if p is decisively exceeded to the downside.  How decisively? A two-day close beneath 2972 would suffice, or a plunge hitting 2940 (or so) intraday.  If instead the support holds and the next up-cycle exceeds the 3182.00 'external' peak recorded on February 26, that would imply a retest of the old record high is likely.

Don't take your eyes off this stock if you want to understand how short squeezes work. This one, involving as it does the shares of the most valuable company in the world, is guaranteed to be spectacular. It is a textbook case for several reasons: 1) the biggest institutional investors on the planet own AAPL up to their eyeballs; 2) they are determined to lighten their positions ahead of potential earnings pain from the coronavirus; and, 3) after hanging tough through one of the steepest selloffs in history, they are not about to bail out bears with ample supply until the latter have driven the stock well above $300 or even to new record highs. Notice that the chart shows a $326.25 rally target that would become an odds-on bet if AAPL blows past the $306 midpoint Hidden Pivot. If and when the stock achieves those heights, you will notice that nearly everyone -- investors, pundits, and news media -- will have forgotten about what was troubling Apple in the first place. Recall that the company announced a couple of weeks ago that supply chain disruptions caused by the pandemic would take a heavy toll on earnings. This was no exaggeration, considering Apple's assembly operations are concentrated almost entirely in China. Investors reacted appropriately by marking down shares by 20% in the space of a week.  Now, powered by a short-covering panic, the smart money has recouped more than half of the loss and could conceivably get all of it back. What Warning? If AAPL gets within $10 to $15 of the record high $328 achieved on January 29, it will be as though the company's revenue warning never happened. Even better for big players seeking to lighten their load, once AAPL seems comfortable above $300, many institutional investors who

A thousand points here, a thousand points there, and pretty soon we're talking about a real rally. But is it? I'll reserve judgment until AAPL, the closest thing we have to 'the fat lady', sings. As I've pointed out here many times in the past, AAPL is the only stock one need get right in order to get the stock market right. Regardless, there is nothing I can presently imagine that will stop the futures from achieving the 3206.25 target shown in the chart. During today's session, I'd been eager to get short at p=3069, but witnessing the persistence with which short-covering bears munched through it has made the next upthrust seem all but inevitable. I may try shorting p2=3147.94 anyway, if only because it seems extremely unlikely to stop the charge. The contrarian thing. But I will do so only with risk controlled down to bupkis.

I'd projected a plunge in 30-Year rates to 1.58% a while back, but it now looks like they could fall as low as 0.73%. The earlier forecast was intended to match a still unachieved 186^04 rally target for T-Bond futures, whose price correlates inversely with yields. They are currently trading for around 172^10, leaving plenty of room to rally. If so, yields on the long bond, which hit the 1.58 target today, are bound much lower. A 0.73% rate would be congruent with a deep economic recession, so it's possible the stock market and the economy have topped.  On the 10-Year Note, the corresponding yield would be negative. I regard this as very unlikely, notwithstanding the fact that there is $13 trillion of sovereign debt priced to yield less than zero. My guess is that the 10-Year will fall not to the D target of the pattern shown in this chart, but to the secondary pivot at 0.30%. For now, we'll use this number, a Hidden Pivot support, as a downside objective.

Because we took profits on 75% of our initial position on the way up, last week's horrific plunge still left us with a more-than-nominal profit. Our effective cost basis was $24.32, and I'll suggest exiting on the opening. I'd originally planned to gut it out in order to make the point that 'mechanical' entries are easy to execute and work well, especially when price action turns violent. However, the more important goal was to provide an absolute no-brainer trade to pay for your subscription, even if you've never done anything but lurk in the chat room. Assuming GDX gets even slight lift on the opening from Sunday night's strong rally in bullion, you should come away with a profit of around $200. I may suggest jumping in again if and when GDX falls to the green line, as it well may. Please stay closely tuned, especially if you've never made a dime on other trading services. _______ UPDATE (Mar 2, 11:47 a.m.): Based on this morning's opening price of 27.24, we exited the remainder of our position for a net profit of $292. Many subscribers reported jumping on this one when I recommended it a month ago. I purposely made it simple enough for traders of all levels of experience, and cheap enough to be suitable for accounts as small as $6,000. If you didn't do the trade yourself, you ought to be asking yourself why, since it was the every-once-in-a-while lay-up I promised when you subscribed.