Rick’s Picks

Should we be concerned that stock-market bulls have been on a take-no-prisoners rampage, acting as though all is right with the world?  It was only a few months ago, after all, that investors were said to be deeply troubled over the prospect of global recession and dimming odds of a meaningful trade deal with China. Not that these problems, which haven't abated other than in investors' forgetful brains, much slowed the onslaught of buying. Stocks rose over the summer anyway, even as yields were falling to levels implying the U.S. would soon join Europe and China in recession.  Now, with interest rates again on the rise, the Dow Industrials and S&Ps have illogically been hitting record highs, prompting this headline in the Wall Street Journal: "Rising Yields Quiet Bond Market's Key Recession Alarm". But don't break out the bubbly quite yet. For as our friend Bob Hoye points out in his latest Pivotal Events, the fact that the yield curve is no longer inverted hardly means that the warning has gone away.  "Not likely," he notes, "as the trend to inversion and the actual inversion is a key form of speculation in the credit markets. Once done it can’t be erased and the contraction is inevitable." Bob is renowned as a diligent student of market history, and you can be certain he has not misused the word "inevitable" merely to seize our attention. He tracks data stretching back hundreds of years, and his spot-on predictions have always ranked him near the very top of economic forecasters. His chartist, Ross Clark, whom I've called the Ray Charles/Mozart of technical analysis, is no slouch either.  Both are cautious right now, with Ross noting successful tests of support by the Dow Industrials in May, August and September. However, he would regard a failure

The stock's bounce from a 1447.50 correction target hit on Wednesday could have produced a gain of as much as $1000 per contract for subscribers who traded it. Those who leveraged the target appeared to have taken profits near the 1467.40 threshold where I'd said the rally would become a better bet. And so it has, mainly because the rally exceeded 1467.40 by two ticks, generating a bullish impulse leg on the intraday charts. However, the futures have made no more headway, so we'll have to wait and see what the new day brings.  The chart shows at a glance why pulls are not yet out of the woods with respect to the 1425.00 downside target. It will remain theoretically viable in any case as long as 1525.80 is not exceeded to the upside. _______ UPDATE (Nov 14, 7:49 p.m.): A timid, three-day rally has generated some minor impulse legs, but the burden of proof remains on bulls for now. The 1425.00 downside target is still a good bet to be reached, but odds would lengthen if buyers can push the futures above the 1491.10 peak shown here.

The glue-sniffers are loosely in command, driving AAPL toward a 283.97 target that has kept us from getting too bearish on the stock market.  We've used the target as a lodestone, confident that AAPL would eventually get there. And it will, perhaps sooner than we might have imagine ind after its canny handlers let it fall nearly 40% a year ago, temporarily crushing expectations .  There  were a dozen good reasons to dump the stock at the time, or so it seemed.  Apple's move into streaming content, for one. The  sector is getting very crowded, and Netflix may have upped the ante for creative talent to a level where even they won't be able to turn a profit. There are other factors working against Apple as well. The iPhone replacement cycle has lengthened because there have been fewer revolutionary changes from one model to the next. Also, competitors such as Huawei are offering comparable smartphones at significantly lower prices. Despite these negatives and many others, the stock looks hellbent on 283.97, at least.  The target is very likely to produce a tradeable pullback, which would imply that the broad averages will be falling in sympathy. For now, to leverage what remains of the uptrend, and to cushion our risk when we get short, I'll recommend buying the Dec 13/Nov 22 285 calendar spread eight times for 0.50, contingent on the stock trading 264.00 or higher, day order. If you buy it, plan on rolling the spread each Friday by covering the short calls and shorting new ones tied to the next week's expiration. If the stock continues to rise on each successive Friday between now and December 6, we will ultimately be able to take in more in premium than we have paid for the long Dec 13 calls that

Gold and silver prices look primed to turn higher after getting pounded for the last two weeks.  Does that mean stock prices, which usually move opposite bullion's, could top out at or near these levels? The chart provides good reason to think so -- or to hope so, if you believe shares are overdue for a breather. The E-Mini S&P futures will be challenged to get through the trendline shown. It comes in at around 3119 and will rise to 3125 next week. My gut feeling is that these numbers are sufficiently 'magnetic' to use as minimum upside objectives for the near term, but also as firm resistance points. Don't count too heavily on Tuesday night's full moon to reverse the bullish tide in stocks, however. According to a subscriber posting in the Rick's Picks trading room, lunar cycles correlate with reversals in gold, not shares.

Shhhh. I've refrained from drum-rolling the 1447.50 correction target (see  inset) because it looks so likely to produce a precisely tradeable bounce. I didn't want to queer the opportunity by giving it too much attention, but now you won't have to worry about bumping heads with the riff-raff. Friday's weak rally did nothing to change the odds that the futures will get there, but how far and how long the bounce goes is unknowable at the moment. The chart appeared here last week, but I didn't explain why the pattern is so enticing. Mainly, it is a matter of the A-B impulse leg exceeding a true external low at 1488.90. This set-up is textbook-perfect, and subtly so, and that's why it behooves us to make the most of it. _____ UPDATE (Nov 11, 9:15): My forecast caught the intraday low within $1.40, but also the tradeable bottom of a so-far $10 bounce. Only two subscribers mentioned this, so I have not established a tracking position.  If you would like me to continue following gold futures, please say so in the room so that I am able to gauge interest in them. ______ UPDATE (Nov 12, 7:48 p.m.): Subscribers were able to re-use the 1447.50 target to bottom-fish for a second straight day. Monday's gambit yielded a theoretical, four-contract gain of slightly more than $3000; today's could have netted as much as $5000.  Check posts in the trading room between 10 and 2 if you're skeptical these trades worked for-real. The rally was continuing Monday night, but it would need to surpass  1467.40 to imply it's about to get legs. Subs should have cashed out half of the position by now in any case, with the remainder tied to a wide 'impulsive stop-loss' on the 15-minute chart. At the moment, that

Although some notable long-term bond bulls are close to throwing in the towel as U.S. Treasury yields continue to climb, the chart suggests the bull market begun nearly 40 years ago still has farther to go.  Yields on the long bond settled Friday at 2.41%, up from 1.90% in August, while T-Notes have gone from 1.43% to 1.93% over the same time. The rallies have been impressive if not to say scary, since they have subjected hundreds of trillions of dollars of borrowings to a deflationary turn of the screw. The burden of debt promises to lighten before it becomes fatal , however, when the uptrend in interest rates reverses. Is This a Good Thing? Hidden Pivot analysis says relief could come soon, with the 10-Year topping at 1.984% and the 30-Year at 2.477%. How far might they fall thereafter?  My forecast calls for major lows at, respectively, 0.84% and 1.64%. This implies that the negative-rate weirdness of Europe will not afflict U.S. debt. Is this a good thing? Don't ask the 'experts', because they don't understand negative yields any better than the news media hacks who write about it.  Sub-zero yields reflect the central banks' increasingly desperate efforts since the 1990-91 recession to avoid a catastrophic deflation. Predicting they will fail is not exactly rocket science, even if not one observer in a hundred expects this.

Although a Warren victory would be an unqualified disaster for the stock market and, arguably, for America, it's harder to imagine what a Bloomberg presidency might look like. The left-leaning billionaire entered the race on Friday by filing for the Alabama primaries. This is a change of heart from a few months ago, when the news mogul announced he had no plans to run. He has stepped in because he's concerned that none of the leading Democrats could beat Trump. He may be right, especially since Warren shot herself in the foot -- and  chest, and head -- last week by spelling out exactly how she would pay for 'Medicare for All'. How's That Again, Liz? If there were any doubts that her ideas were hatched in the fever swamps of socialism, they have been dispelled by what she revealed of Warrencare. For starters, and as we already knew, everyone in America with an employer-based health plan would lose it. Billionaires like Bloomberg supposedly would pay for it, but if funding came up short, policy tweaks would make up the difference. How's that again?  Here's Warren in her own wonky words: “I will use available policy tools, which include global budgets, population-based budgets and automatic rate reductions to bring it back in line.” Are you reassured? Even Piketty, the French leftist whose ideas Warren has borrowed from promiscuously and plagiarized, must be embarrassed by such claptrap. Bloomberg, at 77, is a year younger than Sanders but robust and seemingly in good health, so age would not be a major factor. He could run a much better race against Trump than any of the current Democratic frontrunners -- Warren, Sanders, Biden and Buttigieg. Unlike them, although Bloomberg is a meddlesome liberal who would want to intrude heavily on every area of

I'd suggested rolling the calls we held last week to this Friday's expiration, but I'll track the trade only if I hear from at least two subscribers who did it. Otherwise, let's plan on buying if and when VXX falls to 15.66, the next bear-market target of consequence. This Hidden Pivot is more compelling than the last (19.15) because the A-B impulse leg that created it actually exceeded a major low.  There are no precise confirmations at p, but the pattern did generate a mechanical short at the green line in August that would have been very profitable for a seller of call premium. (No one has ever made a dime buying put options on VXX even though it is falling, falling, falling most of the time.) It's hard to believe VXX could fall as low as 15.66, but that's what happens when a bull market never sells off for more than a day-and-a-half like this one. ______ UPDATE (Nov 21, 10:20 p.m.):  With sellers dominating the stock market lately, it seems unlikely that VXX will fall to the 15.66 target any time soon. We'll keep it mind nonetheless but forego any trading in this vehicle unless the opportunity looks exceptional. _______ UPDATE (Nov 26, 8:02 p.m.):  The 15.66 target is once again within easy distance, so plan accordingly.  If it's hit today, buy four Dec 6 16 calls. They should be trading for around 0.40, but pay no more than 0.43 unless I tell you otherwise. _______ UPDATE (Nov 30): More detours and delays. Do nothing further for now, since we only buy this sucker-bait when it is hitting significant Hidden Pivot lows. _______UPDATE (Dec 13): Based on timely recommendations I made in the chat room, I have established a tracking position that includes four (or a multiple thereof)

The Morning Line commentary for today references a 3107 trendline target for this vehicle, but we may be able to come up with a more precise top using Hidden Pivots. The trendline connects two peaks, but with an alternative second peak that would raise the trendline shown by about six points to around 3113. It is rising with a slope of about $3 per day. Now here's where the analysis gets interesting. The Hidden Pivot chart (see inset) projects a target at 3128.50 that has been validated by today's precise pullback from p=3097.75.  This implies that if and when the futures close above p, or trade more than a few points above it intraday, they will become a good bet to reach 3128.50 exactly. If it happens on Wednesday, that would be in nearly perfect alignment with the trendline. ______ UPDATE (Nov 13, 4:20 p.m.): The trendline will come in Thursday at around 3121, which is certainly not out of reach. Be ready to get short there, but if you'd prefer to buy put options instead, use 311.80 as a target in DIA. It is tied to the same trendline. _______ UPDATE (Nov 14, 8:05 p.m.): The trendline will come in at around 3125.00 on Friday. Putting the DIA trendline target aside, there's a Hidden Pivot target at 280.88 that you could short with a very tight stop-loss. Here's the chart.