Rick’s Picks

The S&Ps and Nasdaq 100 have fallen moderately after overshooting important Hidden Pivot rally targets on Monday that I might have warranted as impenetrable.  This is bullish, as is the fact that AAPL, our #1 bellwether, still has an outstanding target about 10% above current levels.  Even so, and despite the fact that the U.S. economy has "never looked better," we shouldn't be too trusting of the rally. The chart shows that VXX, which tracks short term volatility in the S&P 500, may have reached an important bottom. If it is about to reverse, that would imply stocks are about to fall. I trust this indicator more than I do all others at the moment.

So-far moderate selling in after-hours trading stalled precisely at p=3070.75, but we should look for a move down to at least d=3063.50 if that Hidden Pivot midpoint support gives way. If you want to bottom-fish against the trend, a stop-loss as tight as 3062.75 should suffice. My bias remains bullish due to the 10-point overshoot of a 3075.75 rally target drum-rolled here earlier.  The target was sufficiently clear and compelling that it should have repelled buyers, and precisely so. The fact that it didn't is evidence that they are still out there, eager to jump aboard but in need of a breather.  Let's see whether a fall to d=3063.50 provides one. If it gets trashed, that would shift the minor trend to bearish. ______ UPDATE (Nov 6, 11:01 p.m.): The futures rallied 15 points after bottoming at 3063.00, two ticks below the target furnished above. The move was worth as much as $750 contract, but only one subscriber has reported acting on it so far.

What are we to make of Wall Street's exuberance over recent news concerning a U.S. economic expansion that refuses to die? Employers are hiring, consumers are spending and business is humming despite a dramatic economic slowdown in Asia, Europe, South America and elsewhere. Perhaps America really is an economic island, one blessed with unstinting support from a central bank that has finally succeeded in taming the business cycle?  If you are too young to remember the last three or four recessions, you might actually believe that things are different this time.  Wall Street Journal columnist David Harrison evidently does. Judging from his picture, Harrison is no older than 30, so we can perhaps forgive him for suggesting, to borrow Prof. Irving Fisher's immortal declaration, that economic equilibrium  appears to have reached a permanently high plateau. In fairness, it must be said that Harrison's recent think-piece, A Bellwether No Longer Rings True, makes a good statistical case for downgrading manufacturing as an economic harbinger. He notes that although factories have had a tough year marked by falling output, investment and employment, as well as a global tariff war that threatens to drag on indefinitely, the U.S. economy overall has barely flinched. This happy if surprising state of affairs he attributes to manufacturing's shrinking share of the economy.  In its place, a burgeoning services sector has inoculated the U.S. against downturns, balancing out the inventory swings that have long been associated with boom and bust cycles. Misleading Statistics Or so the argument goes. But the suspicion nags that the rosy statistics do not yield an accurate picture. To be sure, a lot of fat cats have grown their wealth stupendously by holding shares in companies that on the surface seem to be doing amazingly well. And yet, two obvious examples, Facebook and

A potentially important rally target at 3069.75 broached here earlier still looms. However, there is another of even larger degree at 3075.75 (see inset) that has come into focus and which needs to be taken into account. Together these two Hidden Pivots would apppear to pose such daunting resistance as to make an easy move past them improbable. Thus, with a potentially tradeable top slightly above, I'll recommend taking a speculative short position using any means that suits your style. Stay tuned to the trading room for more-detailed guidance, since opportunities to get aboard using put options in SPY or DIA could develop intraday. The latter has rally targets at 274.14/274.44, 276.90 and 280.88, but only the last corresponds to the pattern used to project 3075.75. Recall that we have a corresponding target in AAPL at 283.97 that can be used to bet speculatively on an important market top. _______ UPDATE (Nov 4, 5:26 a.m. EST): The glue-sniffers are running the show, having wafted the futures decisively past 3075.75 in pre-dawn trading. We'll stay out of their way for now, but if you've held a position on the way up, you should be out of 3/4 of it by now. _______ UPDATE (Nov 4, 4:53 p.m.): Buyers didn't exactly shred the 3075.75 resistance, but they did exceed it by a not inconsequential eight points, and the pullback so far has been shallow. Bulls deserve the benefit of the doubt for now, but let's see how they do on 'turnaround Tuesday' before we resort to wishing them ill.

As predicted, AMZN easily recouped losses incurred during last week's shakedown on earnings news. DaBoyz used the dog-bites-man story of the month -- Same-Day Deliveries Crimp Profits! -- as an opportunity to steal shares from widows and pensioners at fire-sale prices. The trampoline bounce that ensued has tripped a theoretical buy signal at the green line (1773.79) and put p2=1862.52 in play as a minimum upside objective for the near term.  The target looks like it's in-the-bag, but call options are too juiced to offer much edge. _______ UPDATE (Nov 5, 5;35 p.m. EST): A so-far mellow correction off Monday's 1815 high looks bound for p=1796.88, or 1787.25 if any lower  (60-minute, a= 1813.25 on 11/5 at 6:00 a.m.). _______ UPDATE (Nov 6, 11:04 p.m.): The selloff reversed from 1788.58, just $1.33 from the correction target given above. The first rally resistance lies at 1803.45 (5-min, A= 1785.52 on 11/1 at 3:05 p.m.) _______ UPDATE (Nov 7, 8:46 a.m.): DaBoyz gapped AMZN past p=1803.45 on zero volume at 5:00 a.m. Nice work, guys. This means D=1818.12 is, like, 99% likely to be reached, probably sooner rather than later. ______ UPDATE (Nov 11, 9:28 p.m.): If AMZN continues to fall, you can use this 1754.35 target to bottom-fish._______ UPDATE (Nov 12, 8:08 p.m.): This morning's feint higher turned the hourly chart bullish, but not very. Look for more upside now to 1781.32, or to 1790.73 if any higher. ______ UPDATE (Nov 13): The stock has gotten boring and no one has mentioned it in the chat room, so I'll be removing it from the home page for a spell.

Gold has been stalled for three months and is getting mighty tiresome. This is notwithstanding an upthrust last week that allowed subscribers who followed my detailed guidance to make a quick $3400 profit on four contracts. The trade was pegged to a 1535.90 target that has helped keep us on the right side of the trend for nearly a month.  If buyers should push past it this week, 1547.60 would be the next stop, and thence 1586.10 (daily chart, A=1412.10 on 8/1). Rather than pretend we have a crystal ball, we'll simply wait to see what bulls can deliver. So far, considering stocks are in the grip of lotus eaters, bullion has held its own. This is encouraging, but don't expect much until the bull run in stocks falters. _______ UPDATE (Nov 5, 5:41 p.m. EST): The high and low of gold's dive today fell within the tedious range of the last month and has not damaged the pattern projecting to our aging target at 1535.90. Psychological damage is another matter, since the selloff, possibly gratuitous, has occurred in the space of just one day. But if we stay focused purely on 'technicals', there is not yet any reason to despair. _______ UPDATE (Nov 7, 10:42 p.m.): Sure this is depressing. But even if the so-far $100 selloff from early September's high had been three times as bad it wouldn't negate the huge bull move that began from 1208 fifteen months ago.  This nasty correction has a little farther to go before it hits a Hidden Pivot support that could turn gold around. It lies at 1447.50 and can be used to bottom-fish.  It can also serve as a minimum downside target for the moment.

We gutted it out last week to stay long through a swoon that left GDX little changed from a week earlier. The partial profit we took on half the position gives us 200 shares with an adjusted cost basis of 26.77. Friday's punk performance lagged physical gold, which was up nearly $5 at one point. GDX never went 'green', but it is not likely sit still if bullion's rally resumes or picks up steam in the week ahead.  In any event, offer 100 shares to close for 28.60, o-c-o with a stop-loss on the position at 26.78. If GDX takes out the 26.18 point 'C' low of the pattern, we'll look to re-enter at the first good opportunity. _______ UPDATE (Nov 7, 10:54 p.m.): We were stopped out at 26.78 for no loss or gain. GDX has yet to break down as badly as gold futures, although this will come as scant consolation to those who've held a long position in this vehicle. I'll recommend waiting for a washout down to this 25.22 target before buying. We can adjust if GDX reverses without falling that far. ______ UPDATE (Nov 13): I've asked for help crowdsourcing an opportune 'buy' point for this banana slug. If you're keen to trade it, please leave an actionable idea of your own in either of the chat rooms. ______ UPDATE (Nov 17, 7:44 p.m.): Bears' unimpressive struggle to push GDX lower is starting to seem pathetic. This is ostensibly bullish, but I have little enthusiasm for simply taking a flier. If there's good interest in this stock in the chat room, I'll happily contribute to the discussion and vet actionable ideas.  ______ UPDATE (Nov 18): There was just one mention of GDX in the two chat rooms today -- by 'Johnfed', a new subscriber who

We took a small position in Nov8 21 calls Friday, paying 0.14 for four of them (or a multiple thereof).  The trade was predicated on an expected turn from the 19.15 target shown. This Hidden Pivot support is not of the finest pedigree, since the A-B impulse leg from which it was derived has a point 'B' low that is about as sausage-y as they get. Even so, the target looks good enough to warrant a small, speculative bet, and it would be a little spooky if VXX doesn't turn from somewhere near here by mid-week.  The fact that it closed below the target, however, attests to the relentlessness of the wafting rally in the broad averages, including the S&P 500 index tracked by this vehicle. As with all option trades we do in VXX, you should have risked no more than you can afford to lose painlessly. _______ UPDATE (Nov 5, 5:52): VXX rose just enough to keep our calls alive. Offer half of them for 0.30 g-t-c, or slightly more than twice what we paid for them, as is our custom. I still don't mind being long calls pegged to Friday's expiration. I sure as hell would not be short them for 0.09. _______ UPDATE (Nov 6, 11:13 p.m.):  I'll suggest rolling into Nov 15 calls, again risking on this speculative bet no more than you can afford to lose comfortably.

I rarely update my dollar forecast because 1) my very-long-term outlook is unshakably bullish, and 2) subscribers do not trade it. Nevertheless, the dollar sold off hard last month, raising mild concerns about whether the long-tern trend has changed. A glance at the weekly chart, however, reveals little technical damage. Regardless, I'll need to start treating the chart as I would some trading vehicle I don't care about. Strictly speaking, a further decline touching the green line would put p=92.67 in play as a downside target. I refer to it as my worst-case scenario in the chart, but in fact 85.67, the pattern's 'D' target, would be the actual worst-case possibility. That is unimaginable to me, and so I've put it out of mind.  'Impossibilities' aside, I'll be watching for 'counterintuitive' buying signals each time DXY takes out a new low on the weekly chart. The nearest of them lies at 97.03, and thence at 95.84. _______ UPDATE (Nov 8): Interesting that a market as vast as the dollar should rally following a cheesy fake-out low that exceeded a previous one by a few cents.  That is what has happened, however, as this chart makes clear.  The rally would look more sincere if and when it exceeds the external peak at 98.65. _______ UPDATE (Dec 4, 6:44 p.m.): The greenback has taken a moderate fall after going no higher than 98.54, just 12 cents shy of our bullish trigger price. The weakness would become significant if it exceeds the 97.03 low recorded on August 9.