Rick’s Picks

The pattern shown, with a 2851.75 rally target, is unappealing because of the 'sausage-y' impulse leg. However, because there are no good alternatives, we'll use it for now to calculate a minimum upside objective and some buying levels. The set-up so far is not conducive to a mechanical bid, and things are unlikely to improve sufficiently to provide an easy entry point. Our bias should remain bullish for now nonetheless, with a focus on intraday opportunities. _____ UPDATE (Feb 12, 7:43 p.m. ET): Just to get ahead of any possible "surprises," let me mention that a plunge to 2672.35 from these levels would trigger a 'mechanical buy', stop 2612.25. _______ UPDATE (Feb 15, 9:06 a.m.): Here's a fresh rally target at 2789.25. It is derived from shifting to a lower and more compelling point 'A'.

AMZN has stopped out a 'mechanical' long as we'd expected after failing to find traction last week for three consecutive days. The new chart shows a fanciful target at 1842.24, but it will shift lower if the stock falls even moderately on Monday. Otherwise, a print at 1635.63 would put the target theoretically in play while tilting our short-term bias ever-so-slightly bullish. DaBoyz appear to be biding their time, waiting for the next short-squeeze opportunity. The stock is expensive to heft, and that's why we'll see it move higher only when sellers are confident they'll do best by simply stepping out of the path of panic-stricken bears. At the moment, there's no hint that such an animal even exists._______ UPDATE (Feb 12, 7:48 p.m. ET): Today's rally put the 1842.24 target in play. More immediately, we'll use p=1704.50 as a minimum upside objective for the near term.________ UPDATE (Feb 21, 6:21 p.m.): Zzzzzzz. AMZN feels leaden, but nothing has changed. It would take a drop below 1566.76 to invalidate the 1704.50 target. ______ UPDATE (Mar 4, 11:47 a.m.): DaBoyz trapped bulls with a gap-up opening that peaked a visual millimeter above p=1704.50. That could be it for a while, but if the stock surprises with a second-wind burst, closing above p, it would signal an impending run-up to at least p2=1773.37.

Although we usually come to our trading desks Friday morning intent on fading the opening bar with the purchase of put or call options, there was little to inspire this as the dust settled on Thursday. Was the weakness signaling a reversal of a rally that has been relentless since Christmas Eve? If so, we're not likely to see put options on sale at the bell. It also means that the Dow's 220-point plunge could provide a running start for even more serious damage as the week ends. Brace for an interesting day in any event.

Like many of you, I've been eagerly awaiting the day when this powerful bear rally drops dead. Instead, AAPL has rallied with a vengeance, drawing a thousand doomed stocks into its vortex. Yes, the rally is a hoax. And yes, the Masters of the Universe have used it to distribute as much stock as possible into the hands of rubes, pensioners and widows. Under the circumstances, I've been a reluctant bull all the way up, duty bound to follow the mechanical logic of my charts. However, the effort has worn me out, and that's why I've selected the thumbnail chart today that I did (click on inset). It gives me the wherewithal to say that maybe, just maybe, the insidious promoters of the Big Bounce have breathed their last. That Ominous Cough? This is a logical inference, given that the E-Mini S&Ps have begun to roll down from a midpoint Hidden Pivot at 2732 where buyers were likely to cough ominously, if cough they have. The pattern itself is unfortunately not of the highest quality, and so I am prepared to see stocks come roaring back next week -- led, of course, by AAPL, whose iPhone troubles have suspiciously melted away in recent weeks. If that is what happens, I hope you will pardon this digression. Think of it as a fleeting moment of sanity in a crazy world.

Wednesday's asphyxiating tedium was a reminder that DaBoyz are in no rush to take stocks higher, especially if the short-covering needed to do so is absent. Usually, bear buying-binges are driven by "good" news. On this particular day, however, the headlines concerned a State of the Union speech that held little interest for Wall Street. Toss in the usual bilge concerning political bickering, Mueller's supposed investigation and such, and you begin to see why ginning up a rally would have been so difficult. Nevertheless, the chart of AAPL (see inset), which has regained its leadership status as the bear rally has progressed, looks constructive. One could argue that the stock, as well as a few others controlled by institutions, are in a bullish holding pattern pending "news" capable of goading bears into doing some heavy lifting. It's hard to imagine what the news will be, although rehashing the Fed's policy shift toward "not tightening" has gotten fabulous mileage so far.

DaBoyz are nothing if not risk averse, and so there will always be days like Wednesday, when the short-squeeze thrusts they use to force stocks higher will pack barely enough energy to lift a feather. That describes the session's soporific price action, an inside day that left a 2760.25 target unchanged as our minimum upside objective. (Note: That's slightly higher than the number given here earlier because I've moved an erroneous coordinate.)

We'll bleed from the ears if Wall Street's bull-market shills amp up the hype any louder. Consider this brazen bit of flackery masquerading as news Monday at YahooFinance.com:  "A Morgan Stanley...analyst sees huge upside for Apple stock based on the tech power’s ability to roll out new services in 2019, which includes its streaming TV platform that aims to take on Amazon and Netflix."  Ahhh, just what TV-watchers so urgently need: a brand-new player to offer us yet more shows, each accompanied by enough in-our-faces marketing to convince us it is worthy of our time. Let me save you a dozen precious hours, lest you be fooled into thinking the latest overhyped offering from Netflix, Russian Doll, is the "brilliant black comedy" proclaimed by one giddy reviewer. Brilliant it ain't. But don't trust my taste. Try watching the first episode and judge for yourself. A Bidding War Nor does throwing huge sums of money at "content" guarantee brilliance, let alone create shows that are entertaining and that attract large audiences.  And therein lies the problem for the biggest players in the streaming world. Netflix paid comedian Chris Rock a reported $40 million for two TV specials. What will it cost Amazon, Disney and HBO to one-up them? And even if they succeed, can they make enough money at it to pay the talent and retain sufficient profits to justify the rich earnings multiples that entertainment companies currently command?  It's doubtful. Netflix's competitors, far from licking their chops, are undoubtedly fearful of escalating a bidding war that is already coked-up on hubris. If the top is not already in, it soon will be.

DaBoyz are putting most of their energy and effort into a relative handful of institutional favorites (aka  "lunatic stocks"), including AAPL, BA, FB, NKE and GOOGL. The goal of the stock market's masters is to waft the broad averages higher using short-covering for fuel, and to distribute as much stock as they can ahead of the next big downdraft. They've been quite successful at it so far, producing a record-breaking January. How long can they keep it up? For at least another 400 Dow points, assuming my forecast for the E-Mini S&Ps pans out. Currently trading for 2717, they look bound for a minimum 2759. This might not prove to be the top of the bear rally, but it could stop the buying spree long enough for us to squeeze off an opportune short.

A chaotic swirl of geopolitical news has made crude an extremely difficult read at the moment --the perfect time to cut to the chase with a single revealing chart (see inset). It shows an uptrend likely to continue to at least 58.76 over the next 7-10 days, so plan accordingly. Because the A-B impulse leg is not of the highest quality, I can't guarantee the target will work perfectly. However, it should come close enough to nailing a tradeable high to allow you to use a stop-loss as tight as 0.15 to get short. The trade is recommended only to those who have made at least $800 on the way up. A pullback first to the green line (52.94) would trip a not-very-enticing mechanical buy signal, stop 50.99, but it could be converted to a less risky 'camo' set-up if desired.