Rick’s Picks

Wednesday's strong upthrust tripped a buy signal at 209.27, putting a 242.57 target theoretically in play. It's not an even-odds bet to be reached, although the 220.37 midpoint pivot is. Accordingly, I'll suggest using it as a minimum upside objective for now, and it may even afford us an opportunity to get short with risk very tightly controlled when it is reached. Your trading bias should be bullish in the meantime, alert as always to any 'camouflage' set-ups that occur on the lesser charts. Buyers' interaction with p will deserve our most diligent scrutiny, since it could tell us whether a bull market that has depended on AAPL for leadership has any juice left._______ UPDATE (Nov 10): A week of flailing around generated a bullish impulse leg on the hourly chart, but it looks too delicate to survive. Look for more flailing as the week begins, then something more decisive on Tuesday or Wednesday. There may be a trade in the offing, so stay close to the chat room if you care.

When I projected a 549-point Dow rally here Tuesday night, I wasn't expecting it to unfold in a single day. The actual gain was 545 points, an exuberant reaction to a midterm election that will split power on Capitol hill between the two parties. The rally left the Industrial Average exactly 771  points shy of the record-high 26961 achieved on October 3, but I'd need odds to bet that it won't be reached. If so, and the blue chip average makes a presumably marginal new high, we should look for ways to get short, since many factors weighing on the stock market before the election will still be present. They include a strong dollar that will hurt the earnings of multinationals, an incipient collapse in residential real estate, rising interest rates and corporate earnings that may have peaked. In addition, any further gains from pro-business legislation on Capitol Hill are unlikely, since Trump's legislative agenda will be stymied by a House now ruled by anti-business Democrats. Under the circumstances, Wall Street's celebration could prove to be short-lived.

It's 8:24 p.m., and traders have yet to guess the outcome of the mid-term elections. The E-Mini S&Ps are up a few points, suggesting the results are perceived on Wall Street as a coin toss at the moment. We can expect traders to do much better this time in discounting the possibility of a big win for the Democrats, since the day began without the brash certitude about a Hillary victory that characterized election night coverage in 2016. My hunch is that if the E-Minis are up by 18 or more points later this evening, it will correctly signal that the Republicans have held onto their majority in both houses. Conversely, if the futures are down by 18 or more points, that will tell us -- again, correctly -- that the Republicans have lost the House and possibly the Senate.  There are some key Congressional districts causing index futures to fluctuate nervously as I write these words: Virginia's 10th; Kentucky's 6th; and Minnesota's 3rd, to name just a few. Watch 'em and place your bets!

I hesitated yesterday to hazard a guess about the next big move, but it now appears the Indoos are torquing up for a possible 549-point romp. However, this would be predicated entirely on an easy and decisive push past the 25,629 midpoint Hidden Pivot resistance shown (see inset). This is a big 'if' at the moment, since the DJIA will surely tank if Democrats take the House. The over/under bet is prohibitively expensive if DIA straddles are used, so we'll repair to the sidelines and await the election returns like everyone else. For investors, tonight's vigil puts one in mind of the science fiction film that ends with uncertainty over whether a meteor will collide with Earth or miss it by an inch. For investors, a big night for the Democrats would be almost as bad as the meteor hitting smack dab in the middle of the American heartland.______ UPDATE (Nov 7, 9:15 a.m.): Here comes that 549-point rally!  My friend Larry Amernick, a technical forecaster, explained the stock market's blase reaction to the election as follows: The investigations and impeachments the Dems have threatened will go nowhere, and ratcheting up their nastiness won't phase Trump. Legislatively, they will destroy their chances in 2020 and ensure Trump's reelection if they are perceived as too obstructionist. They are no longer the opposition party and will thereforeneed to Do Something legislatively. They now completely OWN Obamacare, and the Republicans can sit back and relax. Pelosi, Waters et al. can't do any real damage with the GOP firmly in control of the Senate. Etcetera.

Election day at last! The results are certain to have a profound impact on investors' outlook for the economy, although no one can predict with confidence how things are about to turn out. My gut feeling is that Republicans will win big, rebuking a mainstream media whose polls are just as fanciful as they were in 2016. Regardless, if it appears that Republicans have retained a majority in both houses, stocks will move higher -- probably sharply so for at least the first couple of days. If the GOP holds only the Senate, stocks will fall, possibly hard; but if the Republicans lose the upper house, be prepared for the worst -- i.e., the 'Trump rally' in reverse. Scorched-Earth Policy The Democrats have promised a scorched-earth policy that will make Sherman's March through Georgia look like the hokey pokey. Even if they don't impeach Trump, they'll launch endless investigations as pointless, destructive and draining as the Mueller probe. The consequences for the U.S. economy, and for governance itself, would be so grave as to be almost unimaginable.  Indeed, the reason I believe Republicans will carry the day is that most voters deeply understand what a panoramic catastrophe it would be if the likes of Nancy Pelosi, Maxine Waters and Chuck Schumer are put back in charge. Even their supporters must know that a violent lurch to the left couldn't possibly be good for the country -- not that such thoughts will be on their vengeful minds when they pull the lever on Tuesday to vaporize Trump, his supporters and all they stand for.

Pivoteers may have noticed that the rally from the October 29 low at 2603.00 tripped a 'counterintuitive' (CI) buy signal the next day when it touched the green line (see inset). A key test of bulls' resolve will come if and when they reach the midpoint resistance at 2775.13 shown in orange. I strongly doubt they will exceed it by much, assuming they even get there. In any event, we'll stay alert to a possible shorting opportunity at that level by monitoring price action on the lesser charts. Stay tuned to the chat room and enable your account for 'EMail Notifications' if you want to stay apprised in real time._______ UPDATE (Nov 7, 9:23): Bulls, reflecting on the election results, have somewhat exceeded the 2775.13 'hidden' resistance. This is mildly bullish and has put a 2947.25 target theoretically in play.

There are a dozen good reasons why we should be sounding 'taps' for the bull market. But not quite yet, perhaps, with AAPL setting up for what could prove to be a strong last-gasp rally. Why does this seem likely? For one, Friday's 7% plunge was a transparent fraud, engineered by portfolio managers who are eager as always to accumulate more Apple shares at bargain prices. How so? The company reported the usual record earnings on record sales, but its handlers, with the help of their stooges in the press, got the herd to focus on side-issues that should have been of little concern. For one, the company will no longer report hardware sales separately. This change in accounting protocols was described by the news media as an obfuscation, but it merely reflects a shift in emphasis toward the company's growing stream of revenues from services. For two, the downbeat forecast for the holiday season turns out to have been not so much downbeat as simply slightly less-than-glowing. It was instant stampede nevertheless -- fomented by the usual, useful idiots. Mau-Mauing the Hayseeds So that was the 'bad' news, and the smart guys who shamelessly work this stock 24/7 leveraged it to scare widows, pensioners and hayseeds out of their shares.  All of this is not to say AAPL is about to rocket to new record highs. Considering the headwinds the stock market faces from a strengthening dollar, higher interest rates and a collapsing housing sector, it will be increasingly difficult for the Masters of the Universe to sustain the illusion that all is well with the U.S. economy.  But it is not as though they will have to hoist the broad averages higher all by themselves -- only AAPL, the world's most valuable company. AMZN will mechanically follow suit,

We were using a 25,956 rally target on Friday after the Indoos pushed past a lesser Hidden Pivot resistance at 25529. However, the failure of the rally top to exceed the external one at 25,608 recorded on October 19 put the uptrend temporarily in jeopardy, triggering a 'CI' short at 25,207 on the subsequent selloff. It projects to a minimum 24,835, a midpoint support tied to a 'D' downside  target at 24,092. A tradeable bounce from very near p=24,835 seems very likely, so be ready to bottom-fish there with a very tight stop-loss. The equivalent support in DIA, which is optionable, lies at exactly 248.14._______ UPDATE (Nov 5, 5:39 p.m.): What can one say on a day when the Dow has risen nearly 200 points while the erstwhile darlings of the digital world got savaged? Knee-jerk rotation was the completely dominant theme, but there is little point in trying to predict its course until after the election results are in.

Last week I suggested pinning all of our hopes for the bull market’s continued longevity on Apple, the world’s most valuable company. The stock’s savvy institutional handlers will do everything in their power to keep it buoyant — meaning the huge losses they sustained as a result of last Thursday’s selloff are about to be recouped and then some. Be prepared to marvel at how DaBoyz erase all memory of the mildly downbeat news that triggered the cascade, then rally AAPL so that millions of shares can be distributed to widows and pensioners at prices above the last peak. These guys are really good, and we should always consider this when we see stocks fall out of bed for reasons that don’t quite add up.