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August 20, 2018 | Buyers Chicken Out at a Crucial Threshold

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Buyers fell 11 points shy of surpassing late February’s key recovery high, an achievement that would have generated an impressive ‘impulse leg’ on the daily chart. The earlier peak lay at 25,800 versus Monday’s intraday high at 25790. My hunch is that they will get past it on Tuesday, or at least within the week. But as a practical matter, and to be very cautious, I will treat a marginal breakout as a possible shorting opportunity via a ‘counterintuitive’ pattern. Assuming the Indoos do not first exceed 25790, a signal to get short, using DIA puts, would trigger on a drop to 25,176. Stay tuned to the chat room for guidance in real time if you care.

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August 20th, 2018

Posted In: Rick's Picks

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