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October 29, 2018 | The ‘Lunatic Stocks’ Have Probably Bottomed

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.

Monday’s slow-motion selloff didn’t generate much fear, but it likely exhausted sellers for a while. Although I’ve put out a somewhat lower target in the E-Mini S&Ps for Tuesday, the big moves in the FAANGs appear to be over, or very nearly so. Rick’s Picks had been using a 1496 downside target in AMZN that came with a millimeter of catching the exact low of a so-far $68 bounce. (Click on the inset to see this graphically.) DaBoyz looked like they might want to revisit the low Monday evening, but they are going to have difficulty pushing the stock significantly beneath it, since it’s a clear and compelling Hidden Pivot support. Similarly, AAPL hit a longstanding downside target at 208.04 before trampolining more than $6 from just beneath it. A relapse is unlikely to exceed the low by much, and that’s why the issues I refer to as the ‘lunatic stocks’ — i.e., the ones most heavily owned by portfolio-managing chimpanzees — should be supportive of the broad averages over the near term.

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October 29th, 2018

Posted In: Rick's Picks

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