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November 12, 2018 | Bear Market Will Require Trading-Style Changes

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.

Updates for all of the trading vehicles tracked below are bearish, implying that Monday’s hard selloff did not exhaust the downtrend. Even so, our two key bellwethers, AMZN and AAPL, are both closing on interim supports that look likely to evince tradeable rebounds. I am becoming less enthused by the day about bottom-fishing such supports, however, because two such attempts in AAPL over the last week seriously underestimated the intensity of the selling.  Old habits die hard, and we’ve become used to buying the dips in the FAANG/lunatic stocks even as we’ve disdained the buy-the-dips mentality that has prevailed on Wall Street for almost a decade. Because of the growing likelihood that stocks have entered a bear market, any bottom-fishing we do henceforth we’ll be more cautious than before. We’ll get more leverage, for sure, since short-covering rallies are going to be more vicious than ever; however, the risks of being wrong have increased commensurately.

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November 12th, 2018

Posted In: Rick's Picks

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