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December 29, 2019 | Little Room for Contrarians as Year Ends

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.

After watching the bull market break all the rules for the last ten years, we know better than to think that even the most formidable-looking technical barrier will slow it down for more than a day or two. Indeed, seldom have we seen prices fall for three consecutive days — a rarity even in the good old days. (Old-timers may recall that the October 1987 crash, when many traders might have thought the world was ending, lasted for buy two full days and a fraction of a third.) Still, it would be careless to ignore the double barrier which stopped the DJIA’s ascent on Friday: a Hidden Pivot resistance and a trendline that both trace back to the first quarter of 2019.  Instead of getting all worked up about the prospect of a healthy correction to end the year, however, we’ll simply assume that bulls are capable of holding things steady for at least a few more days, come what may. Since everyone expects this, or perhaps a continuation of December’s wilding spree, we should be on our guard against a (very) contrarian surprise.

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December 29th, 2019

Posted In: Rick's Picks

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