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December 16, 2020 | Do You Smell a Top, or Just Kona Gold?

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.

I’d be lying if I told you I smell a top. That would be like noticing a fart in a coffee roasting plant. With exuberant expectations of stimulus until kingdom come, the aroma of Kona dark is all that investors detect when they sniff the air for the scent of trouble. After all, what could possibly go wrong?  Even at full-tilt war, Democrats and Republicans still agree on one thing — i.e., that the money spigot must remain open no matter what. They differ only as to a timetable and how many trillions of dollars should be force-fed into the economy in the next round.  Meanwhile, companies are so flush with cash that they don’t know what to do with it  — other than the obvious: buy back their own shares.  And now comes a vaccine said to render Covid-19 harmless in 94% of those who get two shots spaced weeks apart.

All this aside, I am not relying on my sense of smell — which is to say, my instincts — to warn of trouble just ahead. However, I do see distinctive topping patterns in the charts of no fewer than three important trading/investment vehicles that I track closely.  Subscribers should be familiar by now with the precise details, including price targets and some cheap ways to get short. Even if it turns out that I have overestimated the threat of a major selloff, you should still be on high alert. If a rally instead impales my Hidden Pivot resistance points, we can always go back in the water and surf Mavericks with the crazies.

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December 16th, 2020

Posted In: Rick's Picks

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