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October 11, 2021 | Has the Fat Lady Sung?

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.

If I had to pick one chart that shows why the bull market is probably not over, it would be the one above. To be sure, the 157.26 peak recorded by Apple shares a month ago was a great place for an important top to have occurred; this chart shows why. But THE top? I have my doubts. For if this were so, it would rank as one of the most visually boring summits ever achieved. For permabears who have waited patiently for a fitting climax to the most most insane bull market of them all, it would be like finding a WaWa Market at the top of a Himalayan peak they’d almost died scaling.

Setting the Hook

A few forecasters had precisely predicted a potentially important top at or very near $157, including your editor. Some of us even profited from put butterfly spreads purchased a month earlier that more than quintupled in value with AAPL’s 12% drop so far. But it could be pressing one’s luck to hold out for more, since the downtrend seems to be struggling increasingly and made no progress at all last week. Perhaps the selloff will turn nasty in the week ahead. But if so, keep in mind that a plunge to the green line would actually be bullish, tripping a ‘mechanical’ buy signal based on Rick’s Picks’ proprietary Hidden Pivot Method.  It would also imply an eventual rally to as high as 187.93.

This scenario is congruent with one I raised here last week — i.e., that the stock market will rally to yet one more record high, setting the hook in bulls and short-covering bears alike. A steep plunge in the weeks ahead would make a reversal to new highs even more persuasive, and therefore more deadly. Whatever happens, AAPL is still the 300-pound diva whose final aria will signal the end of the bull market begun nearly 13 years ago.

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October 11th, 2021

Posted In: Rick's Picks

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