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February 20, 2022 | What’s Your Take?

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.

 

[The markets will be closed on Monday for President’s Day, but I am putting out fresh touts and commentary because DaBoyz are required to briefly let the beast out of its cage on Sunday evening. Up-to-the-minute updates from Rick’s Picks will resume on the home page and in the trading rooms on Tuesday.  RA ]

Technicians use charts to get a precise handle on trends and price reversals. However, even the unschooled eye can sometimes form a tradeable opinion by merely glancing at a chart. Does the one displayed above tell you anything that might be actionable? To my eye, and without resorting to any of the proprietary tricks that are possible with the Hidden Pivot Method, I see the Dow Industrials rolling over due to the presumptive weight of heavy supply. There are many reasons we could adduce for this; however, pondering ‘reasons’ would negate the value and usefulness of technical analysis, which shuns ‘reasons’ as mere noise in order to focus on how an infinitely complex conflation of ‘reasons’ are actually perceived and acted on by traders and investors.

The chart above does not make it possible to infer with confidence that a full-blown bear market is about to unfold. But there is still the visually intuitive sense that: 1) a major rally from these levels is unlikely; and, 2) a large drop is needed to form a base before spectacular new highs could conceivably be achieved.  Again, using only the eyes rather than the brain, how far do you think the decline would have to go in order for a base to form?  There is no correct answer, but my subjective eye ‘needs’ a selloff into the void between the pink and red lines. Respectively, the levels are a ‘secondary’ Hidden Pivot at 31,306 and a Hidden Pivot ‘midpoint’ at 26,762. If the Dow were to fall to the exact middle of that range, it would be at 28,899, a 16% drop from current levels. Drawing on my technical experience, I would say that that’s where the Indoos are headed at a minimum. Hidden Pivot voodoo can sharpen this outlook considerably, so stay tuned.

Let There Be Music!

For whatever reason, I’ve been streaming music at very high volume lately, and sometimes repeating tracks that I especially like 50-100 times. Here are links to two of my very favorites:  the incomparable Chucho Valdes, playing one of the the most beautiful piano solos I’ve ever heard, Estás en Mi Corazón; and Mark Ford, who cuts loose in the middle of Gimme Some with a riff that will blow your mind if you’re a blues harp junkie like me.

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February 20th, 2022

Posted In: Rick's Picks

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