- the source for market opinions


June 18, 2023 | Frustrated Bear? Temporary Relief Is on the Way

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.

When will the rampaging bull run out of steam? A good question, considering how Wall Street has been flouting a slew of good reasons for the broad averages to be at multiyear lows rather than revving up for a shot at new record highs. Two destructive juggernauts in particular are bearing down on the economy with such force that only investors in a far-gone state of madness could contrive to ignore them. For one, an epic collapse in commercial real estate is well under way that will flatten the economy for decades. And for two, the most extreme yield-curve inversion on record is predicting a commensurately extreme recession.

Under the circumstances, it would seem logical for traders to short into the stock market’s show of bravado. So far, however, this strategy has brought only pain, along with the sight of stubborn bears being carried out in body bags. “This is starting to get out of hand,” remarked a bruised and battered Rick’s Picks subscriber in the chat room the other day. “What’s the latest [Hidden Pivot] for a topping call. At least an intermediate top?”  You can access my precisely detailed response by clicking here, but the bottom line is this: Two bellwether stocks have at least somewhat higher to go before they, and presumably the entire stock market, are ready to keel over from exhaustion.

A Setback, then Higher

Specifically, MSFT has a 5% rally ahead of it before it reaches a potentially important top, and AAPL an additional 3.6%. These figures are based on Friday’s close and differ slightly from the ones given in the recording, a tech analysis session that includes some nifty tricks you can try yourself with put and call options.  The precise price targets for the two stocks lie, respectively, at 360.02 and 191.73. Jot these numbers down if you trade the stocks, because both are capable of stopping the running of the bulls in its tracks.

But only temporarily, I should warn you. That much is clear in the long-term Microsoft chart above. Although the imminent selloff could be brutal, I expect the broad averages to come roaring back to challenge the lofty highs recorded at the beginning of 2022. That’s why I would suggest taking partial profits early and often as stocks recede from the rally targets as we should expect.

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the Weekly Recap.

June 18th, 2023

Posted In: Rick's Picks

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site


This site uses Akismet to reduce spam. Learn how your comment data is processed.