Rick Ackerman

The ‘affordability' issue percolated to the top of the news last week, but in a peculiar way. On the right, the debate was not about whether things in general are becoming less affordable for most Americans, as they unmistakably are, but whether the left has blown the issue far out of proportion to create a wave of discontent ahead of next November's general election.  The discussion was catalyzed by abysmal consumer sentiment numbers that registered lows not seen since the Great Depression. Trump courted controversy over this in an interview with Fox’s Laura Ingraham. The economy is going great guns, he declaimed, and what’s the problem? He then stepped into quicksand by owning an issue far more real than political. Although he didn't say these words exactly, what America heard was:  "I'm going to give you affordability like you won't believe." This is a promise he cannot possibly keep, and his stumble on this key issue eventually will be seen as the beginning of the end for boom times on Wall Street and the Everything Bubble. In stark actuality, the Second Great Depression has already begun for half of America. As my colleague Charles Hugh-Smith notes, the rich have grown increasingly wealthy from a price bubble in real estate and financial assets while barely noticing the descent of the bottom 50% into penury. “While the top 10% busy themselves with using AI to improve work flow, obsessing over geopolitics and the decay of their perks of their Titanium credit card, other Americans are concerned with finding a second or third side-hustle as the soaring costs of utilities, rent, auto insurance and repairs, childcare and healthcare are forcing choices nobody wants to make: What [necessities to forgo.]” The Best of Times?  Trump risks failure by amping up his spiel about how

It's a stretch to compare Magritte's famous painting to Microsoft's chart, but here goes.  The Belgian artist's point was that you could not stuff a two-dimensional representation of a pipe with real tobacco.  Should we therefore try to divine Microsoft's future just because its stock chart features an in-your-face double top? I read it as bullish because it's too obvious to be bearish. So, how should we trade it? A reverse-pattern, long-term rendition of the chart will simplify this task.  It is saying the stock will become a back-up-the-truck buy when it falls a further 13% to 431.89. I will also assume, speculatively at the moment, that a breach of the midpoint Hidden Pivot support (p=493.67) is very likely. When it happens, that will cue up p2=462.78 as our minimum downside objective. Worst case for the intermediate term: 431.89, the 'D' target. We can infer that the stock market's performance will mirror MSFT's. That means, although a sharp drop lies ahead for the broad averages, it won't necessarily signal the end of the nearly 17-year-old bull market.

Bears looked pathetic on Friday when they failed to crush the opposition following hard selling overnight. Even so, I continue to believe that stocks have entered a bear market. This implies that a 7057.50 target drum-rolled here earlier will not be reached. I am not chiseling this forecast in stone, however, and I'd suggest using the details of my 15:07 post in the chat room to follow the play-by-play yourself. The critical thing to notice about Friday's bounce is that it came from below the 'd target of the pattern shown in the chart (inset). The overshoot may not look like much, but it is significant in the context of an aging bull market that until now has produced weak corrective ABCDs. To determine how significant, keep a close eye on two 'hidden' impediments above: 6786 and 6918. The provenance of both is explained in my chat room post.

I don't usually post charts that display more than a single ABCD pattern, but the one shown gives a clear picture of how very unclear gold traders and investors are at the moment. Neither the large bearish pattern nor the small bullish one produced a decisive move through p, muddying the question of whether the next significant move will be up or down. Bears have a slight edge, I'd say, but it's based on technical trivia that's not worth explaining. For now, the worst-case target if the futures break down is still 3802.60, representing a 5% drop on top of the 8.5% loss since October 20, when Gold recorded an all-time high at 4398. ______ UPDATE (Nov 10, 12:47 p.m. EST):  The futures have broken out above late October's peaks. Trust this rally when it pushes above more important peaks ranging up to 4175.00 recorded between Oct 22-26.

I've shifted to a bigger picture that aligns with gold's, where indecision rules. Bulls have been stymied so far by a midpoint Hidden Pivot at 49.043 that precisely contained the last big bounce.  Now, they've got a running start to attempt once again to smash through. A success would put d=52.575 in play.  There's little point in trying to predict the outcome, but if the futures pop through p and then return to the green line (x=47.276), we should be prepared to bottom-fish there aggressively with a small-pattern trigger. Alternatively, a breach of C=45.510 would be bearish, although not necessarily fatal. ______ UPDATE (Nov 10, 1:14 p.m. EST): The futures have broken out today, impaling p=49.043 with sufficient brio to get them to d=52.575 eventually. Be careful up there, since this Hidden Pivot resistance does not look like it will surrender quietly.  There are significantly higher targets outstanding, so stay tuned for Sunday's updates.

GDXJ entered its third week in purgatory, unable to attract the buying power to wreck the corrective pattern shown. That would take a push above the pattern's point 'C' high at 97.76. Sellers evidently were equally spent after failing to reach the secondary Hidden Pivot support, p2=86.38. My hunch is that bulls eventually will prevail, but there's not much to entice unless you're a scalper.  The turgid price action reflects similar indecisiveness in bullion futures, which have lacked direction since completing a 350-point selloff on October 22.

Sellers dragged Bitcoin kicking and screaming toward a 91,263 target that was first signaled a month ago. This was shortly after this vehicle topped at a record 126,200 on October 6.  Although bull-market corrections often take a strong bounce from the secondary Hidden Pivot, in this case p2=99,997 produced only a modest bounce last week after it had been pounded for four days.  That suggests we should attempt a 'mechanical' short at the red line, p=107,731.  The textbook stop-loss would be at 114,554, but we can craft a much tighter stop with a 'camo' trigger if the opportunity arises. ______ UPDATE (Nov 14, 10:12 a.m.): In my zeal to conceal the top-secret coordinates yielding the target above, I somehow transposed one of them. The correct target is 91,358. Any lower would indicate 89,964, but you could bottom-fish either aggressively with a stop-loss as tight as 0.2%.  At the moment, Bitcoin is enjoying a lunatic bounce precisely from the secondary Hidden Pivot (p2=94,344) of the pattern associated with D=89,964. 

[ My friend Doug Behnfield, a wealth manager and senior vice president at Morgan Stanley in Boulder, has contributed many commentaries to Rick's Picks over the years. Below is the Q3 report he sent out to clients several weeks ago. Like many observers, he is troubled by the enormous concentration of investment capital in the AI space. Can the eventual payoff ever be big enough to justify the estimated $10 trillion that will flow into AI technology by 2030? Read why Doug thinks there are better places to park your money. With apologies to him, I have dispensed  with his meticulous footnotes and several graphs to simplify typography. The Jetson's illustration was also my idea, based on his original headline, 'Thoughts on the Jetsons and Rope-a-Dope'. RA ] In late 1962, CBS introduced the Hanna-Barbera evening cartoon The Jetsons. It was inspired by their hit series The Flintstones, but set in the future. It lasted for only 24 weekly episodes, but it made an indelible impression on the Baby Boom Generation. Along with flying cars and Rosie the robotic maid, George Jetson worked two days a week, one hour per day (not remotely), and all he did was go in and push a button to start and stop a machine. (the Referential Unisonic Digital Indexer Machine, at Spacely Sprockets). I was reminded of The Jetsons when reading a Wall Street Journal article describing the rivalry between Mark Zuckerberg and Elon Musk in developing robots. In it, Elon Musk predicts that there will be “at least 10 billion humanoid robots in the world, remaking the idea of work and life” by 2040 (The Jetsons was set in 2062). Zuckerberg’s humanoid robotic aspirations are dependent on gathering data from the microphone and camera in his Artificial Intelligence (AI) Glasses.  With them, he intends to

MSFT's double top is so obvious that we should be cautious about believing the party is over. My read is that the dirtballs who manipulate the stock for a living had no alternatives. Although they short-squeezed earnings news for all it was worth, they lacked the wattage and the daring to push above July's 555 peak. The subsequent relapse was so nasty that it will require some time to build a base capable of supporting a push to new record highs. So many bulls got sandbagged by last week's Whoopee Cushion ride that the retracement will probably take out the 492.37 low recorded early in September. Since the stock market and Microsoft will continue to stay roughly in synch, the foregoing implies that the bull market is due for a significant and possibly protracted correction.  I have no interesting Hidden Pivot targets at the moment, but that shouldn't preclude our trading this feisty little monster between feints.