The Morning Line

I've avoided the pandemic, politics and economic doomsday as topics recently because there's only so much one can say about them. This is especially true of the coming bear market.  Coming exactly when, you might ask? Of course, even the very best of us gurus is unlikely to produce the correct answer, other than in after-the-fact promotional material that shamelessly bends the truth.  My own technical work suggests the market may already have topped, since most of the major indexes have stalled within inches of Hidden Pivot targets I'd drum-rolled weeks or even months earlier. IWM, for one, has yet to surpass the 234.82 objective disseminated to subscribers six weeks ago.  A proxy for small-cap stocks, it peaked at 234.53 on March 15 and has sold off moderately since.  Similarly, a QQQ target at 337.10 that first appeared here five weeks ago caught the peak of a spike on February 16 that hit 338.19. And there was a well-advertised, very long-term DIA target at 327.27 that has been exceeded only slightly so far. Rotate This, Mack! Ordinarily I'd be pretty jazzed about all of these possible tops occurring more or less simultaneously and within easy distance of compelling Hidden Pivot targets.  I tend to rely solely on my charts rather than on my gut in order to be reasonably certain about market trends and turning points; but in this instance I am drawn to more subjective evidence. Specifically, the machine-like rotation of buying from one sector to the next that has been occurring routinely is evidence that the crooks who make their living at it are still very much in control of the game. Thus whenever stocks are falling, we can safely infer it is because the crooks are keen to accumulate them at lower prices. Rotation also provides an

The rabid mania that has seized the world of investables has gotten so much ink lately that I thought I'd explore an equally curious phenomenon with a far greater impact on our daily lives. Have you noticed how time seems to have taken wing during the pandemic?  Each Friday follows the last so quickly that, speaking as a man in his 70s who is rounding the final turn, I struggle to invent ways to keep the months and years from slipping away with equally alarming speed. I have a possible solution, one that could work for you as well that I will tell you about it in a moment. But first let me ask whether you’ve experienced the same thing yourselves. For me, the speed-up of time started to become unsettling when the interval between haircuts seemed to grow shorter and shorter. I typically let six weeks go by, but lately my hair has started to look pretty shaggy after only a few weeks. Or so it seemed. When I started recording the date of my last clip-job on an Outlook calendar, I discovered that what had felt like a mere three or four weeks since my last haircut was actually closer to the normal six weeks. Too Much Urology The same seeming compression of time has occurred in other areas of my life. Dental appointments spaced at four months have begun to feel as though they are popping up twice as often. Biannual visits to my urologist now stare me in the face seemingly every time I flip the calendar. I can hardly keep up with Outlook reminders to send out birthday cards, and yearly payments for life insurance, long-term care coverage and golf-club membership are coming due relentlessly. What could account for this feeling that time is accelerating?

 No one said it would be easy to get short at the top. This bull market is proving especially challenging to fade because the herd knows how grotesquely overvalued stocks are. With so many traders eager to bet the 'don't' line, the broad averages have started to behave like El Diablo (see photo above). The Dow has staged three 600-point-plus rallies-to-nowhere since peaking two weeks ago, but none lasted for more than a day. Although bull riders must hang on for eight seconds to claim a prize, traders could conceivably have to endure weeks or even months of loco price action to hit it big. Many will get busted up badly trying. The 'everything bubble', as it is called, is wherever one looks:  stocks, bonds, real estate, art...African American Barbie dolls. There are more homes listed for $5 million and up than there are Smiths in the Manhattan phone directory. Ironically, gold and silver are among the few investable assets that are not in a bubble. That tells you how badly the players have misjudged the risks of a financial cataclysm. They've gone all-in on bitcoin instead, as though scarcity alone could make cryptocurrency money, a store of value or a hedge against the crash that is coming. Fed Quackery Fed Chairman Powell's every utterance has been the obsessive focus of economists and pundits who make their living taking the central bank's monetary quackery seriously. Does anyone actually believe that credit stimulus will produce an economy healthy enough to service the trillions of dollars in debt we've accumulated desperately trying to keep an asset bubble from deflating? The effort is not only doomed, it is likely to to produce a deflationary collapse featuring a strong dollar and crushing real rates of interest. Sound impossible? Not with everyone on the 'inflation'

The global credit-blowout has stoked fears of a money-printing catastrophe like the one that wrecked Germany's economy a hundred years ago, planting the seeds of World War II.  However, even a cursory look at the Weimar hyperinflation of 1921-23 reveals why it is extremely unlikely to happen again, especially on a global scale.  It was a local event involving physical paper currency that would be nearly impossible to replicate using a global reserve dollar, particularly at a time when digital transactions overwhelmingly dominate. The German hyperinflation featured literal boxcars of D-marks delivered weekly to the biggest employers. The country was a 'union shop', so to speak, and the sums sent to workers ahead of each payday were continually renegotiated to include an adjustment for inflation. The system was put in place in order to hold down unemployment and worker unrest. It worked so well, at least initially, that the Germans enjoyed lower joblessness in 1920-22 than some of the Allied nations that had defeated them in The Great War. Money by the Boxcar The money-filled boxcars pushed the exchange rate to an extreme, in 1923, of 4.2 trillion marks per dollar. However, the periodic spikes in money creation that quickly ramped inflation to this level were caused not chiefly by official money-printing, but by employers who issued their own scrip. This was by agreement with the German government, which was fearful of riots if workers were not paid on time. In fact, Germany's money presses, stressed to the limit, did break down a couple of times during the 1921-23 period. Employers reacted to this emergency with such patriotic vigor that it was immediately following each of their scrip-a-loozas that inflation took unfathomable leaps. No similar mechanism or infrastructure exists to ramp up the physical supply of U.S. dollars. Although it

They don't ring a bell at the top of bull markets, as the saying goes, but perhaps this time it will be different.  Indeed, every sentient guru and talking head who is not shilling for Wall Street is properly bearish, and even the chimpanzees who make their living rotating Other People's Money into flavor-of-the-month investment themes were beginning to doubt the stock market's sanity. If a much-needed 10,000-point drop in the Dow is coming, consider it electroshock therapy.  Unfortunately, it'll probably take a lot more than that to purge the markets of mental illness as serious as we've seen in recent years. Speaking as a trader and a chartist, I'm looking forward to the violent price swings that likely lie ahead. The Hidden Pivot Method turns out to work best when things get really crazy, as occurred during the dot-com mania and the Great Financial Collapse of 2007-08.  It will be interesting to see whether the Reddit kids have scared off institutional heavies who might otherwise get short up the wazoo over the course of a bear market. My hunch is that they will still short like crazy but avoid doing so in individual stocks that could attract dangerous attention. Keeping Suckers in the Game Getting short will not be a piece of cake, since a bear market as long overdue as this one is going to attract many players who are all-too-eager to pick tops. We've tried it ourselves recently using Hidden Pivot targets that precisely nailed peaks in several indexes, although not in IWM, a small-cap vehicle that still has a major target outstanding 4% above, at 234.82. Like so many amateurs, we got spooked out of some DIA puts on Wednesday when the Dow rallied nearly 500 points. That's the way it's going to be the whole

[Dear readers, I am taking a desperately needed break from telling you why a stock market crash is long overdue, and why Biden & Friends are finally going to make it happen.  Full disclosure: I have not read a newspaper or watched the news since November. RA ] We’ve all grown so weary of spam callers pushing auto warranty coverage that voters would probably support the death penalty for the slimebags responsible for these calls. The recorded voice says “This is your final notice. The factory warranty on your vehicle is about to expire,” or some such. I get about ten of these calls a week, and although they used to spoof Colorado phone numbers because I lived there for 20 years, lately the calls have been coming from all over the U.S. How We All Pay Do we dare take encouragement from reports that Sen. Charles Schumer has been receiving these calls like the rest of us, and that he is so pissed off that he has vowed to do something about it?  "Not only are these calls a nuisance," he told the New York Times, "they also tie up land lines and can eat up a user’s cell phone minutes, possibly leading to a higher cell phone bill due to overage charges.” Schumer, arguably the most powerful member of the U.S. Senate, has called for a federal investigation into “robo-dialer harassment.” He’s even gotten headlines with a call to war: Schumer Urges Inquiry of Companies Behind Bogus Auto Warranty Calls announced the Times. Sounds promising, right? Wrong. The headline is actually from 2009 (!!), and you can judge for yourself how much progress the Senate majority leader and his colleagues have made ridding us of the auto warranty plague. Sadly, a Google search would seem to suggest that

Been vaccinated yet?  I haven't, although I'm trying not to give friends the impression that I'm making some sort of political statement. That means not emailing them links to every vaccine horror story that surfaces, or to growing evidence that the vaccine may not be all that it's cracked up to be.  That mRNA vaccines have not been well-tested and could conceivably cause bodily harm or death is beyond argument at this point.  That is why I am waiting until most Americans have gotten their shots and reported any side effects before I decide whether to get mine. The person I trust most about this is my personal physician, who also happens to be one of my oldest friends. He was quite confident back in April that the combination of hydroxycholoroquine, zinc and Zithromax was highly effective in treating Covid. This was an unpopular view at the time; indeed, half the country was rejecting it merely because it had Trump's endorsement. However, my friend had already treated two dozen Covid patients, and all but one recovered without getting very sick. The one patient who fared poorly, a mutual friend, had waited until ten days after he'd shown symptoms to start treatment. Two Brothers Part Ways My physician friend had no qualms about getting vaccinated himself, especially since he sees so many patients who are infected. He does a weekly radio show and undoubtedly has influenced many, including some who were as skeptical as I am, to get their shots. However, his brother, a surgeon, has so far chosen not to get vaccinated, mainly because of a bad reaction he once had to a flu vaccine. I'll be monitoring the health and progress of two close friends in particular, since they've been scared to death to leave their homes since lockdowns

This is a perfect time to catch up on the best of television, since so many of us are watching more of it these days, particularly on Saturday nights. I've been assiduously avoiding all news for the last month or so and am faintly aware of the impeachment proceedings and Biden's energy pipeline kill-shot only because they were mentioned by subscribers in the Rick's Picks chat room.  My self-imposed news blackout has been as tight as I, a lifelong news junkie and former newspaper editor, can make it. I canceled a subscription to the Wall Street Journal that had run for nearly 40 years, and I don't even watch Tucker anymore, let alone network or local news. Serious collateral damage from the red/blue color war still raging in America has so far amounted to the loss of two friendships, one of them stretching back 65 years.  When I was scheduled for chemo and radiation, my good buddy came down to Florida to see me through a horrific first week that was to have included massive infusions of metal-heavy chemicals and enough X-ray exposure to kill just about any living thing. At the last minute, I opted instead for a so-far successful surgical treatment at M.D. Anderson Center in Houston. This allowed my friend and I to spend the week taking epic walks on the beach, enjoying South Florida's great restaurants, and discovering the pleasures of Delray's Asian massage parlors, a shadowy niche he has spent his adult life exploring. He is from the theater world, a founder of one of the country's most successful non-profits. He is also a self-described anarchist, espousing political views that could not be further from mine. 'A Killer of 450,000 Americans' This was never a problem before Trump. In the end, though, with just a

The news media went all-in over the weekend trying to explain the significance of the Gamestop saga, but because few traders were asked about it, there was little in this torrent of analysis to enlighten. Most of the reporters, talking heads and pundits focused on the obvious, sensationalizing a story about how the little guys have drawn first blood and are about to stick it to giant hedge funds by targeting their short positions. This kind of claptrap makes for salacious reading, but there's a much bigger story that has so far gone untouched. Before I explain, here's some point-and-counterpoint to get you past the disingenuous swill being dished out in the blogosphere and by the mainstream media: Popular Narrative:  The Reddit/Robinhood mob (RRM) has declared war on hedge fund biggies, and so far the smart money has been getting its butt kicked. Reality: The damage so far is just a mosquito bite on the behind of hedge fund elephants like Steven A. Cohen, and the Reddit mob a five-year-old who has discovered where Daddy keep the matches. PopularNarrative: “We’re going after Citadel next!” Reality:  Nice try, kids, but this kind of hubris is going to boomerang  on you. As a rallying cry, it makes good headline fodder, since the name ‘Citadel’ conjures up the financial establishment’s most impregnable fortress. In the end, though, you can bet on Citadel & Friends to change the game so that the edge you pishers currently enjoy evaporates quickly, assuming it hasn’t already. Popular Narrative: "After Citadel, we're going to squeeze shorts in silver." Reality: We're actually rooting for you on this one, since precious-metals markets are manipulated by unmitigated scumbags. And, yes, your merely having announced last week that silver is in your cross hairs seems to have provided a little added boost