The Morning Line

Stories about San Francisco's death appear to have been exaggerated. I arrived there Saturday for a five-week stay, a getaway from Florida's insufferable summer heat. It didn't take me long to recall why, at age 28, I came to San Francisco and stayed until I was 50. For one, the weather rarely turns hot, even when the rest of the country is sweltering.  And on those rare occasions when a heat wave descends on the city, there is always an ocean of fog lurking just outside the Golden Gate, ready to pour onto the streets whenever high temperatures linger for more than a few days. It was an invigorating 65 degrees when I stepped off a JetBlue plane at SFO on Saturday morning. I'd departed Ft. Lauderdale shortly after sunrise with the thermostat already climbing into the mid-80s and humidity approaching steam-bath levels. Arriving in San Francisco was like encountering the crystal blue ice of a Norwegian fjord. I was greeted by an old friend who has been a player for decades on the periphery of the commercial real estate market. He contends that most of the negative press the city gets is just flackery employed by developers to drive down prices. Not only have they succeeded at this, they have begun to seed long-neglected warehouse districts with large sums of money, turning them into magnets for tech entrepreneurs, residential developers, skilled tradesmen and mostly-Asian workers who earn $300,000 or more per year with their extraordinary STEM skills. So many luxury apartments have sprung up to house these young whizzes that I didn't realize at first that I was in my old Portrero Hill neighbohood, which sits literally on the other side of the railroad tracks, about a mile south of downtown San Francisco. Eldorado's Infrastructure The drive took us

The dog days of summer have returned with a vengeance to Florida this year, especially in my home. The air conditioner's condenser coil sprang a leak, which is hardly unusual considering that it's eight years old. What is unusual, and causing more than a little inconvenience, is that the broken part will take a month for the factory to replace. So far, I haven't been able to determine why the manufacturer, Lennox, would be having such a hard time scrounging up the part. Regardless, if you're in the market for a new cooling system, consider Trane, Rheem or some other brand before you plunk down $8k on a Lennox system that could fail in the intense summer heat of such hellholes as Miami, Phoenix, Houston or Charleston. The interior temperature of my home has continued to rise daily and is now at 91 degrees. There is no cooling it off at night, either, since the air has been soupy, with temperatures only a few degrees cooler than during the daytime. It's an odd time of year for the pace of so many things to be quickening. The stock market, for one. Far from being locked in summer doldrums, the bull rally in the lunatic stocks has lurched into high gear and is being loosely controlled by the one-decision whizzes who manage money. They are not so much pushing shares higher as allowing them to rise on urgent short-covering to speculative heights that in the past have invariably led to disaster. The talking heads say investors sniff Fed easing, finally -- and who could begrudge them a wild display of revelry to make up for their merely festive toga party earlier in the year, after they realized the central bank had no plans to loosen. Six-Three = MAGA High-Fives On the

Of all the markets tracked by Rick's Picks, the dollar arguably has been the most interesting. This might seem paradoxical, given the relatively placid look of the Dollar Index chart above. Although there has been moderate turbulence since early last year, the overall impression is of a transoceanic flight cruising within a vertical range of several thousand feet. Most striking has been the dollar's ability to hold aloft a mere 4% below 2022's peak of around 115. This is tough to square with apparent reality, since the greenback's global hegemony for the last 90 years has come under increasing challenge -- from the BRICs, for one: Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates.  It were as though they had ganged up on the schoolyard bully, changing the way international trade in goods and commodities is settled so that dollars are disfavored in every meaningful way possible. Most recently, the Saudis announced with some fanfare that they would sell as much oil as demanded of them for payment other than in dollars. As the chart makes clear, however, if this had any discernible impact on greenbacks, it was to have caused their slight rise. Why the seemingly anomalous behavior? A logical explanation is that global trade flows are but a relatively small portion of the uses to which dollars are put. The entire market for crude oil, for example, is estimated at around $2 trillion per annum. This may seem like a big number, but it is a pittance in comparison to the dollar sums that change hands in financial markets. There the tallies reach into the quadrillions of dollars -- thousands of trillions, that is, if such numbers are even imaginable when tied to the flow of actual business. Compare that to global

The disconnect between tight Fed policy and a U.S. economy on the brink of recession is growing more unsettling every day. A key question is which economy we are talking about, since there are two distinctly different ones that Fed actions can affect. The first is the economy of consumer goods and services. It is about to keel over dead. This will be a very big deal, since consumption accounts for 70% of the nation’s GDP. Most of it comes from the broad middle class, which is staggering under the weight of higher costs for nearly everything. Some of those costs, particularly for car and home insurance, must be fully borne no matter how high they go. Other outlays are discretionary and include food, travel and entertainment. Those sectors of the economy are close to being asphyxiated by high prices and high interest rates, even as delinquent payments for cars, homes, credit card balances and rent climb into the red zone. The other economy comprises financial assets, and it is flourishing as never before, dancing in the ether. Soaring stock prices and home valuations have made many Americans think and act like they are rich, and they are continuing to spend freely. An estimated 10% of America’s 131 million households have net worth of $2 million or more. That is an impressive number, but it is not nearly big enough to prop up an economy whose health is determined by the other 90%. These days, the 90% are barely keeping McDonald’s afloat, even if East Side foodies are paying reservation specialists $500 or more to snag a decent table on a Saturday night. A 1930s Spiral The two economies have put the Fed in an inescapable bind. If the central bank loosens, the additional inflation this is likely to cause

Last week's rabid short-squeeze punctured bull-market targets I've been drum-rolling for months in Microsoft, Apple and QQQ. Moreover, the bullish look of the S&P 500 chart shown above is so clear and compelling that even the most stubborn permabears will need to make room for more upside to at least 6118, a nearly 13% rally from these levels. If the uptrend maintains its current pitch, it would hit the target just in time for Papa Bear to come bellowing from his lair at the 'correct' time of year -- i.e., when autumn leaves start to fall. The long-term charts allow three other scenarios that should not be ruled out. The first would be for the bull market to flame out here and now, with the S&Ps lying just a split hair from the pattern's 'secondary Hidden Pivot resistance' at 5461. I would rate this scenario a 40% possibility. More likely is a continuation to 6118, and then a major selloff. This is based, as are all Hidden Pivot forecasts, on price action at the red line, a 'midpoint' Hidden Pivot at 4804 that got shredded back in December. If a midpoint resistance is easily exceeded the first time it's touched, that's usually a sign that the target itself -- in this case 6118 -- will eventually be achieved. However, as you can see in the chart, the move through the red line was gradual rather than dramatic. This implies that although a further run-up to 6118 is likely, it is not a lead-pipe cinch. Second Wind, and Then... Given the pattern's clarity, it is difficult to imagine that the S&Ps will quickly push past 6118 when they get there. There will almost certainly be a tradeable pullback, and the odds are about 60% that it will be the beginning of

Those who think the wizards at the Fed have engineered a soft landing for the grotesquely pumped U.S. economy are in for a rude awakening. Strip out the "wealth effect" from mega-cap stocks driven mostly by hot air and short covering, and the economy is already in recessionary muck. Although yacht sales reportedly are still brisk and nearly every American has booked an exotic cruise, retail sales to the broad middle class have slipped so badly that even lowly Dollar Tree is struggling for air. Consumer confidence has begun to fall because wages are again losing ground to inflation. A look ahead is even more dispiriting with AI breathing down everyone's neck, since it is potentially the biggest job-killer the global economy has ever faced.  While work-saving innovations may have created more jobs than they've destroyed, it's difficult to imagine how that will happen in an era where the machines themselves are capable of rooting out inefficiency more ruthlessly than any human could. Tesla as Savior So what would a soft landing imagined by Wall Street look like?  It would probably start with a 10%-15% selloff in stocks-- not quite a statistical bear market, just enough to allow investors to do some bargain-hunting ahead of the next big run-up.  Car manufacturers would sink into genuine recession, but it would be cushioned by Tesla's unique ability to ride out the storm with fabulous high-tech innovations yet to be imagined. Tesla shares have already fallen nearly 60% from their 2021 highs just above $400, so the worst, we'll be told, may be past. The Street's spinmeisters would also be fixated on the prospect of lower fuel prices, lower inflation and lower interest rates. The mainstream media, too stupid and lazy to deviate from the popular narrative, would give these fantasies a boost

Speaking of my fellow gurus, our switchboards have lit up to warn that something big is looming.  Even the oddballs who think stocks are headed much higher seem to agree that a punitive correction is long overdue. And although each of us would like to believe that the arrival time of whatever dreadnought is coming will precisely match our individual forecasts, Friday's Kabuki drama on Wall Street drove home the reality that none of us stands a chance of being exactly right. What an extraordinary day it was -- far freakier, even, than we have come to expect on a Friday. As the Dow Industrials steamed higher, Nasdaq stocks were getting savaged. The high-fliers in particular suffered a memorable drubbing, unable to lure buyers for most of the day. These behemoths have been egregiously misnamed The Magnificent Seven, but there is nothing magnificent about them at all; they are just flying pigs, bloated with enough hydrogen to levitate a million Hindenburgs.  A cynic would say the zeppelin fleet's smoking room is located in the Eccles Building. Jackpotters Numbed Call options went begging for bids on Friday as well, discouraging Rick's Picks subscribers from even thinking about the 'jackpot bets' we sometimes make when stocks look ripe for a suddden mood change. And then came the blitzkrieg!  As the Dow rally went vertical, a thousand bogged-down stocks got caught in the vortex, rising like a spout to finish the day with miraculous, modest gains or little net change. The craziness was most intense in the final 30 minutes, demonstrating the remarkable agility of trade-desk lackeys who have mastered the tactic of rotating your hard-earned dollars from one flavor-of-the-day to the next. Repo Man Thwarted It was Microsoft, the world's most valuable company, that had led the way down. The software giant

Is the bull market about to come crashing down, or will we have to wait until autumn when such disasters traditionally occur? I'm a traditionalist myself and expect the bear that's looming to usher in America's umpteenth panic and sixth full-blown depression. The hard times ahead will see the collapse of private and public pension systems, the triaging of Medicare, relentless waves of bankruptcies, and the rewriting of most mortgages so that the current occupants can stay on as tenants or sharecroppers.  The dollar will be very strong, but not in the good way, since debtors will have to make payments unto death in hard currency. All of this is unavoidable no matter what you read; it is only a question of when. There will always be optimists who think the bull market is never going to end, but they are obviously not paying attention.  They have much in common with delusionists who still think the covid "vaccine" was a blessing even though it has killed millions and continues to stop athletes in particular dead in their tracks.  Many still adore the pathological liar Fauci, and Facebook's Zuckerberg, who financed enough ballot harvesting in 2020 to subvert the election. The true believers are so crazy they probably believe that Nvidia, having achieved a $3 trillion valuation, is about to double again in the next 12 months. Wave Theorists 'Divided' So why do we think the bull market begun in 2009 still has a ways to go?  For one, although Elliott Wave experts seem divided on whether the top is already in, some of the better ones (Walter Murphy, for one) have noted that market breadth -- the percentage of stocks participating in the rally -- has not gone sufficiently out-of-whack to set up the haymaker. Concerning seasonality, there was an

The white-collar thieves who manipulate bullion appear to be losing their grip. Silver bulls have long wondered how prices could languish even when demand for physical appeared to overwhelm dealer supplies. Blame paper proxies for precious metals, since many if not most investors would rather store and swap the stuff in virtual form than pay to insure it in a rented vault. Bullion bankers love it that way, since they can sit on actual bars and ingots, loaning them at interest, or borrowing them for next to nothing, while everyone else trades up a storm of near-gold and near-silver pledges and IOUs. However, the steep price rise lately has threatened to upend this arrangement by increasing demand for actual bullion. Ordinarily, the thieves, a sleazy cabal that includes some of the biggest banks in the world, have relied on 'Mr Slammy' to rescue them.  He appears on the scene whenever they pull their bids and let prices plunge to relative bargain levels. Within the last month, we've seen downdrafts in gold of $80 and $130 respectively, and similar moves in silver. Unfortunately for the bad guys, prices have rebounded too quickly in each instance to allow them to replenish their doubly hocked inventories on-the-cheap. Short a Billion Ounces Now it looks like they're about to get creamed. Last week, July Silver broke out on the weekly chart with enough force to imply it will reach a minimum $37 an ounce. That would represent a 16% move on top of the already impressive 28% gain achieved since late March. The chart would seem to allow little respite for the bullion bankers. (If any of you ass-bandits are reading this, the 'hidden' resistance at 32.419 shown in the chart could be your last chance to get 'em back below $37. (Note: Just