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The Morning Line

How Long Can Netflix Keep Outbidding Disney?

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The broad averages wafted higher Tuesday after being stuck in a holding pattern for more than a week. Although the ascent was gentle for most stocks, the hard-hit FAANGs caught fire, with NFLX leading the pack on a nearly 7% gain. The company announced an 18% rate increase in its most popular plan, which will now cost $13 a month instead of $11. Wall Street loves a company that can make a price increase stick in these very competitive times, and it will allow Netflix to step up the bidding war for A-list talent and content.  While NFLX was streaking higher, the shares of Disney were falling by almost 2%. The company will have to match Netflix dollar-for-dollar to stay competitive, but it won’t be easy, since Netflix’ pay scale is outrageous. For example, they paid comedian Chris Rock a reported $40 million for two one-hour specials. Nice work if you can get it. But will such extravagant outlays pay off in revenues? The jury is still out, but the suspicion grows that the bidding war has grown too costly to sustain.

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$ESH19 – March E-Mini S&P (Last:2605.75)

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$AMZN – Amazon (Last:1674.80)

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The Wall Street ‘mafia’ charged with distributing AMZN shares to widows and pensioners before the bottom drops out have been experiencing difficulties lately. Twice in the last three sessions, they pulled their bids on the opening in order to dry up sellers; however, in both instances the resulting short-squeeze rallies failed to exceed the previous day’s high. Shorts may yet come through and panic to get ’em back over the next day or two, but unless there’s some ginned up ‘news’ to propagate this, expect the stock to take a header down to 1500 or so._______ UPDATE (Jan 15, 5:37 p.m.): Panicky bears finally came to the rescue, driving the stock $62 higher in mere hours. Now, if the 1683.70 midpoint resistance shown in this chart is easily exceeded, look for a continuation of the rally to at least D=1772.24. As always, a stall precisely at p would confirm the pattern and its target.

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HGH19 – March Copper (Last:2.66)

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$HUI – Gold Bugs Index (Last:161.57)

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$JYH19 – March Yen (Last:0.92615)

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The yen, whose behavior corresponds closely to gold’s, began 2019 with a giant leap that slightly pierced the 0.94148 midpoint resistance of the pattern shown (click on inset). This is bullish but would become still moreso if the futures can close for two consecutive weeks above it. The 1.03755 target is already in play, but it would become a lead-pipe cinch to be achieved once the March contract is trading decisively above the red line. Pivoteers may have noticed that the pullback to the green line activated a ‘mechanical’ buying set-up. It took five months for the currency to get airborne after this happened, but the lengthy consolidation will likely contribute to the rally’s power.

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$AAPL – Apple Computer (Last:152.25)

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GCG19 – Feb Gold (Last:1286.10)

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$GDXJ – Junior Gold Miner ETF (Last:31.25)

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$DXY – NYBOT Dollar Index (Last:96.58)

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The Dollar Index has been in a bullish holding pattern for two months. As tedious as this has seemed, it has not diminished the likelihood that the next big move will be up. My immediate target would be 98.20, and we could infer the rally had begun in earnest once DXY has closed for two consecutive days above the 97.10 midpoint resistance shown here.  Alternatively, the first hint of trouble — unlikely in my estimation — would come on a print beneath the 95.68 ‘external’ low shown in the inset.

A further, significant strengthening in the dollar will tell us when the deflationary endgame for the global economy is gathering force. It will crush debtors, bankrupt creditors and lop at least four or five zeroes worth of funny money from the banking system’s quadrillion-dollar shell-game. I have written extensively on why hyperinflation is extremely unlikely to settle debts that have become vastly too large to repay. If you cannot understand why, let me pose this question: Do you actually believe the banksters will let you pay off your mortgage with a few hundred-thousand-dollar bills that you’ve peeled from your wallet? If you answered in the negative, you are implicitly a deflationist. Regarding hyperinflation, if you think the ruinous Weimar episode of 1921-23 shows that it could happen in the U.S., the opposite is true.  Read Adam Fergusson’s When Money Dies for pellucid insights as to why. It is $8 on Amazon.

This is a free forecast (Tout) by Rick. Get a free trial of Rick’s Picks to see full member content.

$TNX.X – Ten-Year Note Rate (Last:2.606%)

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Odds that long-term rates have made an important top increased with the recent plunge in yields beneath the trendline shown in today’s chart (see inset). The U.S. Ten-Year Note fell to 2.826% last week, down from a high a month ago near 3.25%. The decline narrowly missed exceeding a key low at 2.808% (#1) recorded in August, but if and when that happens it would generate an impulse leg of weekly-chart degree that could weigh on rates in 2019. And if the downtrend were to exceed two prior ‘external’ lows shown in the chart at, respectively,  2.759% (#2) and 2.717% (#3) without an upward correction, that would shorten the odds even further that long-term rates have topped. _____ UPDATE (Jan 2, 6:03 p.m.): Some of you  may have wondered why I reactivated a tout originally published on Dec 10. I had intended this update, with an immediate downside target of 2.633%. Let’s see what kind of bounce we get._______ UPDATE (Jan 3, 10:24 a.m.): Plunging yields didn’t even pause at 2.633%, so look for more slippage to at least 2.505%. Here’s the chart.

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Tuesday, January 8, 2019

The consistent accuracy of Rick Ackerman’s forecasts is well known in the trading world, where his Hidden Pivot Method has achieved cult status. Rick’s proprietary trading/forecasting system is easy to learn, probably because he majored in English, not rocket science. Just one simple but powerful trick -- managing the risk of an ongoing trade with stop-losses based on ‘impulse legs’ – can be grasped in three minutes and put to profitable use immediately. Quite a few of his students will tell you that using ‘impulsive stops’ has paid for the course many times over.

Another secret Rick will share with you, “camouflage trading,” takes more time to master, but once you get the hang of it trading will never be the same. The technique entails identifying ultra-low-risk trade set-ups on, say, the one-minute bar chart, and then initiating trades in places where competition tends to be thin.

Most important of all, Rick will teach you how to develop market instincts (aka “horse sense”) by observing the markets each day from the fixed vantage point that only a rigorously disciplined trading system can provide.

The three-hour Hidden Pivot Course is offered live each month. If it’s more convenient, you can take it in recorded form at your leisure, as many times as you like. The course fee includes “live” trading sessions (as opposed to hypothetical ‘chalk-talk’) every Wednesday morning, access to hundreds of recorded hours of tutorial sessions, and access to an online library that will help you achieve black-belt mastery of Hidden Pivot trading techniques.

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