Rick Ackerman

The FAANGs and a few other 'lunatic' stocks beloved by institutional buyers have deservedly been getting thrashed, but it looks like the pain is unlikely to abate any time soon. My downside targets in two key stocks, GOOG and AMZN, are well below current levels, implying they will remain a drag on the market. One stock that has been bucking the tide is Microsoft, which is within a three-day rally of all time highs. DaBoyz seem to have settled on the stock as their top choice for flight-to-safety, presumably because the company has got its subscription-revenue model dialed in. This provides a very predictable stream of profits that has become nearly as bomb-proof as utility company earnings. Another plus is that, unlike Apple, Microsoft hasn't announced plans to jump into the streaming content business. Indeed, the software giant has shunned hubris in favor of quietly making money the old-fashioned way. It has been winning over customers (including me) with improved products, but also with a level of customer support that has all but disappeared from the digital world.

[Jim Grant is an old-school observer of this economic age and one of its most brilliant commentators. Following is the speech he gave in accepting the 2019 Bradley Prize, which recognizes those who have helped further the principles and institutions of American exceptionalism. RA] Ladies and gentlemen, it's a blemish on the age that so many of us know the name of the Federal Reserve chairman. In a better world, that government functionary would be as obscure as what's-his-name, the home plate umpire who got no arguments calling balls and strikes at Yankee Stadium the other night. Who elected the Greenspans, Bernankes, and Powells to be the arbiters of interest rates, asset prices, the rate of inflation and who knows what else? It wasn't Alexander Hamilton. Nor was it the Fed's own founders. If the authors of the 1913 Federal Reserve Act could return to earth to inspect their handiwork, the shock might kill them all over again. Congress envisioned an institution to function in the context of the international gold standard. This meant a dollar defined as a fixed weight of gold. You should have heard old Carter Glass, the congressional father of the Fed, berate the critics who dared to suggest that he was scheming to replace the gold dollar with a scrap of green paper. Well, Glass himself is to blame for much of the evil that followed. The legislative preamble to the act that Woodrow Wilson signed describes a bill "to furnish an elastic currency, to afford means of discounting commercial paper, to establish a more effective supervision of banking in the United States-and for other purposes." Financing Wars These other purposes quickly became the principal ones. No sooner did America enter the Great War than the Fed lent a hand to facilitate the government's borrowing.

This lessons offers a smorgasbord of mechanical and counterintuitive set-ups, none of which triggered during our hour together. There were opportunities for possible trades at a later time, however, and it will therefore be worth your while to check them out at your leisure. Skip to the end of the Q&A period that followed the session for a finely nuanced discussion of a mechanical trade that was borderline. For your information, the trade worked out although I had decided against doing it. The takeaway is important, and it is this: Don’t overthink trades that meet our criteria.

Stocks are in wafting mode, indifferent to tariff wars, slumping retail sales and impeachment talk. The broad averages have been racking up impressive gains even when buying interest is weak to nil. It certainly felt that way on Tuesday, when the Dow Industrials rose nearly 200 points on the opening bar, then hovered aloft for the rest of the day. For every tepid buyer it would seem that there is an even more tepid seller.  The only stock that has attracted bears with some gumption is TSLA, which has been fighting for its life lately against a steady stream of ugly headlines. Short sellers had better make the most of enticing odds in the stock, since they're not likely to catch a favorable breeze elsewhere. The chart (inset) shows VXX, which tracks short-term volatility in the S&Ps, headed at least 6% lower over the next day or two. If so, the index, currently trading for around 2864, is bound for 2900. Play the FAANGs, over-stoked as they are, and you can't miss.

Bulls and bears look to be in a state of jittery equilibrium, like two arm wrestlers unable to put the other down. The benefit of the doubt should go to the former, however, since the steep rally from December's Marianas Trench has an unachieved Hidden Pivot target at 3095, basis the S&P 500 cash index.  That's an 8.4% trek from these levels, and if it is achieved with the power of the buying binge we saw as 2019 began, we could be there by late July.

Is it okay for Tesla bulls to come out of their bomb shelters?  Perhaps, but only with caution. The stock bounced sharply on Monday from a low that was close to the 193.31 Hidden Pivot support we were using as a minimum downside target. On the hourly chart (inset) the selloff looks to have reversed an inch from where we'd expected. But I hesitate to declare the target achieved, since the tiny-looking gap was actually $5.45. Given the sinewy delicacy of the pattern itself, we might have anticipated a tradeable bounce from within no more than 15-20 cents of the target. In addition, downside gaps at the red line (p) and the secondary pivot (p2) imply that sellers are not yet spent. Bottom line, I'll suggest keeping your enthusiasm in check until such time as TSLA exceeds 213.30 -- or better yet, closes above that number. It is equal to an 'external' peak recorded Friday on the way down, and a move above it would generate a robust impulse leg on the lesser charts. _______ UPDATE (May 22, 4:07 p.m.): Down nearly $12 midway into Wednesday's session, TSLA bounced from within a nickel of the 193.31 target. Unfortunately, it subsequently slipped lower and closed 62 cents beneath it. Any further slippage would send the stock down to 188.81, a minor Hidden Pivot support, but a close beneath it would put a 170.21 target in play. ______ UPDATE: (Jun 6, 11:03 p.m.): The slimeballs who rule TSLA shares have stepped back to let short covering drive the stock higher over the last three days, since this could be the best opportunity they will have to unload stock on widows and pensioners before it tanks below $100. The daily chart is now bullishly impulsive, but we'll need to see how the second

Uber doesn't have much price history, but today's bounce from within an inch of a midpoint Hidden Pivot encourages the thought that predictable opportunities will be relatively easy to discern. If so, we can look forward to bottom-fishing should the stock fall to the 35.29 target of the pattern shown. It will remain viable as long as 44.06 is not exceeded to the upside. If sellers had achieved 38.50 or so in the  early going on Monday, this rally might have offered an enticing way to get short 'mechanically.'  However, the turn from the red line suggests that there is too much short-covering at the moment for UBER to relapse without giving bears a hard time. _______ UPDATE (Jun 5, 5:53 p.m.): Uber traded above the IPO high Wednesday. Let's plan on shorting 400 shares if it hits 47.13. A 47.21 stop is advised. _______ UPDATE (June 10, 9:27 p.m.): The stock plunged without getting near our 47.13 short offer, so cancel it.

So how does Game of Thrones end? Never having watched the show, I couldn't care less. But thirty million fans evidently do. We haven't seen America this worked up about so trivial a concern since Kristin Shephard shot J.R. Ewing nearly 40 years ago in a landmark episode of Dallas. TV was free back then, and so the audience worldwide was more than ten times that of Game of Thrones.  Could the current obsession with a hyped-up TV show explain why the stock market is flirting with new record-highs even though the economic world is on the brink of recession? Unfortunately, this is no exaggeration. Europe has been slumping toward growthlessness while China and the U.S. are in a tariff war that seems likely to worsen, reversing a decades-long global trend toward freer trade. This is a very big deal, a watershed change in a seemingly rosy economic picture, but you couldn't tell this from watching the stock market's near-vertical ascent since January. The rally continued last week ahead of an ominous report that capital spending, a key driver of economic growth, fell dramatically in Q1 for a broad cross-section of large U.S. companies. (Click on thumbnail inset to see this graphically.) Stocks have risen anyway, not because investors are convinced of a brighter tomorrow, but because the flow of funny money into stocks has become well nigh unstoppable. It is a perpetual-motion machine requiring only a drop of lubrication from sunny unemployment numbers to keep things humming. In reality, low joblessness reflects only a superficial aspect of the U.S. economy's supposed strength.  It is a trickle-down effect that has not helped to alleviate the massive debt burden of Americans one bit. To the contrary, it has only pushed consumers to borrow more, making the inevitable day of reckoning even

Bitcoin is on the move again, a venomous snake in the grass. You might expect to find a reasonable explanation for cryptocurrency's sudden, spectacular rise from the dead. Instead, you get only dim-witted speculation that institutional players are starting to warm to it again. Fidelity, for one, reportedly will be buying and selling bitcoin for institutional customers starting in a few weeks. While that may be good news for cryptomaniacs, it hardly justifies the doubling of bitcoin's price since early April. Recall that blockchain "money" was reviled and repudiated after it fell to $4,000 in less than a year from a $20,000 peak at the end of 2017. Since then, cryptocurrencies have remained under a dark cloud, not only because of the disastrous outcome of the 2017 bubble, but because of security breaches and scandals that ordinarily would doom a less addictive speculative vehicle. Now, apparently, all is forgiven or forgotten -- not because Fidelity and their ilk want to better serve their customers, but because they sense that speculators, having learned nothing from the first bubble, are hot to trot again. Mourning Is for Sissies It is predictable that bitcoin's rise from the pyre will end badly. But it does give the speculative mania that has been driving the stock market a new lease on life, since bitcoin nuttiness will have to run its course a second time before it comes to a fitting end. The chart (inset) is remarkable because, in most instances where an investable has gutted and disemboweled so many fools, it has taken a while to forget and rebuild. Base-building is what saucer-shaped bottoms are all about. In bitcoin's case, however, there has been no such seemly interval for contrition, mourning and reflection. Bid anew by fools, block-chain money has lurched back to life and