Rick Ackerman

Here's a Bloomberg headline that should scare the hell out of permabulls: 'World-Beating U.S. Stocks Show No Sign of Falling Back to the Pack'.  It's the 'Show No Sign' part of this attention-grabber that seems fraught with hubris -- so much so that we shouldn't be surprised if the stock market were to begin imploding as soon as...tomorrow? Dr. Irving Fisher, an eminent professor in his day, achieved eternal notoriety with the observation, just before the 1929  crash, that the stock market had reached 'a permanently high plateau'.  Has anything you've heard or read lately recalled Dr. Fisher's kind of optimism? If so, please drop me an email so that I can share it with readers.  In the meantime, I'm going to read Fisher's work, The Debt-Deflation Theory of Great Depressions and report back to you. It seems astounding to me that a renowned economist steeped in the theory of deflation could have failed to see what was coming. The book was written after the crash, in the throes of the Great Depression, but I have to assume that the ideas it expounds took shape in the professor's mind before that fateful autumn of 1929. While he may have learned the lessons of history, it would appear that the rest of us are about to repeat them.

If you've never heard of tether, it's a cryptocurrency with daily trading volume of about $3 billion that is second only to bitcoin's $5 billion. Tether was the subject of a prominently displayed article in Monday's Wall Street Journal headlined "Mystery Shadows a Digital Currency".   Of course, "mysterious" is about the last thing we should want said about money given us in exchange for such goods and services as we might provide to others. Tether's sales hook is that it is 100% backed by U.S. dollars, or so the company's founders say. The Wall Street Journal, while not necessarily smelling a rat, implies that everyone who transacts in tether would be better off not having to take the company's word for it. Trouble is, Tether dismissed the firm it had hired to perform an audit, Friedman LLP, before Friedman issued a final report. To further obfuscate things, no one is saying what the auditors might have learned concerning three banks that supposedly hold dollar backing for the $2.5 billion in tether coins now in circulation. Coincidentally, your editor just finished reading a book titled The Ten Greatest Conmen, by Roger Cook and Jim Tate.  The ten swindlers profiled in the book had one thing in common: a rare gift for convincing otherwise intelligent men and women that there was plenty of money or collateral behind whatever it was they were pushing. To read the book is to be shocked at how some very smart people, often well placed in government, were completely taken in. We should therefore be grateful to the Journal for keeping our eyes open as cryptocurrencies seek to gain a foothold in our daily lives. Money that anyone, not just central banks, can simply create will always deserve our diligence and a modicum of skepticism. Cryptocurrency aficionados

Although there's still no compelling technical evidence that gold is headed below $1000, there would appear to be little chance that the December futures will not full a further $14 to the 1187.70 target shown (see inset). Traders looking to scalp a promising low can bid there (or slightly higher), stop 1186.90, but don't pass up an opportunity to take a partial profit on a rally of as little as $3-$4. Also, beware of the sleaze factor, since a subscriber  reported being unable to fill a 1202.90 bid Monday morning -- that had been my minimum downside target for the last several weeks -- even though the futures initially traded down to 1202.00 (and rallied $9 before relapsing).

I hadn't noticed the 14.946 target shown until after Silver plummeted today (see inset), but it suggests there's at least a chance the September contract may have bottomed or is close to doing so. Rather than get your hopes up, I'll let the charts do the talking. That means the futures would need to go no lower, then rally to exceed the 15.700 peak shown (click here), before we could infer that bulls may be turning the tide.  Otherwise, the chart suggests the Sep contract is likely to fall to at least 14.625, albeit with an opportunity to turn higher from p2=14.894.

Friday produced a series of failed rallies, the last suspiciously stronger than the rest. This suggests that short covering is the only source of buying power at the moment, and that any rally should be regarded as an opportunity to get short. The yo-yos who drove the futures higher in the final two hours will be less panicky when stocks open Sunday night, but we'll need to see what Monday morning brings before we judge whether they have the cool to let stocks fall, which is what stocks actually want to do. I'll try to sharpen my short-term outlook in real time as the new week begins, so stay tuned to the chat room if you trade this vehicle. _______ UPDATE (August 13, 4:25 p.m. EDT): The gratuitous hump carved out by today's nervous price action will have exhausted bulls and bears alike, changing the picture somewhat. The latter will have grown more frustrated because they failed to extend Friday's weakness. If the futures print 2844.00 today, exceeding the two peaks shown, shorts had better get 'em in yet again._______ UPDATE August 14, 9:27 p.m.): Yet more pointless thrashing around. Zzzzzzzzzz.

We got savaged attempting to bottom-fish a promising-looking Hidden Pivot support in First Majestic today.  Should we double down with a similar gambit in New Gold? Yes, for reasons given her previously. As 'Maven' noted in the chat room, owning the stock for a dollar or less is akin to buying a cheap call option that doesn't expire.  Granted, NGD could conceivably be on its way to zero, and we should at least be prepared for it, unlikely though it might be. But as far as speculations go, we could do far worse. The company is a well-regarded multinational with an enthusiastic following and productive mines on three continents. It's shares are surely out-of-fashion, but that in itself is not an argument for shunning them. Accordingly, I'll continue to recommend bidding 0.96 for 400 shares -- just above at Hidden Pivot support at 0.94 (see inset).

Expect securities markets to bend toward increasingly menacing realities in the weeks ahead. The crazed spectacle of the FAANG stocks in particular ratcheting moonward as geopolitical events threaten to spin out of control has become too unsettling to last for even another day.  It's one thing for shares to climb a wall of worry, but quite another for them to act as though the wall did not even exist. A couple of months ago we could dismiss tariff threats as just Trump playing poker with our trading partners. Who knew the leader of the free world was going to go "all-in" every hand? And now he's escalated a dispute with Turkey, catalyzing a collapse in the lira that had been coming since Erdogan started tampering with the central bank months ago. This has increased systemic risk in the global financial system simply because the players themselves think it has. And yet, until Thursday, the wack-jobs on Wall Street maintained their focus on corporate earnings, blithely ignoring the headlines in order to ballyhoo every instance where companies beat the estimates of the Street's best and brightest pencil pushers. Investors' perspective and priorities are about to change dramatically, and not because Turkey and China have come around.

It took buyers nearly five hours of diligent head-butting to get past the 254.06 Hidden Pivot resistance I'd flagged here Friday. The tedium allowed subscribers to savor the put options they'd bought for around 1.20 before DIA fist-pumped its way to a marginal new high that stopped out our short position for a loss of about $84.  I am reluctant to infer that such a feeble short-squeeze could be the beginning of a further push to the 257.09 target shown, but I'd come around if DaBoyz can close this hoax above 254.06 for another day or trade higher than 254.84 intraday. We can try to get on board belatedly via a 'mechanical' set-up if the opportunity arises, so stay tuned to the chat room and Rick's Picks  'Email Notifications' if you care.______UPDATE (August 6, 2:57 p.m.): Today's modest but effortless move higher has shortened the odds of DIA reaching the 257.09 target noted above over the near term. ______ UPDATE (August 8, 8:45 p.m.): DIA's leap to 256.75 earlier in the week brought it to within 0.34 points of the target, but that's not close enough for us to consider it fulfilled. If you've made money being long on the way to 257.09, you can short there aggressively using out-of-the-money puts that expire in 5-12 days. Stop yourself our if they trade for 20% less than you paid. _______ UPDATE (August 12, 5:08 p.m.): Buyers sputtered out at 256.76, a scant 0.33 from my target, causing DIA to fall sharply as the week ended.  The target is still valid in theory, but since we don't usually try to leverage sloppy seconds, I'll suggest backing away from the trade suggested above.

TSLA, arguably the most headline-manipulated stock that ever was, has died $20 shy of the 407.86 rally target given here earlier despite a full-court press by the usual hypesters. Musk himself was one of them, starting the ball rolling with a sensational tweet earlier in the week about taking the company private at $420 a share. It was followed by a conveniently timed story about Saudi Arabia's sovereign-wealth fund taking a 5% stake in the company.  Overshadowing these factors, at least until Alzheimer's-plagued 'investors' forget about it in a few more days/hours, was actual news that the SEC was looking into whether Musk's tweets were strictly kosher. What are they going to do if not -- put him in jail? Any fine would be a fraction of what is returned to the usual suspects when the stock next rallies. Whatever happens, I'll be removing TSLA from the touts list for a while, since its engineered ups and downs have become an annoying distraction from the usual bizarreness of the stock market. ______ UPDATE (August 12, 5:08 p.m. EDT): There must have been a score of articles and think-pieces about Tesla out over the weekend. The gist of them was that it's time to stick a fork in the stock, it is done. It's not just the ridiculousness of Musk's claim that the company will be profitable from now on; it's the fact that he has strayed so far from his original goal of selling enough expensive cars to pay for the mass-production of cheaper ones. What drives corporate strategy these days, it would seem, is not 'vision,' but the ups and downs of Tesla shares.Why else would Musk throw a Hail Mary like last week's announcement that he had lenders lined up for a buyout, and that the company would