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Flush with stimulus, the states are in a spending mood that can be summed up in a single word:  TOGA!!!!!  Take Oklahoma. Their latest budget reflects an annual increase of nearly 18%, according to a report from the Associated Press. It includes bigger earmarks for education, corporate and personal tax cuts, credits for school choice and even for film producers.  In Florida, outlays will rise by about 11% to a record $101.5 billion.  The extra spending will provide "bonuses for teachers, police and firefighters, and new construction projects at schools and colleges."  Believing they will still have money to spare, Florida lawmakers have also expanded sales-tax breaks for school and hurricane supplies and created a tax-free week for purchasers of museum and concert tickets and recreational gear for camping, fishing and surfing.  In New York, a $212 billion budget is nearly 10% higher than last year's, most of it coming from Federal relief. The Cuomo government is planning to boost aid to schools by $1.4 billion, and spend another $1.3 billion to overhaul Penn Station, among other projects. What Could Possibly Go Wrong? Federal aid amounts to fully 15% of what the states took in during fiscal year 2019, according to Moody's. Since they have until 2024 to spend the most recently disbursed Covid money, some states are waiting until later in the year to budget their windfalls. No question, increased spending by the states will have a bullish impact on the U.S. economy for the next several years. Even so, some are wondering what will happen when the money runs out. “I’m afraid that we are spending money and making commitments that we will not be able to sustain once that one-time federal money goes away,” said Sen. Bob Rankin, a Republican who sits on Colorado's joint budget committee.

The Cubes have achieved escape velocity after triggering a textbook 'mechanical' buy in mid-May at the green line (315.29).  Now they looks all but certain to achieve p2=350.90 at a minimum, but buyers will have to impale that pivot to 'guarantee' more upside to D=368.70, a Hidden Pivot resistance that at the moment is no worse than an even bet to be achieved. I am nonetheless tracking a bearish butterfly spread reportedly acquired by a single subscriber: four June 28 280/290/300s. A longshot bet on the unthinkable, he paid an average 0.18 for them. I would advise against trying to buy more, but stay tuned for a possible buy signal on the way up. _____ UPDATE (Jun 24, 8:03 p.m.): The Cubes finally reached the 350.90 rally target I'd said was a shoe-in, but they were unable to hold above it. Let's see what the next day or two brings before we bet the pass line on D=368.70. _______ UPDATE (Jun 26): It took forever, but the Cubes finally achieved the 350.90 rally target I'd all but guaranteed above. No one ever mentions this vehicle in the Trading Room any more, but I'll leave it on the sheets for subscribers who like to butterfly distant strikes. The next one of interest lies at 368.70 (as noted above), but there might be another kind of play if QQQ plummets to p or even x in this updated chart.

When the week ended, bulls held a small edge, having turned the the plunge that began the week into a swoon with a nearly $6000 rally. It triggered a 'mechanical' short at the green line (37,179) but because an earlier shorting signal generated on May 23 took fully two weeks to produce a profit, I didn't recommend a second attempt.  Now it's a coin-toss as to whether the rally continues, stopping out a bearish pattern projecting to 26,422, or even to 21,043. However, I'll keep the bar at 45,837 to tell us when it's okay for bitcoin buffs to start getting excited again.  In any event, I'll be looking to short this beast rabc-style following a 1400-point (or so) drop from around 41,737. _______ UPDATE (Jun 16, 1:25 a.m.):  BRTI tripped an rabc short at 40,638, as shown in this chart.  No subscribers reported doing a trade, so I have not established a tracking position. If you did, 75% of it should have been covered by now.

There was zero chance shorts were not going to get their chains jerked Friday with a feint above the earlier-in-the week high at 4230.00. I said so in the chat room hours before the breakout, but without any great confidence about whether it was bulls or bears who would ultimately get hosed. If it had happened earlier in the session, I would have advised an 'reverse abc' short using this pattern.  However, given the way things played out, we'll have to wait and see what Sunday night brings before we can formulate a new strategy. My gut feeling is that the angsty price action will settle in favor of bulls and that we will be lifting our sights accordingly to p2=4325.50, but there's no point in speculating until the new week begins. _______ UPDATE (Jun 8, 10:30 p.m.): What a shock. The futures spasmed up and down, 20 points at a time, without going anywhere! See my post in the chat room this evening if you want a more interesting story. ______ UPDATE (Jun 10, 8:58 p.m.): Even though the futures have spent a week in limbo, there is no reason to think they won't reach the 4310.75 target of this pattern, and soon.

I was going to purge QQQ from the list for lack of interest, but it shall remain for now, since it could conceivably yield a decent short when the Grim Reaper finally comes calling (assuming he doesn't keel over dead himself waiting for this bull market to end). For the moment, I'm mildly persuaded that the epic delusion that has sustained the bull trend will carry the Cubes to new heights: p2=350.90, the secondary pivot of a pattern projecting to as high as 368.70. Meanwhile, I am tracking a low-risk short: four June 280/290/300 put butterfly spreads reportedly acquired Friday by a single subscriber for 0.20. No action will be necessary unless QQQ collapses.

Although the pattern shown, with a 365.67 target, is clear and compelling, bulls have yet to tip their hand with a skirmish at the 350.44 midpoint pivot. They've yet to even reach it, actually, but until they do, and roundly thwomp it, we cannot confidently infer the target will be reached. For now, let p=350.44 serve as our minimum upside target for the near term.  The pattern should also be a winner for 'mechanical' set-ups, given the power of the impulse leg. _______ UPDATE (Jun 16, 12:35 a.m.): Bulls look more enfeebled than I could have imagined in May. Five weeks of trying have still yet to reach p=350.44, and I'm not sure whether this is a subtle sign of disaster to come, or perhaps just a minor stroke, but stocks feel leaden.

If we'd known the pandemic would trigger the most reckless monetary blowout in history, could anyone have imagined that the U.S. dollar a year later would have fallen by just 14%? That doesn't even qualify as a bear market, just a middling correction of a powerful bull run begun in 2008, a year ahead of the historic rally in stocks.  The Dollar Index was trading around 70 at the time, about to embark on a nine-year climb to 104 early in 2017.  It subsequently swooned as low as 88 early in 2018 but hasn't traded any lower since; it's currently at 90.12. That's with the Fed showering trillions of dollars in helicopter money on America, a feat that achieved a dubious milestone recently when central bank purchases of Treasury debt exceeded purchases by foreigners. Biden for his part has been ramping up outlandish spending proposals, promoting the timeless Democratic canard that "the rich" will pay for it all. The proposals are likely to grow even more outlandish, since Biden fears that a Republican Congressional victory in 2022 could close the window of opportunity for a fiscal expansion dwarfing FDR's New Deal. Stimulus 'a Drop in the Bucket' So why do I continue to insist nonetheless that we are headed into a catastrophic deflation? The short answer is that even tens of trillions of stimulus dollars is just a drop in the bucket compared to a deflationary juggernaut poised to suck inflation into a black hole. When the bubble finally pops, here's a list of things that will deflate like a tire with a hole in it before the central bank has a chance to even attempt a resuscitation:  * A hyperleveraged derivatives market valued notionally at $2 quadrillion  * The public-pension systems of two-dozen states  * Residential and commercial real

Sucks? Yeah, sure. Maybe in the eyes of crypto fanatics and the quacks who re-invent monetary policy every month. In actuality, few things in the material world suck less than gold. Sorry to resort to headline flim-flammery to get your attention, but it was time to upgrade our enthusiastic endorsement of gold -- and silver! -- to an outright declaration of love. If you’re a bullion investor, this means we are confident you can buy the stuff now without fear or qualm. And if your safe deposit box is already filled to overflowing with ingots and precious-metal coins purchased when gold was $300 an ounce, it’s time to rent more space. You can even tell kin and friends that bullion is about to embark on a long, profitable ascent without having to worry about their getting burned. More likely is that they will thank you profusely a year from now, especially if the money they’ve plowed into metals was drawn from tech stocks and other appallingly overpriced shares being distributed to greater fools these days by Wall Street’s mountebanks. Bullion's Correction Is Over Regularly readers of Rick’s Picks will know that we quickened our bullion drumbeat earlier this month after Comex futures exceeded a small but technically significant price peak on the daily chart just above $1800. Nothing as promising as this had happened since December, and it suggested that the painful correction begun from around $2060 last August was close to an end. There were more bullish signs to follow. For one, minor ABCD rallies began to exceed their ‘D’ targets, even as corrections fell shy of them. Under the rules of our proprietary Hidden Pivot System, this was unmistakable evidence that the dominant trend had shifted from bearish to bullish. Perhaps even more noticeable was the absence over

A Hidden Pivot at 31.51 has served as our minimum upside target for the intermediate term, with a larger-degree target at 35.02 looming above it. Since July Silver has been too strong to swoon to a 'mechanical' bid on the bigger charts, here's a smaller one that projects to 29.25 that you can use to get long 'mechanically'.  The futures already tripped a buy related to this pattern when they pulled back to the green line (27.76) last week, but they would do so again by retracing to p=28.25 after trading up into the range 28.75 - 28.85. _______ UPDATE (June 1, 2:50 p.m.): Anyone aboard?  The trade did not trigger in the way I'd described, but if you did it anyway, use a 27.91 stop and a 29.24 target.  ______ UPDATE (June 1, 10:43 p.m.): The trade was stopped out, but a second trade that is more appealing would trigger at x=27.76 (shown in this chart).  Initial risk on four contracts would be $10,000, so the trade is recommended only to subscribers who either know how to cut that down to $2,000 or less using 'camouflage' or an 'rabc' entry trigger; or to those who have made significantly more than $10,000 from my previous recommendations in silver/gold futures. _______ UPDATE (Jun 2, 8:28 a.m.): The overnight low occurred at x=27.765 exactly, triggering the trade. The futures have since bounced as high as 28.07, generating a paper profit of a little more than $6000 on four contracts. Exit half of the position now. ______ UPDATE (Jun 2, 11:29 p.m.): Several subscribers reported doing the trade, which is currently showing a theoretical profit of about $2800 per contract with July Silver at 28.330.  With a perfectly timed entry to fill your sails, you're on you're own now, shooting for the 29.24 target noted