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If Trump wins in November, it is foreseeable that his many enemies will ratchet up their hatred for him to even more destructive extremes. A bloody civil war would become likely, escalating an already violent cultural battle to a new threshold. How this might impact our schools, workplaces and neighborhoods is unpredictable even if the tactical outcome is not. The red states, wide-open spaces where politically conservative Americans tend to live and work, have superior firepower, to put it mildly, and their geographical vastness has rendered them invulnerable to attack. They also provide most of the food consumed by blue-zone denizens, implying red partisans could lay siege to blue, bringing the color war to a relatively quick end. Natural allies in flyover states include farmers, truckers and meatpackers, along with private-sector workers everywhere whose bosses do not report to diversity officers. Political liberals have taken to boycotting the wares of nearly everyone perceived as unfriendly to their cause. It remains to be seen whether conservatives can get sufficiently aroused to return fire, not only by boycotting every product or service tied to virtue-signaling, BLM-pandering corporate suck-ups, but by disrupting the flow of essentials into the big cities where political radicals live. Starvation Videos at Six! It is not hard to imagine the Democrats' urban strongholds running up the white flag in a month or two, when they've come to resemble hell-holes like the ill-fated Chaz in Seattle.  Cities that have been run into the ground over the last 50 years by Democrats would become far worse, virtually unlivable even for the dregs. Who would want to remain in such a place? Even Antifa, when they are done looting and setting businesses ablaze, return to their parents' basements to quaff beer and watch themselves on television. Watching themselves starve would surely

AAPL fell hard Thursday, although it's too early to tell whether this was just a garden-variety shakedown or perhaps the start of a new bear market. There was news out that some state attorneys general were investigating the company for deceiving customers. But if such investigations ever had consequences or produced results, public floggings for FAANG executives would be grist for infotainment, and Mark Zuckerberg, along with his "don't-be-evil" peers at Google, would be doing hard time. Could Trump's hardening stance against China be responsible for the pummeling AAPL took?  Nearly all of the firm's assembly work is done there, and the company has not exactly embraced the task of moving it elsewhere -- presumably to places where business did not depend on kowtowing to double-dealing, lying, cheating, patent-filching commie scum.

Today's downdraft generated a robust impulse leg on the daily chart, the first time this has occurred since the start of the Covid-19 outbreak in February. Supposedly, fears are growing that Trump's hardball tactics with China could put pressure on AAPL, which does nearly all of its assembly work in China. Why traders picked today to unload Apple shares is unclear, however, since the company's China problem has existed for nearly three years, ever since the tariff war began. Trumped warned Apple years ago to get out of China, but it would seem no one in Cupertino took him very  seriously. That didn't stop investors from piling into the stock since March, driving it into a ridiculously steep rally that was manifestly inured to troubles with China's Communist government. So how far could the stock fall?  That depends on whether the downtrend stretches on for another 2-3 days, breaching a 351.28 low recorded nearly a month ago. If it happens with no significant upward corrections along the way, that would add to the imputed power of the impulse leg, conceivably signaling the beginning of a new bear market.

The pullback from a record high precisely at p2=11,054 should have bulls worried. This is the pattern's secondary pivot, and it would not be the first time that it has stopped a strong rally in its tracks. That is why I called it a potential giant-killer here yesterday, although I was referring to the p2 of a smaller pattern associated with the S&P 500 Index. I doubt that it is mere coincidence that both vehicles have stalled where they did. Now we should expect a retracement to at least p=9579, a midpoint Hidden Pivot that lies nearly a thousand points below. The good news is that the futures would become a fetching 'mechanical' buy, at least in theory, on such a pullback.  There are still higher targets outstanding in the major indices, and that's another reason for optimism. Whatever happens, it looks as though bulls are about to have their mettle tested for the first time in four months.

Tesla eked out a modest profit for a fourth straight quarter, earning a listing in the S&P 500. The stock laid an egg in after-hours trading, however, making money only for naked-option sellers who cashed in on some of the juiciest option premiums traders can recall. Such are the rewards of the most manic, delusional buying spree in stock market history. It could have surprised no one that the company's bean counters were able to tweak Tesla's numbers into-the-black, since that was all that was required of them to earn the S&P listing. What did surprise is that analysts had expected Musk to report a loss due to a Covid-induced sales-and-distribution slowdown. Of course, we knew going in that the average Wall Street analyst couldn't hold down a CETA job sharpening pencils, but in the end the pathetic hacks did their job, lowballing estimates so that the company could not but beat them. TSLA's conspicuous failure to go nuts after the close, however,  is likely to exert some drag on an otherwise rabidly exuberant Nasdaq index for the remainder of the week. Look for DaBoyz to lighten their offers to stretch out the hours and days they will be able to distribute stock to the rubes. Not that the wilding spree is necessarily over. Check out my forecast for the S&P 500 (SPX) below if you want to see how much higher it could go over the near term.

If Tuesday's high turns out to have marked an important top, it occurred in a logical spot -- almost precisely at the midpoint resistance of a weeks-old bullish pattern projecting to 11688.  Even so, bulls held their ground, closing this bloated gas-bag midway between the day's high and low.  My gut instinct would be to short into moderate strength on Thursday's opening, since the Naz look so fatigued. It would become a so-so 'mechanical' buy on a pullback to the green line (10,691), but I am not recommending this unless you know how to cut the risk down to relative pocket change using a 'camouflage' set-up.

A cluster of 'hidden' resistance levels not far above suggests that a major top could be imminent. They are numbered to indicate my first, second and third choice of Hidden Pivots with the potential to stop Covid-mania dead in its tracks. Two of the pivots come from the ABC pattern labeled in blue, and they represent, respectively, the p2 'secondary pivot' and D target of that pattern; the third, in pink, is the secondary pivot of a giant bullish pattern stretching back to 2016. All can be shorted with a tight stop loss, since I expect each in succession to show very precise stopping power. If the opportunity arises, however, you should act most aggressively and with a wider stop-loss at the topmost pivot, 3432.15. _______ UPDATE (Jul 26): Last week's high fell 35 points shy of the lowermost target shown in the chart, 3315.50. The subsequent pullback was relatively mild, and the week ended with bears struggling to push the futures any lower.  Unless the tempo of the selling picks up by mid-week, look for bulls to regain the upper hand and make another stab at 3315. _______ UPDATE (Jul 29, 6:50 o.m.):  Bears are quite depleted, allowing DaBoyz to turn a 3198 midpoint resistance into support with little buying. They are waiting for the right news to pop this beast to p=3315, but I doubt it will go much higher straightaway, so be prepared to lay out shorts there. 

Some interesting things are happening in the markets that could augur an important tone change. For one, the frothing-at-the-mouth idiots who have been pushing Tesla shares into the ionosphere went quiet just a day ahead of earnings. Ordinarily that would be no big deal, but in this case it reflects timidity that has been absent from the stock's absurd rise since March. For two, gold is breaking out and giving up little ground achieved early in the session. We'd gotten so used to one-day-wonder rallies over the last nine years that a little staying power, even intraday, seems shocking. For three, price action in silver is beginning to heat up, suggesting speculative fervor is creeping into the bullion market. And finally, the dollar is approaching a correction threshold that I'd projected months ago. My hunch is that these things together augur a potential major tone change for securities markets, and by extension, for the already beleaguered global economy.

The shoeshine boy is not just giving customers stock tips these days, he is also jumping on hot stocks himself, scalp-trading three or four shares of Tesla, at $1500 a copy, in his Robinhood.com account. That's all the stock these penny-ante schemer-dreamers can afford, and it is why it is not the metaphorical bootblack operating out of his parents' basement who has been driving a handful of stocks moonward, as a story-hungry news media would have us believe. Even so, the shoeshine boy's gambling jones is having its effect on some big players, who for a dozen good reasons have been shorting stocks like Tesla and Moderna all the way up. Panicky short covering is always the most powerful force that drives rallies, since even a sea of Fed funny money cannot float stocks past resistance peaks and through prodigious layers of supply. It takes irrational exuberance and bear panics acting together to accomplish this, but also institutional shareholders who are smart enough to avoid getting in the way. That's why most of the gains in Tesla, Apple and a few other stocks leading the charge have occurred in the dead of night, when volume is practically nil. AAPL will gap up five wholly undeserved points in the wee hours, creating an additional $20 billion of wealth for size players who can afford to buy-and-hold stocks to satisfy their own easy-money jones. The magical result is that money is created even more efficiently than by the Fed, since no borrowing is involved; instead, the winnings show up instantaneously in traders' accounts. This financial fattening occurs, as all manias do, without any real labor.  Stock-market rallies have become the true source of helicopter money, although they are probably not what Bernanke had in mind when he averred that the Fed could