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V-shape mania appears to be tapering off. Years from now, market historians will come to regard the spectacular rally since late March as a case study in mass psychosis. The explosive resurgence of bulls is not only unsupported by economic reality, it flouts common sense in ways that only extraordinary popular delusions can. There is the implicit notion, for one, that just a handful of supposedly bulletproof multinationals -- Apple, Facebook, Microsoft, Amazon and Google -- can carry the global economy on their backs, and that this justifies ever-expanding multiples for their shares. Even before the pandemic hit, Apple, the biggest and most popular holding in institutional portfolios, had its problems. Most of the firm's revenues come from the sale of iPhone, a dense handful of electronic wizardry with a high price tag that has left Apple acutely vulnerable to economic downturns. If cult buyers stretch the useful life of their phones by just a couple of years, as seems likely in the severe global downturn recently begun, this will have an outsize impact on the company's revenues. Cupertino's best and brightest have been hard-pressed for a decade to come up with disruptive alternatives. Earlier this year, Apple announced with considerable fanfare that it was diversifying into entertainment, arguably the least innovative business they could have chosen. Covid-19 has brought content production to a halt, but there were problems to begin with because the field was already glutted with aggressive, well-capitalized players. Investors have ignored the negatives, and it's hard to find even a single analyst with a bad word to say about Apple. But do they or any one else honestly believe the company's shares deserve to be trading 10% above the record highs achieved before the global economy tanked? Middle Class 'Tapped Out' Another reality check for V-shaped

The 10,341 rally target disseminated her last week was narrowly missed, meaning it is still in play theoretically. That implies that a pullback to the green line would set up a 'mechanical' buy with a stop-loss at 9368.00.  I am not recommending the trade, however, since initial risk would be around $4870 per contract. You might want to paper-trade it anyway just to see whether our long winning streak using these big-picture set-ups continues. If you substitute QQQ calls and actually do the trade, be aware that the green line is not to be construed as a possible reversal point. In fact, it serves just two useful purposes, once of which is to let us know when a 'mechanical' trade has been signaled. _______ UPDATE (Jul 1, 10:04 p.m.): Buyers easily pushed past the 10,193 midpoint Hidden Pivot shown in this chart, shortening the odds that D=10,657 will be achieved. An unlikely drop to x=9960.75 would trigger a 'mechanical' buy, stop 9727, but p itself would become a buying level, stop 10.038, on a retracement that has come from a high very near p2=10424.

If you thought the resurgence of Covid-19 in the U.S. would put a damper on Wall Street's orgy, you'd have been wrong. Stocks continued their heedless ascent on Thursday even though the pandemic is close to extinguishing a fragile economic recovery that had barely gotten off the ground. The Dow rose 300 points, demonstrating yet again that champions of the V-shaped recovery still hold sway in the markets.  Two consecutive down days seems to be as bad as it gets any more, regardless of the headlines.  This observation in itself is reason for extra caution, since it implies that we've all gotten a little too used to buying the dip on day three. One of these times, probably soon, that dip is going to turn into an avalanche that will last for weeks.

It was a real shocker to see stocks get drubbed merely because of a nasty resurgence in the coronavirus. V-shaped mania was overdue for a breather, though, and we should be prepared for perhaps another day or two of selling.  But given that there is a quite bullish target outstanding in AAPL, the most institutionally beloved stock in history, don't be surprised if bulls are raring to go next week or even earlier when they realize that the latest outbreak will not make the coming Second Great Depression any deeper than it was already going to be.  That kind of thinking is guaranteed to put a smile on Wall Street's face and a song in its obsidian heart -- this song perhaps.

AAPL has blown past a longstanding rally target at 370.15, implying it is bound for yet another at 385.48 that lies a further 5.4% above. Because the stock is almost certain to get there, the broad averages can be expected to move higher with it. This seems hard to believe, given the grim turn of pandemic news. Fauci sees no slowing of Covid-9 this summer and downplayed the idea that hot weather can affect it.   That is turning out to be true in hot, muggy Florida, which in the last few days has shot up to the top of U.S. trouble spots.  Businesses struggling to survive until 'something' changes for the better are going to have a rough time getting though the summer. However, if AAPL continues to lead the charge on Wall Street as it has been doing for years, it would mean that none of the foregoing  will even remotely faze stock-market bulls.

AAPL, the most owned and institutionally loved stock on this planet or any other, has turned our longstanding rally target at 370.15 into chop suey, telegraphing still-higher prices to come. Specifically, the stock is an odds-on bet to reach D=385.48, at least, given the way short-covering bears shredded the 359.03 midpoint resistance after the close. Even the sleazeballs who work this stock couldn't avoid a pullback from the secondary pivot at 372.26, since, as we know, all vehicles in all times frames, whether moving up or down and irrespective of the news, reverse 100% of the time at p2 (just kidding, sort of).  Anyway, we'll look for ways to leverage a bullish bias -- not only in this stock, but in all stocks traded around the world, since AAPL is now carrying them effortlessly higher. _______ UPDATE (Jun 24, 7:16 p.m.): Today's hard selloff did not change the odds of AAPL's reaching 385.48.  In fact, the weakness tripped a mechanical buy at p=359.03, stop 350.21. I'd suggest paper trading this one, given that the initial risk is almost $900 per round lot. If it works, it will demonstrate yet again how 'mechanical' trades allow us to go against our fears and doubts. _______ UPDATE (Jun 25, 5:51 p.m.): For those of you who are paper-trading this one, or are in the trade with real money, I'll recommend taking off 25% of the position at a current price of 364.60. That will effectively reduce the cost basis of the 300 shares that remain to 357.17.  Offer an addition round lot to close at 366.70.

Violence has erupted in Seattle, Washington D.C. and some other cities Monday night, a development that is likely to fuel a continuation of the rally that kicked off with a short-squeeze late Sunday. There were other factors present that Wall Street seems to love, include a resurgence of Covid-19 nationally and a some dreadful news concerning the disease itself. It would seem that many of the newly infected are young people who have not shown symptoms. They are turning up at hospital emergency rooms in droves nonetheless, leaving care facilities in a quandary about whether to send them home. This trend could all but negate the value of contact tracing, since it will open hospital doors to millions of hypochondriacs. Investors might need a little more bad news to jolt stocks into a yet another bullish frenzy, but this could come as early as this week if the rioters and looters return in force. The move to de-fund police departments may have gained a step with news of the gang-related shooting deaths of two three-year-olds who lived, respectively, in Baltimore and Chicago.  [Late-breaking bulletin: Index futures are falling, but probably not because investors fear America is coming unraveled. More likely, it is just the usual sleazeballs pulling their bids so that stocks can fall hard enough to exhaust sellers. That is how nearly all big rallies are propagated -- with short-covering from artificially induced lows. It is a source of buying power that would continue unalleviated even with the warning sound of trumpets from on high.]

Although the rally on Wall Street flouts common sense and arguably even sanity, born-again bulls continue to rampage. What will put an end to their foolishness? Surely not more grim economic data, nor an increase in what is already the highest unemployment rate since the Great Depression, nor a wave of business failures that could eventually asphyxiate the consumer economy. None of these problems has even fazed investors over the last three months. However, creeping doubts about whether Trump is still a shoe-in to win in November could soon make further, upward progress impossible and even reverse the rally precipitously. It is hard to predict exactly when investors will get a whiff of this possibility strong enough to throttle the bullish hubris that has dominated the business sections lately.  They may already have caught the scent of trouble, since stocks spent all of last week in an ominous stall. It became clearer as the week wore on that The Smart Money was distributing shares as gingerly as possible in order to avoid suffocating the delicate mix of buyers said to be driving the rally. The news media has invented the story that the buyers are largely millennials incited to day-trade by America's long lockdown. If so, it's difficult to imagine them, ensconced in their parents' basements, accumulating exorbitantly priced FAANG stocks inflated by the Fed to simulate economic health. The Robinhood crowd may have been responsible for driving the forlorn shares of Hertz into a reckless spasm unlike any ever witnessed.  But HTZ was selling for 40 cents a share, and it is far easier to goose the stock above $5 than to budge a $2600 share of Amazon an inch. Forget the Polls Whoever was doing the buying, they will soon have to reckon with the fact the Trump

Last Sunday night's powerful short squeeze was obviously weighing on bears' minds all week, making them too fearful to push the futures lower with any conviction. Friday's session ended with a timid breakdown that triggered a theoretical 'short' to p=3012.88 of the chart shown. We won't speculate on whether it will hold, but if not, that would signal additional downside over the near term to as low as 2869.50. Even so, I'll recommend bottom-fishing at p using an entry tactic that risks no more 1.50-2.00  points initially. _____ UPDATE (Jun 22, 8:25 p.m.): I am just a spectator now and no longer trying to get short, since it feels like everyone else is trying too. I still doubt the futures are going anywhere -- other than down once DaBoyz have finished distributing as much stock as the traffic will bear. That could happen today, tomorrow or next week, but it's pointless to obsess over the question of exactly when. _______ UPDATE (Jun 23, 8:55 p.m.): Wednesday will usher in Day 7 of a skillful distribution by DaBoyz. Conditions are perfect for this, since nothing says 'Buy buy buy!' like the resurgence of a pandemic.  V-shaped-recovery bozos, Kudlow chief among them, took a hit from Fauci, who asserted that the virus would not slow down over the summer. The damage this will do to businesses that are barely surviving is incalculable, and that too was evidently deemed a 'positive' on Wall Street, since it could coax new stimulus from the Guvmint. _______ UPDATE (Jun 24, 7:38 p.m.): There's no reason for speculation or doubt, since the futures' impending interaction with a midpoint Hidden Pivot at 3012.88 should tell us all we need to know.  If the support is crushed or the September contract closes for two straight days below it, that would