Free

Coronavirus anxiety has replaced trade war anxiety as the one-size-fits-all explanation for the stock-market's bad days.  Wall Street initially thumbed its nose at the virus threat, staging a strong rally early last week even as the death toll mounted in China.  But when a few cases turned up in the U.S. and airlines started canceling flights in and out of China, investors took notice. Their anxiety became manifest in Friday's 603-point decline in the Dow Industrials, and no one was suggesting the selloff was climactic. For unlike tariff anxiety, which rose or fell every time Trump tweeted on the subject, the path that coronavirus takes is unpredictable and could remain so until illnesses and deaths either start to taper off or become catastrophic. Will the stock market be able to bide its time, hovering somewhat beneath current levels, until the virus is better understood? That would be the optimistic scenario, especially since the economic fallout from coronavirus has already driven commodities, most significantly crude oil, sharply lower. This could spread more than mere ripples into the economy, since inflated oil prices underpin the global financial system's hyper-leveraged store of collateral. A Scary Place to Get Long From a technical standpoint, it is troubling that the Dow's seemingly invincible rally sputtered out without having reached the 29,757 target shown in the chart. This is close enough to the milestone number 30,000 that it should be considered magnetic. A case of 'close but no cigar'?  Wall Street would be forever shamed if the greatest bull market of them all were to die just inches from so obvious and compelling a target.  It will remain viable nonetheless unless the pattern's point 'C' low, 27,326, is exceeded to the downside. I should also mention that, under the rules of our trading system, the Dow

It's been three weeks since April Gold generated a bullish impulse leg on the hourly chart, but it could happen as early as Sunday night if there's follow-through to Friday's upswing. That would exceed  the 1603.00 'external' peak shown in the chart, refreshing the energy of buyers. It would also put p=1616.50 of this pattern in play as a minimum upside objective over the near term. As always, an easy move through a midpoint pivot would puts its associative 'D' target in play -- in this case 1690.20. We can trade the various Hidden Pivot levels long or short as opportunities arise, so stay tuned to the chat room if you're interested. Incidentally, there is an alternative point 'A' low $2.80 above the one I've used, but we may have to wait until the futures hit the respective p midpoint of each before we choose which 'D target to use. _____ UPDATE (Feb 3, 9:37 p.m. EST): Gold's head-fake Sunday night was short-lived, falling $4.60 shy of the 1603.00 benchmark identified above. The subsequent selloff, all too typical for gold, occurred when index futures took flight, propelled by panicky short-covering.  I have nothing new to offer, but the 1616.50 target can still be used as a minimum upside objective. _______ UPDATE (Feb 4, 9:07 a.m.): Gold is getting pulped today, as usual, because the stock market is in the grip of an insane rally. The 1616.50 rally target will remain viable IN THEORY until such time as C=1542.80 is penetrated to the downside. This will come as scant consolation to gold bulls, but it is what the charts say. Worst case, short term: 1540.90 (60-min, a=1603.00 on 1/8 at 1:00 a.m.) _______ UPDATE (Feb 4, 9:47 p.m.): The futures have tripped a minor rABC buy signal of modest appeal at

I'm tracking a long position consisting of 400 shares purchased last week for 28.39 when this vehicle dove to 28.23. Ordinarily I would suggest taking half off at the red line, 29.09, but because so many subscribers took the trade, and to demonstrate how well these 'mechanical' set-ups work to those who hadn't tried one, I'm being a little greedy this time. Accordingly, I'll recommend that you continue to offer 200 shares (or half of the original position) at 29.42. We'll look to exit another 25% if and when GDX achieves the 30.50 target. _______ UPDATE (Feb 4, 9:14 a.m. EST):  Gold is getting hit hard ahead of the opening because stocks are once again in the grip of short-squeeze madness. The GDX position will produce a theoretical loss of $288 on four round lots if it is stopped out. I am recommending sticking with it because that is what disciplined trading requires. ________ UPDATE (Feb 4, 9:53 p.m.): The position hung on by a thread today when GDX swooned to 27.77, a dime above our stop-loss. _______ UPDATE (Feb 6, 8:44 p.m.): Were stuck with the position because...well, because we are. Continue to offer half of it at 29.42, with an o-c-o stop-loss at 27.67.

Amazon has taken flight, up $230 at the moment, or a little more than 12%, following earnings announced moments after the close beat analysts' expectations.  The stock looks bound for 2342.79, the Hidden Pivot target in the chart above. You have to wonder who the geniuses are who get paid to do the expecting, since their estimates so often fall a few crucial pennies shy of whatever numbers are released. Do these Wall Street shills perhaps receive bonuses for lowballing their dartboard predictions? This would make sense, since estimates that can be easily beaten have potentially lucrative implications for insiders. Short-Covering Fools If  analysts are merely dumb, even dumber are traders who bet against after-hours eruptions that have become the hallmark of this bull market. Ironically, short-covering fools are the only source of buying power strong enough to goose stocks past heavy layers of supply and prior peaks. The more bets the fools pile up against the aging bull, the more spectacular the stock market's leaps. Just look at Tesla.  The biggest winners, of course, are those who hold millions of shares in the small handful of companies worshipped by portfolio managers. The net worth of these zillionaires grows in mere minutes by sums that took a lifetime for robber barons like Carnegie, Astor, Rockefeller and Morgan to accumulate. Rather than treat himself to a good Cuban cigar, Bezos could buy, oh, New Zealand, or Ted Turner, the Sioux Nation or the Rockettes, to celebrate.

A stock-market rally fizzled for a rare change, possibly because AAPL's after-hours leap Tuesday on strong earnings wasn't quite strong enough to knock the crowd's socks off. It was impressive, to be sure -- a 19-point jump amounting to about 6%. But this evidently wasn't quite powerful enough to be regarded as freakish. Tesla demonstrated what freakish is all about after the close, ripping shorts' testicles off with an 84-point thrust to a so-far high of 659.95. This was somewhat above the ambitious, $639 rally target I sent out to subscribers on Jan 14, when the stock was trading more than $100 lower. The rally is unlikely to have a discernible impact on the the broad averages as the week draws to a close, however, because TSLA, unlike AAPL, is not regarded as a respectable stock that moves higher to discount future earnings, but rather as a rabid badger impelled by one of the most vicious short squeezes in history. TSLA reported 'strong' Q4 earnings after the close, and the imbeciles who were short ahead of this news richly deserved what they got. So will the analyst who ostentatiously predicted TSLA will hit $6000 a share, but that will be another story for another day. For what it's worth, the company would have lost $28 million in Q4 if not for regulatory credits, according to Wolf Street editor Wolf Richter.

A killer virus on the prowl around the planet evidently was not on investors' tiny, fevered brains Tuesday as they reminded us yet again that betting heavily on a rally when stocks have been down for two straight days is nearly always a winner. The S&Ps rose an impressive 32 points, with a corresponding gain in the Dow Industrials to 28,722 that has  made 30,000 an odds-on bet. The leap that Apple shares took when record earnings were announced after the close is likely to have a bullish impact on the shares of Microsoft , Facebook, Amazon and Boeing when the respective companies announce earnings between now and Friday.

AAPL shot higher on record revenues reported after the close, and although the move wasn't quite strong enough to be described as freakish, it did put an ambitious, 337.22 target in play. It could also set the stock up for a 'mechanical' buy if AAPL should pull back to the green line at 313.72 without first having exceeded the so-far high at 327.90. Buyers' failure to hit the target in the moments following the news may have been due to the strong rally that had already occurred during the regular session. AAPL was up around $9 at one point, pushed by buyers who evidently were confident not only about the impending good news, but in the stock's likely reaction to it. This is bound to have a bullish effect on some other corporate giants yet to report this week, including Microsoft, Amazon, Facebook and Boeing. DaBoyz, it would appear, are fully in command once again, inured to any coronavirus news that falls short of catastrophic. _______ UPDATE (Jan 29, 9:23 p.m. EST): If bulls are still in charge, a 'mechanical' bid at 321.56, stop 316.34, should produce a winning trade that hits the 337.22 target shown in the chart. I am not recommending the trade because it is riskier than the mechanical buy at 313.72 noted above, but we can watch from the sidelines nonetheless for signs of weakness (or strength). _______ UPDATE (Jan 30, 3:16 p.m.): For the record. the 'risky' trade proffered above showed a theoretical profit of as much as $1100 on the opening bar. Looking ahead, although I am not in love with the stock at the moment -- not that I ever was -- it would trigger a 'mechanical' buy of larger degree at 313.54, stop 305.88 (see the original chart). The objective would be 336.47

Buyers hung tough on Monday because DaBoyz were able to exhaust sellers ahead of the opening bell. They won't be able to rig the game this way on Tuesday, however, since the 'coronavirus effect'  -- on stocks, not humans -- is already well in play. Rumors continue to swirl concerning the death toll in China, but it would take a very large pile of bodies to slow Wall Street's buying orgy for more than two days. Investable funds are effectively unlimited, implying they will continue to exert irresistible, upward force on stocks. Coronavirus, on the other hand, is hardly an immovable object -- just a scary news story that continues to mutate but will lose force with nut-so investors if dead bodies fail to pile up to the sky.  Absent that pile of bodies, however, and for the time being, bulls would seem to hold the edge. That could change following Tuesday's market close, however, with the release of Apple's earnings. The reaction should give us a good read on the robustness and vigor of the bull market, setting the tone for earnings announcements later this week from the biggies: Boeing, Facebook, Microsoft and Amazon.  

Friday's nasty stock-market reversal was the most interesting we've seen in a long while. The ostensible cause of the selloff was mounting anxiety over the spread of the deadly coronavirus from China to the U.S. and elsewhere. Three cases have been reported so far in the U.S. and 2,000 worldwide, and although no one seems to expect a major outbreak in North America, it's not hard to imagine a mere handful of new cases hobbling, for starters, the airline industry and an import/export sector that was expected to revive because of the recent trade deal.  The spread of the disease in China may already have derailed the country's tepid economic recovery, with a corresponding impact on energy markets that took a beating last week. Heedless Buyers I'd written here on Friday that it would take a lot more than a virus to kill a U.S. bull market that has been powered by reckless buying. But we shouldn't dismiss the possibility that coronavirus could turn out to be the black-swan event that investors knew would arrive eventually. The heavy selling that ended the week was noteworthy because it was accompanied by bullish breakouts in the Dollar Index and T-Bonds. Although it is difficult to predict exactly what this may portend, it is safe to say that if the respective uptrends in these massive markets gain momentum over the next week or two, a major tone change for financial markets and the global economy could lie in the offing.