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With government bond yields around the world near multi-year lows, U.S. stocks are in a dither. Should they take a bold leap to new all-time highs, defying mounting expectations of a global economic slowdown? Or should they instead fall to a more sustainable, cruising altitude? My own technical outlooks suggests they could do both:  first with a rally of about 9% that fulfills a 3095 target in the S&P 500; then, with a dramatic fall of 20% or more into bear market territory. The Masters of the Universe Universe who manipulate and control the markets will be hard-pressed to decide in the weeks ahead. But it seems increasingly unlikely that they will be able to hold shares aloft for much longer as economic conditions continue to deteriorate. There is no denying this is happening.  Last week brought more troubling developments on several fronts. Orders for durable goods plunged 2.1% in April, weighed down by the Boeing's deepening scandal. In Japan, investment in machinery was weakening amid concerns over growing trade tensions between the U.S. and China. Modi was reelected as India's prime minister, portending tighter constraints on U.S. tech companies and on retail giants Amazon and Walmart. And copper, a reliable leading indicator of global growth, was trading 9% below its April peak. China, the biggest player in this market, accounts for fully half of world demand. Low Unemployment Overrated Against all of these negatives, economists and the news media would have us believe that America's low unemployment rate is a major, offsetting positive. I have argued here before that this statistic is vastly overrated and of little value, other than as fodder in presidential election campaigns. The fact remains that 3.6% unemployment will have almost no impact on the mountain of debt that eventually will pull America into a

DaBoyz showed a deft touch as the week drew to a close, guiding the broad averages to a respectable close even though there were no buyers around. Stocks often soar ahead of summer holidays, but this Memorial Day weekend they seemed challenged merely to stay in positive territory. Although there were no aggressive bids in evidence, especially for tech stocks, neither were there any urgent sellers. The result was a moderate rally that saw the Dow Industrials rise 108 points and the S&Ps tack on a negligible 6 points. Seasonality clearly failed the bulls, and that could have bearish consequences when stocks begin to trade again Monday evening. Of course, traders could always develop amnesia over the three-day holiday, forgetting about the things that have been weighing on stocks these past few weeks. Tariff-war headlines in particular have been unsettling, although Trump's spin control has helped somewhat to calm the herd. He keeps hinting that a deal is coming, even if it appears that not much of  one is possible. Some high-minded banter in the Rick's Picks chat room illuminated the spectrum of possibilities. "There is a lot to like about the Chinese," noted one subscriber. "They have a really diverse culture, they are hard working and smart. The problem I would agree is their form of government as it grows increasingly oppressive and dictatorial. They are extremely threatened by the tough talk out of Washington and have responded by inciting nationalistic feelings on a billion and a half obedient citizens who never felt threatened by America before. If they would react this strongly to the mere demand to trade fairly can you imagine what they will do if push comes to shove over Taiwan? Risks to the West "If past behavior is the best predictor of future actions we

AMZN remains on track to fall to at least 1774.26, a Hidden Pivot support given here earlier. The stock just missed rallying last week to 1881.70, where it would have signaled an enticing 'mechanical' short. A somewhat riskier short would be triggered by a rally touching 1845.89, the red line. This trade would require a stop-loss at 1869.76. The cheapest leveraged bet here would entail buying expiring at-the-money calls with AMZN trading within 25 cents or so of the target._______ UPDATE (May 31, 10:)2 a.m. ET): The stock's plunge today has fulfilled the target with a low just beneath at 1770.90. A $20 bounce ensued but is fading. ______ UPDATE (Jun 4, 5:54 p.m.): As impressive as today's short-squeeze rally may have seemed, it was not as impressive as this bearish pattern, which implies minimum downside remains to p=1599.

The FAANGs and a few other 'lunatic' stocks beloved by institutional buyers have deservedly been getting thrashed, but it looks like the pain is unlikely to abate any time soon. My downside targets in two key stocks, GOOG and AMZN, are well below current levels, implying they will remain a drag on the market. One stock that has been bucking the tide is Microsoft, which is within a three-day rally of all time highs. DaBoyz seem to have settled on the stock as their top choice for flight-to-safety, presumably because the company has got its subscription-revenue model dialed in. This provides a very predictable stream of profits that has become nearly as bomb-proof as utility company earnings. Another plus is that, unlike Apple, Microsoft hasn't announced plans to jump into the streaming content business. Indeed, the software giant has shunned hubris in favor of quietly making money the old-fashioned way. It has been winning over customers (including me) with improved products, but also with a level of customer support that has all but disappeared from the digital world.

[Jim Grant is an old-school observer of this economic age and one of its most brilliant commentators. Following is the speech he gave in accepting the 2019 Bradley Prize, which recognizes those who have helped further the principles and institutions of American exceptionalism. RA] Ladies and gentlemen, it's a blemish on the age that so many of us know the name of the Federal Reserve chairman. In a better world, that government functionary would be as obscure as what's-his-name, the home plate umpire who got no arguments calling balls and strikes at Yankee Stadium the other night. Who elected the Greenspans, Bernankes, and Powells to be the arbiters of interest rates, asset prices, the rate of inflation and who knows what else? It wasn't Alexander Hamilton. Nor was it the Fed's own founders. If the authors of the 1913 Federal Reserve Act could return to earth to inspect their handiwork, the shock might kill them all over again. Congress envisioned an institution to function in the context of the international gold standard. This meant a dollar defined as a fixed weight of gold. You should have heard old Carter Glass, the congressional father of the Fed, berate the critics who dared to suggest that he was scheming to replace the gold dollar with a scrap of green paper. Well, Glass himself is to blame for much of the evil that followed. The legislative preamble to the act that Woodrow Wilson signed describes a bill "to furnish an elastic currency, to afford means of discounting commercial paper, to establish a more effective supervision of banking in the United States-and for other purposes." Financing Wars These other purposes quickly became the principal ones. No sooner did America enter the Great War than the Fed lent a hand to facilitate the government's borrowing.

Stocks are in wafting mode, indifferent to tariff wars, slumping retail sales and impeachment talk. The broad averages have been racking up impressive gains even when buying interest is weak to nil. It certainly felt that way on Tuesday, when the Dow Industrials rose nearly 200 points on the opening bar, then hovered aloft for the rest of the day. For every tepid buyer it would seem that there is an even more tepid seller.  The only stock that has attracted bears with some gumption is TSLA, which has been fighting for its life lately against a steady stream of ugly headlines. Short sellers had better make the most of enticing odds in the stock, since they're not likely to catch a favorable breeze elsewhere. The chart (inset) shows VXX, which tracks short-term volatility in the S&Ps, headed at least 6% lower over the next day or two. If so, the index, currently trading for around 2864, is bound for 2900. Play the FAANGs, over-stoked as they are, and you can't miss.

Bulls and bears look to be in a state of jittery equilibrium, like two arm wrestlers unable to put the other down. The benefit of the doubt should go to the former, however, since the steep rally from December's Marianas Trench has an unachieved Hidden Pivot target at 3095, basis the S&P 500 cash index.  That's an 8.4% trek from these levels, and if it is achieved with the power of the buying binge we saw as 2019 began, we could be there by late July.

So how does Game of Thrones end? Never having watched the show, I couldn't care less. But thirty million fans evidently do. We haven't seen America this worked up about so trivial a concern since Kristin Shephard shot J.R. Ewing nearly 40 years ago in a landmark episode of Dallas. TV was free back then, and so the audience worldwide was more than ten times that of Game of Thrones.  Could the current obsession with a hyped-up TV show explain why the stock market is flirting with new record-highs even though the economic world is on the brink of recession? Unfortunately, this is no exaggeration. Europe has been slumping toward growthlessness while China and the U.S. are in a tariff war that seems likely to worsen, reversing a decades-long global trend toward freer trade. This is a very big deal, a watershed change in a seemingly rosy economic picture, but you couldn't tell this from watching the stock market's near-vertical ascent since January. The rally continued last week ahead of an ominous report that capital spending, a key driver of economic growth, fell dramatically in Q1 for a broad cross-section of large U.S. companies. (Click on thumbnail inset to see this graphically.) Stocks have risen anyway, not because investors are convinced of a brighter tomorrow, but because the flow of funny money into stocks has become well nigh unstoppable. It is a perpetual-motion machine requiring only a drop of lubrication from sunny unemployment numbers to keep things humming. In reality, low joblessness reflects only a superficial aspect of the U.S. economy's supposed strength.  It is a trickle-down effect that has not helped to alleviate the massive debt burden of Americans one bit. To the contrary, it has only pushed consumers to borrow more, making the inevitable day of reckoning even

Bitcoin is on the move again, a venomous snake in the grass. You might expect to find a reasonable explanation for cryptocurrency's sudden, spectacular rise from the dead. Instead, you get only dim-witted speculation that institutional players are starting to warm to it again. Fidelity, for one, reportedly will be buying and selling bitcoin for institutional customers starting in a few weeks. While that may be good news for cryptomaniacs, it hardly justifies the doubling of bitcoin's price since early April. Recall that blockchain "money" was reviled and repudiated after it fell to $4,000 in less than a year from a $20,000 peak at the end of 2017. Since then, cryptocurrencies have remained under a dark cloud, not only because of the disastrous outcome of the 2017 bubble, but because of security breaches and scandals that ordinarily would doom a less addictive speculative vehicle. Now, apparently, all is forgiven or forgotten -- not because Fidelity and their ilk want to better serve their customers, but because they sense that speculators, having learned nothing from the first bubble, are hot to trot again. Mourning Is for Sissies It is predictable that bitcoin's rise from the pyre will end badly. But it does give the speculative mania that has been driving the stock market a new lease on life, since bitcoin nuttiness will have to run its course a second time before it comes to a fitting end. The chart (inset) is remarkable because, in most instances where an investable has gutted and disemboweled so many fools, it has taken a while to forget and rebuild. Base-building is what saucer-shaped bottoms are all about. In bitcoin's case, however, there has been no such seemly interval for contrition, mourning and reflection. Bid anew by fools, block-chain money has lurched back to life and