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Index futures were being primed Monday night for a resumption of last week's moderate uptrend. It was built for sustainability rather than speed, and that's why those of us who have been hating everything about the stock market lately should be careful not to underestimate its potential. Its devious sponsors are clever, to put it mildly, and they have been very cautious about letting the short-covering bears who are driving it get too far ahead of themselves. My 2728 target for the E-mini S&Ps lies about 70 points above, implying a further Dow rally of perhaps 600-700 points is coming. Concerning why we distrust this rally no matter how high it goes, here's yet one more reason, from the latest edition of The Wall Street Journal: "Investors are increasing their cash holdings at the fastest pace in a decade, highlighting doubts about the durability of the stock market’s rebound in the first weeks of this year."

How high does this bear rally have to go to fool us into thinking it's the real deal? You don't have to be a technician to answer that question -- just look at the chart. From a visual standpoint, a  move up through the red line would surely get investors' juices flowing. The reason is not just that the Dow would appear to be within shooting distance of the old record high, it would also have pushed past two important peaks created during December's steep plunge. Do we trust our lying eyes at that point? Not unless we want to get slaughtered with the rest of the bullish herd. For as convincing as the rally might seem, it could easily fail above 25,000 due to the bountiful supply that accumulated between 25,500 and 26,000 last year in the February to July period. Mr. Market's M.O. Allow for the additional possibility that the bear rally could fail at any time -- i.e., now -- and the risk could be particularly high if the broad averages end Friday strongly on the upswing. The Dow looked unstoppable at Thursday's close; if the binge were to continue for another day, it would leave bulls feeling giddy and bears nauseated. What a beautiful trap that would set! It would perfectly fit Mr. Market's M.O., which unfailingly makes important tops all but unshortable. To heighten the deception, Mr. Market would avoid ending Friday with stocks at their highs; otherwise, it would be tempting for bears to short into what they'd perceive as an unsustainable burst of exuberance. A measured correction off the peak of a powerful rally would leave them less eager to challenge the mood of the day. Conversely, the appearance of sustainability and moderation would fool bulls and bears alike into expecting Monday to

Although Rick's Picks was itching to short into strength as Wednesday began, we stepped aside when buyers came on stronger than expected. Their bravado didn't last long, however, and by day's end bulls looked spent. Even so, the intraday highs easily exceeded some short-term rally targets (see chart inset), implying that a moderate pullback from these levels should be regarded as a buying opportunity. In the weeks and months ahead, we'll need to get used to this kind of herky-jerky price action, which reflects distribution in a bear market. This is a delicate operation, and the smart guys who carry it out must take great care to avoid giving bears even a faint whiff of weakness. This was not a problem when the short squeeze commenced on December 26 with the subtlety of a trebuchet hurling a Chevy Suburban into the sky. Bears dove for cover and have spent the last three weeks cowering. Making Big Mammals Disappear But they’ve grown less intimidated as the rally’s trajectory has flattened, and this is going to pose a problem for those charged with levitating a stock market that may have seen its best days for a long while. They'll have to make it past Q4 earnings reports -- no small feat if the companies fail to deliver. Even so, you should never count DaBoyz out, since these sleazeballs are very good at what they do. Like a great magician, they can make an elephant -- or a bear -- seem to vanish in front of our eyes, even when we know it's just a trick.

The broad averages wafted higher Tuesday after being stuck in a holding pattern for more than a week. Although the ascent was gentle for most stocks, the hard-hit FAANGs caught fire, with NFLX leading the pack on a nearly 7% gain. The company announced an 18% rate increase in its most popular plan, which will now cost $13 a month instead of $11. Wall Street loves a company that can make a price increase stick in these very competitive times, and it will allow Netflix to step up the bidding war for A-list talent and content.  While NFLX was streaking higher, the shares of Disney were falling by almost 2%. The company will have to match Netflix dollar-for-dollar to stay competitive, but it won't be easy, since Netflix' pay scale is outrageous. For example, they paid comedian Chris Rock a reported $40 million for two one-hour specials. Nice work if you can get it. But will such extravagant outlays pay off in revenues? The jury is still out, but the suspicion grows that the bidding war has grown too costly to sustain.

Five straight days of asphyxiating tedium on Wall Street have sapped my enthusiasm for telling you that the stock market is about to behave in some bullish way that is worthy of a headline. However, my latest update for AMZN (a key market bellwether; see below) implies that if DaBoyz cannot levitate the stock within the next day or two, they'll have to take it down by a hundred points to a level where it can be supported with less effort. To reiterate a point I've made here many times before, short-covering is the only source of significant buying power during distribution phases of bear markets (and yes, that we are in a major bear market is what I am asserting here). But it takes ostensibly bullish 'news' to trigger short-covering, and the possible sources of such news have dimmed more than a little over the last several months. Under the circumstances, the burden of proof has shifted to bulls. That is why I have cynically put the word 'news' in quotes: because so much of what we read, especially in the financial pages during bear markets, must be taken with a grain of salt. Too Little, Too Late In that regard, we are all anxiously awaiting the momentous and still likely announcement of some kind of deal with China. The longer it is delayed, however -- and that's assuming it happens at all -- the greater the possibility that it will land with a thud. No one really expects a true breakthrough on trade, only a dialing back of tariffs and a nominal agreement to play fair that would have little immediate impact on international cash flows. Moreover, any positive effect it might have could prove to be too little too late, especially with the economies of China and

I haven't looked at 'doc' copper in a while, but a bullish note posted by Seees37 in the Saloon made me curious about the long-term chart. It is indeed bullish and has been so since 2016, mainly because of the robust impulse legs that have been occurring regularly since. Every major upthrust has exceeded a significant prior peak, and that is usually a good indication that the trend will continue. There have been some minor, bearish impulse legs along the way, but none as strong as the bullish ones. If copper prices are in fact headed higher, that would imply the economies of China and Germany are about to get second wind and that recession talk in the U.S. is premature. This is far from a given, however, since it wouldn't take much weakness to diminish the bullish look of the weekly chart shown. A dip beneath 2017's lows near $2.45/pound would suffice. That would also crystallize the bearish head-and-shoulders pattern that has traced out since late 2016. I usually don't pay much attention to these formations because they are everywhere one wants to see them.  In this case, however, the pattern is such a textbook beauty that we ought not ignore it. For an illuminating discussion of head-and-shoulder patterns, visit the Coffee House and Saloon, where some subscribers have weighed in most insightfully Sunday morning on the topic. _______ UPDATE (Jan 28, 4:28 p.m. ET): The recent thrust pushed above three prior peaks (click here for chart), suggesting that any weakness will be corrective, prelude to another bull leg.

It felt like a mountain of supply sitting on stocks last week, growing more ponderous by the day. By Thursday the broad averages were too fatigued to achieve even minor 'Hidden Pivot' rally targets, the still-feisty FAANGs too subdued to help. Of course, just because the market looked punk on a given day does not preclude the possibility that, come the next, traders will conveniently forget what was troubling them. Unfortunately for bulls, however, pulling off this 'weekend alchemy' has grown increasingly difficult because of the darkening economic picture. It's not just little stuff, either -- i.e., the kind of problems that will lift in time to allow Q2 earnings expand. Take Ford Motor Company, for one. The automaker is having such a rough time in Europe that they've begun closing plants, cutting thousands of jobs and eliminating low-profit car models. A second, worrisome story played prominently in Friday's Wall Street Journal reported Apple's slowing sales in web-based services. This matters a great deal because it is a multi-trillion dollar business. AMZN is by far the dominant player, but even the also-rans -- big companies like Microsoft, Google and IBM -- have been counting on robust growth in the cloud to bolster revenues as margins on physical products continue to decline. Apple was hurting to begin with because of disappointing iPhone sales in China. But falling demand for internet services could conceivably be the blow that pushes the Cupertino firm's stock below $100. Such a fate was all but unthinkable when shares of Apple were hitting records above $230 in October, but it is very thinkable now. Deathly Boredom in 2019? If we assume that every uptick in shares is being used by the Masters of the Universe to distribute them, a day of reckoning  is not far off. Until

I put out a commentary Sunday night bearing this tongue-in-cheek headline: "No Chance This Rally Is the Real Deal, Right?"  Of course, merely to pose the question is to suggest that it is at least possible the bull market still breathes.  Look, I'm as skeptical as you are, a died-in-the-wool permabear who thinks the Dow will ultimately trade below 10,000. And I see the same ugly, seemingly unstoppable developments that you see:  The housing and auto sectors are imploding, U.S. retailers' holiday season is starting to look like a last hurrah (and a weak one at that); and the economies of Germany and China are entering a possible death spiral. It doesn't help that companies that threw countless billions at share buybacks since stocks began falling in October lost their shirts. Toss in the growing political and economic uncertainties of a nation slipping into a so-far-bloodless civil war, and you might think that anyone buying stocks right now (other than short-covering bears) is crazy, stupid or both. And yet, when we assert that new record highs are not possible, we must be prepared to eat crow if we are wrong. It wouldn't be the first time. Nor would it require much buying power to accomplish this, even if some believe otherwise.  Here's a skeptic in the Rick's Picks trading room Thursday:  "Short of a new [round of quantitative easing], there simply isn't enough money out there to lift the markets to new highs. Remember, markets fall under their own weight but need to be bought to go up. As Jim Dines used to say, 'When stocks fall (without trading), money goes to money heaven'. The collective capital loss so far is several trillion, with FAANG stocks losing a cool trillion on their own." Don't Bet Against It In fact, it

Could AMZN goad the broad averages toward new record highs without any help from AAPL? We may find out soon whether such manipulative 'triage' is possible if the stock pushes past the trendline shown in the chart. It comes in around 1730 and could be hit by week's end if buyers maintain the steep trajectory that has obtained since Dec 24. The stock has risen nearly 30% since then and seems capable of wilding sprees even when the shares of Apple, long our number one bellwether, look like hell. There are two important peaks below the trendline, and a rally exceeding them would be setting up a more likely assault on it.  You can be certain in any case that the Masters of the Universe are planning to short-squeeze AMZN for all it's worth. As we've seen in the past, it doesn't take much leadership to keep the broad averages buoyant -- only a FAANG stock with a mind to ignore or forget bad news. Such forgetfulness could conceivably help rejuvenate the shares of Apple and Facebook, which have gotten nothing but bad press over the last several months. Whatever happens, we should put aside doubts that stocks are capable of shrugging off an incipient recession and doing something really nutty. At the same time, we should remember that any bear rally worthy of the name is going to do whatever it takes to convince us it's capable of achieving new all-time highs.