The Morning Line

Only on Wall Street is fake news celebrated with such shameless hubris as we've seen lately. In the last few weeks, flouting a torrent of lousy earnings reports, investors have gorged themselves on stocks.  This resurgence, doomed by recession and a grim outlook for earnings, was strongly supported by fake, or at least meaningless, employment data showing strong payroll growth. Never mind that most of the newly re-employed were waitresses, shoe store clerks and cruise-ship saxophonists who got laid off during the pandemic. Now they'll be able to pay the rent again with their own money rather than with taxpayer handouts -- a modest gain that economists, Biden and his remaining few stalwarts would herald as evidence of boom times. Let's not dwell in the meantime on the fact that high-paying tech jobs have been shrinking at a disturbing rate -- by 32,000 in just the last month. None of this was even faintly on Biden's mind, such as it is, when he served up a State of the Union address last week telling us why it is once again Morning in America. In reality, U.S. data alleging 3% GDP growth in the last two quarters conflicts sharply with widespread perceptions that the economy remains mired in a recession begun early last year. The eggheads are so deeply in denial about this that they have returned to laughable speculation about whether America can 'avoid' recession. Signs of Decline But no matter how many jobs are added, and however inflated the stock market and real estate become, the things that determine our standard of living will continue to erode or disappear, just as they've been doing since the 1970s. Who doubts, for one, that the day is coming when the last department store closes its doors, leaving us to do most

Treat the stock market as you would a sleazy carnival game and you hold the key to accurately predicting its behavior. Take AAPL, for instance. We should have known that permabears were being set up for a fleecing when an always-complicit news media worked slavishly to stoke anticipation of horrendous Q4 earnings. Apple certainly didn't disappoint in that regard when the company on Thursday reported its first year-over-year sales decline since 2019. Such announcements are usually made after the close, enabling the thieves who manipulate stock prices for a living to work their magic. As they have done countless times in the past, they pulled their bids in after-hours trading following Apple's grim announcement. This induced widows and pensioners to vomit Apple shares at distress prices five percent below where they'd traded on the close. QE Mythology With sellers utterly spent, DaBoyz were easily able to short-squeeze the stock back up to the intraday high within hours. The rigged ups and downs that made this ruse work are shown in this chart. From that point forward, their clown-dunking antics were on autopilot. As the stock relapsed in the wee hours, they covered shorts laid out at Thursday evening's secondary peak. Sellers didn't realize how badly they'd been had until around 5 a.m., when AAPL finished basing on near-zero volume and launched into an 8% rally, from 145 to 157, before the regular session began. QE mythology aside, this is how the Fed effectively injects large sums of instantly spendable money into the economy. With credit stimulus there will always be a lag between falling interest rates and their intended effect on consumer spending. But gift investors/consumers with an 8% rally in the world's biggest-cap stock on a Friday afternoon and you have spiked the wealth effect with methamphetamine. By the

[This week's commentary was written by David Isham, a real estate investor from Northern California who has subscribed to Rick's Picks since its inception more than 20 years ago. RA ] With the ongoing financial turmoil and the potential start of another world war, gold is behaving as we would expect, showing exceptional strength. Although we are nowhere near the top as open interest is still low, we still must be on the lookout for a short-term top. The gold bull has traditionally carried as few riders higher as possible, and I suspect this time will not be any different. Rick has identified targets above $2,000, and there are two peaks at $2078 where there will be plenty of buy stops for the algos to run and establish short positions. If they do run the buy-stops, they would then look to attack sell-stops under $1,600 so that they could cover profitably and get long again. A long-term Fibonacci fan (aka 'speed resistance lines') with a red 2/3 line has acted as both resistance and support since this bull market started in 2001 and would be a likely target on the downside. Such a dramatic move would also set up a slingshot move to the upside. If we do get one more, dramatic move down I would also expect gold stocks to hold up well relative to physical. My strategy is to accumulate gold and silver mining stocks and not try to time buying and selling my core positions, since I could get left behind if I am wrong about a big drop. However, any large move down would be an opportunity to add to my positions. A Golden Slingshot Martin Armstrong does not think the US dollar will last beyond 2028. It has the distinction of being the only currency

The chart is meant to put Friday's giddy short-squeeze in perspective. If you are a bull and feeling a little discouraged by what you see, that is what I had intended. What better time to rack bears than in the final hours of a week that was more comic relief than hard news? Biden's docugate was outed entertainingly by Tucker Carlson as a not particularly sinister plot by 'Permanent Washington' to make certain that the thieving, senile old coot doesn't run again. It also has the beauty of allowing many Democrats and even a few Republicans to evade discussion of far more serious crimes that would implicate them all in shadier misdeeds than misplacing classified documents. In this temporary climate of political unseriousness, the S&P 500 was aggressively stoked to Mau-Mau bears, lest they become cocksure about the extremely dim prospect of new all-time highs with recession-or-worse stalking the U.S. and global economies. Eggheads in Denial Incredibly, the eggheads, including a few Nobelists, remain in denial that a U.S. recession has even begun. The stock market is not so stupid and may even have begun to recognize that lower inflation could be leading to an economically fatal debt deflation.  How else to explain the headless-chicken feints in both directions on news that prices for some things are coming down, if much more slowly than they rose?  Like the keister bandits who control bitcoin's price, the svengalis of Battle Creek have seized on markets numbed by chaos to jack cereal prices six ways from Sunday. For instance, the 16-ounce box of Cheerios that once sold for $4.70 is now a 14-ounce box for $6.99. If you think the trend has gone far enough, be careful what you wish for, since, in the unimaginably hard times that may lie ahead, we could

The headline explains why the voracious bounders on Capitol Hill are willing to spend so much time, money and effort getting re-elected. For they are not just investment insiders, they are recidivist sponsors of legislation that directly benefits their stock portfolios. It is quite a racket, and whatever laws exist to prevent them from getting rich serving corporate lobbyists above all, those laws obviously are not working.  If you're interested in the sordid details behind their headline-worthy investment success, a website called UnusualWhales publishes an annual report filled with titillating information. "By analyzing publicly accessible financial disclosures," the Whale's authors proclaim, "we found that a quarter of Congress actively traded up to $788M in various assets through 12,700+ transactions in 2022. Although this matches the number of transactions in 2021, the total value has dropped." I was unaware of Unusual Whales' efforts to shine a light on our nation's political cockroaches until my brother, Allen, sent me a link to their site. "For me, reading the headline Congress Outperforms S&P in 2022 was all the clickbait I needed," he wrote. "While it's my habit to look for the best in people, I eagerly make an exception for all politicians. The loftier their position, the greater my skepticism. To temper my deep disdain for them, I try to remember the old adage that it's only 98% of them that give the rest a bad name. Their Favorite Plays  "Admittedly,' he continued, "the report is too long for me to read at one sitting -- think Tolstoy -- and although I don't think it will provide any revelations, it makes for fascinating reading nonetheless.  Imbibe just the opening paragraphs and you'll see how the greed of Republicans and Democrats run on somewhat different tracks.  The top sectors with the highest stock investments

[The following went out in mid-December to clients of  Doug Behnfield, a Boulder-based wealth manager and senior vice president at Morgan Stanley. The letter provides an insightful view of the economic landscape as we enter the new year. Doug foresees falling stocks, falling inflation (or possibly modest deflation) and a continuing rally in long-term Treasurys.  He is one of the most successful investors I know, and also one of the wisest. I have featured his work here many times in the past and am grateful for the opportunity to share his timely thoughts with Rick's Picks readers. I've substituted my own charts from Tradestation for the ones in the original report because they reproduce with greater clarity. Also, the irreverent picture above was my choice, not Doug's. He was assisted in preparing the report by his son Max Behnfield, a financial advisor at Morgan Stanley; and by Amelia Guidi, vice president and financial advisor in Morgan Stanley's Boulder office. RA ] As we wind down a challenging year in the financial markets, there are many events that have occurred that shaped the outcomes that are much easier to see in retrospect. At this time last year, the stock market was making its last glorious run to all-time highsjust as Jerome Powell, the chairman of the Federal Reserve, was being handed the Keys to the City in terms of controlling inflation by President Biden. Powell immediately set out to alter the course of monetary policy that had been Fed Doctrine since 1987, when Alan Greenspan took over as Fed Chairman from Paul Volcker. What has happened since has been quite dramatic. Considering the very recent, downward reversal in long-term interest rates and the accompanying rally in the bond market, now seems like an appropriate time to chronicle what has transpired over the

Be skeptical if stocks start the new year on a positive note, since that would be the perfect way for Mr Market to set the hook to trap bulls and bears alike. It would probably take most of the opening session on Tuesday for an enticing rally to build up steam, since the bears who would be doing most of the buying via short-covering will need some painful prodding before they hit the panic button. Mr Market has had an especially hard time trying to stampede them lately, since he holds such lousy cards. Recession is upon us, tightening its grip as the shares of such former world-beaters as Apple, Tesla, Google, Facebook and Amazon have collapsed. This has caused the "wealth effect" to deflate precipitously, unnerving investors who understand that the carnage will end only when a tsunami of exhaustion selling lays waste to the most resilient bulls. Not Bottomless My best-case scenario comes from AAPL's chart, which looks ugly but not bottomless. In fact, the stock need only fall a further $8 or so, to around $121, to find good support at a trendline I've been drum-rolling for months. "Get Apple right and you get the stock market right" has been Rick's Picks' mantra for nearly two years, and it has served us well. Because the stock provided a decade-long free ride for portfolio managers and has hooked them like dope, it will always tell us exactly what's on their minds. Now, despite grim headlines and dark clouds of war and recession hanging over 2023, Apple's chart says the stock market's decline may have just a little further to go before either stabilizing or rebounding. Some of my guru colleagues appear to expect strongly otherwise and have been predicting a January disaster. But don't be surprised if stocks

In an economy that over decades has grown increasingly dependent on revved-up holiday sales, investors have responded by praying more fervently each year for a Santa rally. It's an odd metaphor, however, considering that Wall Street even at its seasonal cheeriest has a heart as cold and dark as volcanic glass. The Santa of investors' imaginations is assuredly not the fat, jolly one originally drawn by a Dutch artist Haddon Sundblom for the Coca-Cola company, but rather someone more like Fed Chairman Jerome Powell gone silly in a headdress of fluffy white dove feathers. Unfortunately, Powell has not left much room for silliness in this holiday season. Gone are the days when Neiman Marcus could get a rise by featuring his-and-hers Bentleys in their Christmas catalog. The typical American household is thinking about more practical presents in these recessionary times: PG&E gift certificates...bread machines and pasta makers...survivalist seed packets...battery chargers. More Turbulence The result for investors has been a balky stock-market shaped more by Scrooge than Santa. Even with bullish seasonality at maximum force last week, the Dow Industrials could muster only a 300-point gain. They closed on Friday at 33,203, down a thousand points since Thanksgiving. More turbulence seems likely in the final days of 2022. Perhaps the best we can hope for when the markets lurch into gear on January 3 is that stocks continue to drift through a circa 1914 minefield without triggering a nuclear war or the debt deflation we all know is coming. [What do the charts say? Click here for my latest interview with Howe Street's Jim Goddard. RA]

The modest bear market rally begun in October likely ended last week when stocks turned sharply lower after failing to achieve clear 'Hidden Pivot' rally targets. Now, if the selling should continue to exceed minor abcd targets as occurred last week, that would affirm that Papa Bear is back. AAPL in particular, the world's most valuable stock, took a dive that has another 10% to go before good support is likely to materialize near $120 (see chart, above). The smart money that manipulates AAPL was finding it increasingly difficulty to distribute stocks to widows, pensioners and rubes. Making the shares affordable to the masses was their intention when they split the stock 4:1 in August 2020. AAPL was trading for around $600 at the time, priced well beyond the reach of most individual investors. How the Game Works The split allowed AAPL's canny institutional sponsors to rig the stock's price action so that AAPL could forge steeply higher without requiring large infusions of cash. This simple trick was always performed in the dead of night, when volume typically dries up. The smart guys would pull their bids, letting AAPL fall for no apparent reason. With sellers exhausted ahead of the opening bell, it was easy for the thimble-riggers to trigger off a short squeeze, gapping the stock well above the level where overnight selling had begun. It was even easier to create bullish gaps when AAPL wafted higher overnight on thin volume, since the day began with shorts already spooked out of their wits and hemorrhaging losses. Covering their positions was costly because DaBoyz backed off their offers, causing the stock to soar on light volume. Very little stock changes hands in these gaps. AAPL could be trading for, say, 147 on the close, and then open the next morning