The Morning Line

Interesting times, for sure, but apparently not quite interesting enough to dampen the ardor of wildly exuberant buyers on Wall Street.  With patriots storming the doors of the Capitol and a reported shooting inside the building, the Dow Industrials still managed to finish the day with an immoderate gain of 438 points. Do the institutional chimpanzees who were doing most of the buying know something we don't? More likely is that, because they get their news from MSNBC and the networks, they were ignorant of certain developments that could profoundly unsettle America. Read all three parts of this remarkable exposé  to understand just how serious the crisis could become. If you've been puzzled by Vice President Pence's bizarre willingness to certify an election that he surely knows employed massive fraud to turn him and his boss out of office, the linked story provides a compelling motive. In the meantime, don't expect the patriots to go home any time soon. They blocked the certification of electoral results as intended, and they can probably do it again as long as they remain peacefully within the bounds of the First Amendment. Not surprisingly, the extent of the violence is being exaggerated to a brazen extreme by a news media that saw the torching of Portland as 'mostly peaceful'. For his part, Trump was so forthright in telling them all to go home that the news media will have difficulty convincing even the most ignorant viewers that he incited violence.  If you want to better understand what is going on and what is about to unfold, listen to the news with a skeptical ear. They have been wrong about everything so far, and they will be just as wrong underestimating the extent to which the world-shaking events of the next few weeks were planned

To all of my subscribers and readers, warm holiday greeting and best wishes for a happy, healthy and prosperous new year.  It begins with many troubling issues unresolved, most particularly the question of who will be the next U.S. president. Various vaccines promise to ease the pandemic, but possibly not in time to prevent many small businesses from failing.  A bright spot, particularly in states like California, New York and Michigan,  where dictatorial governors have disregarded individual rights, is that business owners are at the point of revolt. This bodes well for America, since our political leaders are obviously in need of rebuke and a reminder of whom they would serve.

The broad averages have been lapping at some long-term rally targets this week, although not so voraciously that bears should dive for cover quite yet. A 304.07 target for DIA has been exceeded so far by 1.63 points; a 312.29 target in QQQ by 2.35 points; and 12,829 target in the E-Mini Nasdaq by 89 points, or  0.6%. These Hidden Pivot resistance points have already served us well, keeping us comfortably on the right side of powerful uptrends that flouted the pandemic's fatal effect on a wide swath of the U.S. economy. Small businesses are failing by the thousands each day, creating structural unemployment problems that will be with us even if there are ten more stimulus packages yet to come. Wall Street seems not to care, as long as a handful of mega-cap companies that earn their money mainly from advertising continue to grow in value. They have been inflating 'wealth' by tens of billions of dollars each day, dulling whatever lessons investors may have learned from the last bear market. Please note that the Dow Industrials are poised to rally a further 2300 points, to at least 32,692, if the new year begins with a bang. It's hard to imagine what could stop it.

With the post-Christmas resumption of trading Sunday morning, bitcoin tacked on an insane $3,000 in the blink of an eye. Even more preposterous is that a correction one might have expected to last for at least three to five days appears to have run its course in mere hours. This has raised the prospect of cryptomoney fever achieving yet another record high before dawn. How much farther could the rampage go?  A projection using the Hidden Pivot Method suggests that the next big thrust will hit 33,600, about 6000 points, or 22%, above these levels. But why should it stop there, we might ask, with mass hysteria's Olympus beckoning at 100,000? We'll be better able to assess whether bulls have the gumption to get there once we've seen how they handle the 'hidden' resistance at 33,600. If this proprietary pivot is dramatically impaled on first contact, be prepared for a burst to 50,000, a marquee-quality number that would be in play simply because I will have run out of Hidden Pivot targets. Support from Billionaires Disclaimer:  I think bitcoin is, if not a hoax, then a cleverly marketed scheme on the order of alchemy and cold fusion. I get emails all the time from bitcoiners convinced cryptocurrency should be prized over all other investable assets, particularly gold. The most fervent believers are robinhoodies and millennials with little experience of precious metals, other than as jewelry that old people wear. At gold's expense, they have helped push bitcoin into its second speculative mania, the first having ended woefully in 2018. The collapse that year took it from an all-time high of 19707 down to 3134. The current short-squeeze supernova has much more power behind it, however -- not only from speculative excesses fueled by buyers too young to know about or