The Morning Line

In these way-too-interesting times, there aren't many publications that would trumpet a New Year's Eve headline like the one above. It topped the front page of the South Florida Sun Sentinel, however, a tribute to the Sunshine State's winning performance on the playing field. Two college basketball teams, University of Miami and Florida American University, made it to the NCAA Final Four, while the Panthers and the Miami Heat did much better than expected in, respectively, professional hockey and professional basketball. Many investors, too, will be hoping for a repeat of 2023. The S&Ps tacked on nearly 1,000 points since the start of the year, and that is bound to have raised their expectations for more of the same in 2024. My own forecast suggests they may be in for disappointment. Although I see the broad averages going at least somewhat higher, a moonshot looks doubtful. That's because shares of Microsoft, currently trading for around $375, look incapable of exceeding a granite 'Hidden Pivot' ceiling at $430 without experiencing a major correction or a bear market first. MSFT has taken AAPL's place as my #1 stock-market bellwether because iPhone sales will be extremely vulnerable in a recession, even as subscription revenues for Microsoft Windows/Outlook continue to roll in no matter what happens to the global economy. MSFT is therefore the single most important stock in the world, and when its long roll of the dice sevens out, that will signal the end of the stock market's near-vertical climb. Bullion Gathering Strength If there is great news coming for investors, look for it to happen in the bullion sector. Silver and gold have spent more than three years consolidating for a push that will turn $2000 into bedrock support for the latter. The move has been such a long time in

[The following was written by my good friend James Trabulse.  A devout Catholic, Jim regularly attends a Latin mass. He is also a gifted trader who brings rigorous science and outside-the-box thinking to nearly everything he does, including playing golf, staying healthy, cooking savory, nutritious meals and training Olympic-caliber athletes. RA ] Merry Christmas, and may the Lord's blessings be on your house. When we first said 'Merry Christmas!' in A.D. Zero, the baby slumbered in an animal-feeder in Bethlehem, 90 miles south of Nazareth -- hardly a pleasant affair, with no one there save Mary and Joseph. As we sing in the Roman Rite at the Intrit: Puer natus est pro nobis, is this the fulfillment of Isiah when he prophesied: For a child has been born to us, a son given to us, and the authority is upon his shoulder, and the wondrous adviser, the mighty God, the everlasting Father, called his name, 'the prince of peace.'  We said 'Merry Christmas!', to the derision of the Romans for 254 years. They outlawed us, put us in with hungry lions in the great Colosseum, along with a cheering crowd and Caesar’s thumbs turned down. Taming the Visigoths And when we said 'Merry Christmas!' to bring the good news to the Goths and Visigoths, they burned us and ran us through. Five-hundred years later, they were saying 'Merry Christmas!' in German, one of their own being Saint Nicolas! And 'Merry Christmas!' in Tunis and Algiers was met with the Star and Crescent and beheadings; but we said 'Merry Christmas! The Child of eternal hope is here!' And then, 'Merry Christmas!' in Ye Olde England under the Puritans was met with hangings, exile and nothing merry at all; but we continued the greeting long after Elizabeth and Cromwell were dead and

Most of us had been expecting gold to explode through the $2000 "barrier" and soar into the wild blue yonder. Instead, it spasmed to $2152 for a nanosecond on December 4, then crashed back down below $2000 like an anvil dropped into an elevator shaft. What happened? Gold is most certainly in a bull market, even if the ascent has been tortuous. One might think bull-market psychology would limit the extent to which bullion's price can be manipulated, especially lower. And it has, evidently, judging from the way the last takedown attempt reversed without even getting close to a prior low at 1955. This is despite the fact that gold's price is controlled by white-collar criminals who act with the blessings and complicity of regulators and their evil masters in the upper echelons of banking. We suggest that you Google our old friend Andy Maguire if you want to understand exactly how these slimeballs from Wharton, Sloan and Stanford operate. Their mothers actually believe they are respectable businessmen. Use the Trendline So when might we expect gold to get off the launching pad with enough firepower to turn the bad guys' pelotas into roasted chestnuts? It is logical to think this will happen when gold has finished consolidating at the $2000 level. However, because it has spent the last year making a muddle of this idea, I'll suggest using the trendline in the chart above to determine when COMEX futures have broken out for a run-up to at least $2500.  That implies a consolidation above $2100 rather than at the ponderously symbolic $2000. A second, decisive poke above $2100 this month or next would hasten the process, especially if the futures can settle above the trendline for two or more consecutive weeks. Bulls can afford to be patient, since anyone

[This essay originally appeared here in July 2022 and was written by a friend who spends a lot of time thinking outside the box. His provocative thesis is that that there is a physiological basis for our political differences; moreover, he notes, liberals cancel and ghost their conservative friends for reasons that are tied to their deepest fears about survival as a species. How else to explain why they become so outraged over seemingly little things that they would end a long friendship over them? It happened to me most recently when a Boulder woman I'd known for years visited Florida. We took some long walks on the beach, had a few great dinner conversations and generally enjoyed each other's company. After she returned to Colorado, I asked her in an email whether her news sources, including CNN and MSNBC, ever showed videos of Biden stumbling through a speech or falling off a podium. She insisted that such videos had been doctored by the Republicans; then, a few days later, this otherwise courtly woman admonished me in an email with some informational links to"Read this, you fucking moron!" So much for the strong mutual respect that had always obtained between us over the years. Yet another close friendship had bitten the dust. Please circulate this to anyone who might find it interesting, especially liberal friends who have stopped taking your calls . At the author’s request, I have not identified him. RA ] *** Many of us have noticed that our liberal friends are more likely to 'ghost' us than the other way around. Typically, they terminate our friendships in ways that are meant to be final. Their way of doing so ranges from slipping away to kissing us off with a righteous display of indignation and disgust. Here is

They don't ring a bell at the top, as the saying goes, but it's hard to see how Mr. Market can avoid it this time. The stock market's heedless, nutty short squeeze since October will end when Microsoft hits $430, probably early in the new year. It's that simple.  How do I know this? Just a gut feeling. I've been paying close attention to charts for more than 40 years, and the one above looks like it can't miss. It tells us two things with clarity and authority: MSFT will continue to rise until it reaches $430, a Hidden Pivot resistance; and, it will not surpass that number, at least not by much, without a major correction. Furthermore, because Microsoft shares, which are trading in record territory, have surpassed a laggard Apple's as the #1 favorite of portfolio managers, the former cannot but serve as a reliable proxy for institutional mindset. My high confidence that MSFT will reach 430 is rooted in the way buyers handled resistance at two crucial 'Hidden Pivot' levels: 1) at the red line, a 'midpoint resistance' at 322.01; and 2) at the pink line, a 'secondary resistance' at 376.29. Not only was the first level easily penetrated on first contact, it also became support thereafter, adding to the likelihood of a further move to 430.58. As for the secondary pivot, although it has yet to be decisively exceeded, the fact that it was exceeded at all strongly suggests the uptrend will continue.  Also, the ABCD pattern is sufficiently clear and compelling that we can infer D=430.58 will show precise stopping power. Ankles Grabbed Mr. Market undoubtedly would love to rebuke (i.e., sodomize)  me for being so confident. As the headline implies, though, I've willingly grabbed my ankles so that he can try. The pattern is

AI hubris has become America's chief source of good news. Over the past year, artificial intelligence surpassed bitcoin as mankind's most easily imaginable pathway to quick riches, shortened work weeks, ingenious solutions to every problem, and endless satisfactions. An AI-assisted world supposedly will revolutionize the way we do business, enabling high school graduates, even mediocre ones, to do the grunt work of Wharton MBAs. It will make government workers heroically efficient, fine print more readable and Shakespeare more accessible to the masses. AI will allow paralegals to leverage the law library as effectively as Ivy-educated Supreme Court clerks, homemakers to serve four-star dinners and to provision every lunch pail with perfect nutrition. It will end war, thwart alien invasions and allow pet owners to talk intelligently with their dogs, cats and tropical fish. Graduates of AI-specialized trade schools will reduce the heavy workload on diesel mechanics, actuaries, farriers, coders, electricians, pilots and brain surgeons, pitching in wherever they can. Every savings account will achieve the maximum possible return, and fake news, filtered into oblivion, will cease to exist. No umpire will ever again blow a close call, and no murder will go unsolved. Alexa will know what we want before we even finish a command, and your little Billy will be able to replicate 'The Night Watch' on the living room wall with a tricked-out, AI paint-box. His kid brother, a budding AI tunesmith and composer of nearly hum-able show-tunes, will owe his life to AI's success at cracking the mystery of crib deaths. A Flunky's Tale What a fabulous world it will be! For the time being, however, and most unfortunately, we'll have to content ourselves with AI's most visible achievement to date: AutoCorrect.  It was developed by the same millennial geniuses who have been toiling day and night

Lacy Hunt, a gray eminence of the financial world and no doomsayer, was out with a Hoisington Report recently that should scare the pants off anyone concerned about the direction of the U.S. economy.  His meticulously detailed take on a commercial real estate debacle that has been metastasizing for more than a year should dispel any notion that Americans will be spared from deepest recession. And yet, judging from the stock market's nearly vertical rise since early October, one might infer that things are going gangbusters. Microsoft shares alone added about $587 billion to the so-called wealth effect. To put that in perspective, it would buy a Mercedes-Benz GLC for every man, woman and child in L.A., Chicago, Houston and Phoenix. If you were to spread the lucre more charitably, it would house every homeless person in America -- luxuriously and for a long time. With an estimated 582,000 street people on the receiving end, each would have a tad more than a million dollars to spend. And it's not as though MSFT is the only high-flier caught up in the market's ballistic rise. The shares of Amazon, Google, Meta, Apple and some others in the trillionaire club rose almost as steeply, adding enough play-dough to the wealth effect to make ALL of us rich -- or at least rich enough in theory that no self-respecting American should ever again have to fly on Spirit Air. Stuffed Camel Entrée So where are the customers' yachts? Unfortunately, precious little of the wealth-effect 'money' will ever trickle down to Levittown, much less to the nation's ramshackle tent cities. Even the rich will hoard most of it once they've covered their essentials -- i.e., chartering floating mansions for summer cruises on the Mediterranean, and throwing garden parties with stuffed camel as the main

U.S. shares continued to climb a wall of well-justified worry last week, propelled with sufficient vigor to suggest new all-time highs are likely.  Notice how Microsoft's push into record territory on Friday occurred after the stock had spent nearly six months consolidating at the red line. This is a 'midpoint Hidden Pivot', according to our proprietary method of analysis, and MSFT's decisive move above it has freed the stock from its gravitational pull. This is significant, because as long as Microsoft shares are moving higher, the broad average will follow in their vortex. This is no longer true of AAPL, which until recently was our most important global bellwether for stocks. Although it is still the most valuable company traded on any exchange, sales growth for the near-to-intermediate term is no longer assured. That's because iPhone sales have encountered strong headwinds in China and are certain to falter in the U.S. when -- not if -- the economy enters a recession. One has already begun for many Americans, most recently the 10% of Citicorp's workforce about to be laid off, as well as tens of thousands of workers scheduled for termination at 3M, Tyson Foods, Lyft and Whole Foods. Even Walmart is laying off 2,000 warehouse workers across several states. Rock-Solid Revenues Microsoft will not be inured to the effects of a slowdown, but selling Windows and Outlook software on a subscription basis that requires annual renewals will continue to help insulate the company from economic downturns, even if severe. For that reason, Microsoft should be regarded as the bluest of blue-chip companies, a profit engine even more powerful and reliable than Apple.  The chart shows a bull-market target for MSFT at 430.58 that implies a 16.5% leap from the current 369.97. In comparison, to achieve new record highs the

[A change of tone and tempo this week from our good friend Richard Charles, owner of Lake Tahoe-based Alpine Capital. His observations concerning gold's historical role during periods of intense global strife should remind us that bullion's sometimes crazy price swings should not be investors' focus right now.  RA ]  With plans to attend memorial service for a dear teacher friend of 92, as Rick asked for a modest commentary, thoughts turned to finite things. JFK’s poet laureate Robert Frost wrote: Nature's first green is gold, Her hardest hue to hold. Her early leaf's a flower; But only so an hour. Then leaf subsides to leaf. So Eden sank to grief, So dawn goes down to day. Nothing gold can stay. In 92 years, Vera survived the Great Depression, The Great Inflations and World Wars. She saw a few years of peace dividend in a country with more riots than years of her lifetime. At this time we face a market test in our lives and history. Wednesday, waiting for the latest Fed decision on interest rates, we saw a record low Put to Call Volume Ratio of 3%. We consulted several sources to make sure it was not an artifact. Our experience is when people give up buying or selling puts for income, protection or speculation, TTOBGH, -- that’s the old ball game, honey. What to do ? Always, the question of survival and thrival -- or at least less loss. When I was a young Merrill Lyncher, we had a customer gallery on our trading floor. I was always interested in what the well-dressed old guys had to say. In 1980 gold briefly breached $1000 as Hong Kong produced $1000 gold coins to commemorate the Year of Elizabeth II and Lunar Monkey Year. I asked the eldest market