Rick’s Picks

Bulls and bears appear to be equally enfeebled and lacking in conviction. How else to explain why the futures spent the entire week screwing the pooch near the 1296.80 Hidden Pivot support of the pattern shown? It has been violated sufficiently to tip the odds in favor of a fall to the 1262.70 target, or at least to p2=1279.70. But we won't presume to know how things will turn out until one side or the other makes a decisive move. For now, we'll regard the stalemate as the Battle of the Dwarves. _______ UPDATE (Apr 8, 5:16 p.m.): A rally to the green line (click here for chart) would trigger a 'mechanical' short. I am not recommending the trade, however, unless you can initiate it using a 'camouflage' set-up that would cut the initial risk of $2700 per contract down to $80 or less theoretical.  My skittishness is out of deference to the fact that gold has been playing nasty little games with bulls and bears alike, screwing with their heads at every peak and trough.  In this case, the set-up for the mechanical short is so pretty that it tips me bullish, with mild expectations of a thrust exceeding the 1330.80 peak made on 3/25.

TSLA got sacked last week on news that Model 3 deliveries fell far short of expectations. Incredibly, the stock's 12% plunge did not negate a 'counterintuitive' buy signal tripped a week ago on the hourly chart at 286.19. It's tied to a minimum upside projection of 317.91 and a maximum of 381.36. I expect these upside targets to be negated when TSLA falls beneath 254.46. However, that wouldn't necessarily portend disaster, since a Hidden Pivot support at 242.44 is there to provide at least a temporary backstop. The stock has been swinging violently within a huge range for two years, and this seems likely to continue -- with a long-term bullish bias, unless the company goes bankrupt. The fact the TSLA hasn't crashed is testimony to Musk's entrepreneurship and charisma. The regulators may not like the guy, but in the business world even when he makes big mistakes he is a man to be reckoned with._______ UPDATE (Apr 11, 11:30 p.m.): The stock feels heavy. If it falls and a midpoint pivot at 264.71 gives way, that would be telegraphing more downside most immediately to as low as 248.25. ________ UPDATE (Apr 15, 10:16  p.m.): No change in the downside targets given above, but today's swoon has made a further rally to X=272.93 a 'mechanical' short, stop 281.17.  _______ UPDATE (Apr 16, 6:24 p.m.): The short triggered.  If you did the trade, please let me know in the chat room so that I can establish a tracking position if warranted. In any event, half should be covered on a fall to 264.71.

I've been writing on deflation since the early 1990s, when I had the topic all to myself and was regarded as a voice on the lunatic fringe. Scary essays that I freelanced to Barron's, the San Francisco Examiner and a number of other publications turned out to have been premature, but I've never doubted that the endgame for a global economy glutted by debt would be a deflationary collapse. Skeptics say the Government will make this impossible by simply revving up the printing presses, creating enough money to bail out 'the system' regardless of how many dollars it takes. Oh really? How would this work if, as is extremely likely, a state pension system goes bust? Realize that 28 states have been growing their liabilities twice as fast as their economies, and that in the states that lead the pack -- i.e., New Jersey, Illinois, Connecticut, New Hampshire and Kentucky  -- accrued debts have been growing three to four times as fast as their economies. How long can that continue?  My guess is that Illinois, with a fiscally reckless Chicago to help bring it down, will be the first state to go belly-up.  Were the Federal government to come to the rescue, actual 'helicopter money' would be needed, since checks would have to go out every month to retirees so that they could meet recurring expenses. The 'Catch 22' of a Bailout Two dozen other states would be close behind, seeking the same treatment. If they got it, that would be tantamount to hyperinflation. Before you assume that such a thing is even remotely possible, substitute the word 'taxpayer' for  'Federal government,' because that is who would pay for a bailout.  That's right: All of us working stiffs would presumably be on the hook...forever, forking over a big piece of

The most interesting trait on display in securities markets these days is what might be called the artful levitation. Apple shares, for one, have been strongly on the rise even though iPhone sales are weakening, particularly in China, the company's second-biggest market. A further discouragement is Apple's bland strategy for the future, competing against streaming-content giants already well established in a business where profit margins fall well short of iPhone's. And there is Facebook, which has become a pariah in the eyes of all who value privacy. Incredibly, its shares continue to move higher despite the rising tide of censure.  As for Tesla, a company that could conceivably face bankruptcy, its shares have risen 15% in just the last two weeks. But of all the markets being magically levitated, crude oil is the most impressive. Spot futures have rallied almost 50% since December, from $43 to $63, even as the economies of China and Europe have weakened dramatically. Chalk it up to Russia's guiding influence on OPEC.  The cartel's Arab producers had long been unable to stick to quotas until Russia came along to enforce them with a firm hand. Putin continues to demonstrate that he is the most capable tactician in the geopolitical world. We eagerly await Trump's response to the Russian's deployment of 100 troops to Venezuela.  This is not mere mischief, and unless the U.S. confronts him firmly, Venezuela could turn into another Cuba. Dealing with Russia's now militarized support of Maduro, the dictator from hell, could prove to be the most serious challenge Trump has faced as president. It will be interesting to see how ferociously those afflicted with Trump Derangement Syndrome resist getting behind him. In so doing, they will only deepen the rift between the Democratic Party and America's mainstream.

The Wall Street artistes who have helped propel Facebook shares steeply higher despite an onslaught of negative news were temporarily stymied Wednesday when a damaging story broke around noon. Just when investors were starting to forget why Facebook was in danger of becoming a pariah for abusing users' privacy, out pops this headline: Millions of Facebook Records Found on Amazon Cloud Servers.  How bad is it?  "In one instance," reported Bloomberg, "Mexico City-based digital platform Cultura Colectiva openly stored 540 million records on Facebook users, including identification numbers, comments, reactions and account names. The records were accessible and downloadable for anyone who could find them online." A nearby headline framed the coming response from D.C. legislators: Facebook Crackdown Options Abound as Washington Weighs Next Move. I'd warned here recently that Facebook's virtual empire could implode overnight if users' tastes suddenly change and they abandon the social-media platform en masse. Even the rabid weasels who drive the company's shares wildly up and down for fun and profit must be sensing by now that Facebook is no longer cool (think AOL) and that the company has seriously depleted its store of good will. A sharp, downward adjustment in the stock seems likely, and they will do everything they can in the meantime to distribute their holdings to the rubes. However, there is a lot of ruin in an empire, as the saying goes, and so we shouldn't expect the stock to sink toward oblivion without a fight. Indeed, DaBoyz deftly put it in a holding pattern at 30,000 feet for two months while they waited for the most recent spate of bad news to blow over. Shameless Puffery FB appeared headed to the moon on Wednesday, but the news concerning this latest privacy breach quickly knocked it down by $5, about 3.25%. Ironically,

Bitcoin's sharp rally on Tuesday was being described by some as a 'mystery surge', but it is no mystery at all for anyone who has seen the film Night of the Living Dead. Buffs may recall that the movie's flesh-eating zombies were activated by radioactive contamination from an exploding space probe that had visited Venus. Although no similar explosion has been reported by NASA, it seems entirely logical that some sort of cosmic contaminant affected the brains of traders, causing them to pay $900 more for Bitcoin than anyone had been willing to pay the day before. On a chart (click on inset), the cryptocurrency looks like it sat on a Whoopee Cushion. Cosmic rays aside, another plausible explanation is that the imbeciles who bought into the rally simply forgot about myriad factors that have been weighing on bitcoin for the last 16 months, pushing it 75% beneath the December 2017 high of around $20,000. If a score of high-profile embezzlement and theft scandals weren't enough to ward off thrill-seekers, the recent announcement that the Cboe, the first exchange to list bitcoin futures, plans to kill the contract after June should have slowed the action to a death crawl. Instead, we got enough of an effusion on Tuesday that more speculators could get sucked in over the next few days.  Some called the rally an April Fool's joke. Indeed it was, no matter what its cause.

Betting that the stock market's steepening surge will continue seems like such a sure thing by now that we should probably expect the downturn-from-hell to start momentarily. Actually, the 330-point leap the Industrial Average took on Monday exceeded two important peaks recorded on Feb 25 and Nov 8, respectively, implying that any pullback of less than a thousand points would be merely corrective. Alternatively, the blue chip average is getting close enough to October 3's all-time high at 26,951 that the Indoos will start feeling its magnetic pull 200 or so points above current levels.

The timing of Lyft's IPO last week could not have been better for Wall Street insiders, since they will have an opportunity to unload their shares into a veritable orgy of greed and ignorance. The stock market looks unstoppable at the moment, and it is making Lyft's $24 billion valuation seem somehow less absurd. Just four months ago, when shares were in the throes of what many of us mistook for a bear market, the prospect of taking Lyft public must have seemed not merely unappealing to its owners but grim. The company had no earnings at a time when investors were diving into defensive stocks. How things have changed! What might have been a march to the gallows now promises to become a wilding spree as investors clamor for profitless unicorns. Who needs earnings in a bull market that will continue forever? In this heady climate, there is unlikely to be any serious discussion about why Lyft could prove to be such a bad bet. Naysayers have questioned whether the ride-hailing service can earn money. But their arguments have focused mainly on whether Lyft's far larger competitor, Uber, would doom the firm's chances for success in a market where Uber itself has been unable to turn a profit or even to figure out how. Regardless, it's safe to assume the companies will continue to beat each other's brains in even as the 'creative destruction' they leave in their wake lays waste to the world's taxi fleets and perhaps even the automobile industry. The REAL Competition But there is yet another competitor as yet unrecognized by investors. I am referring to Tom, Dick and Harry, you and I, our neighbors and colleagues; for any one of us could create a ride-hailing service practically overnight using do-it-yourself software that does everything Lyft's

As much as I've distrusted the stock market's presumptive bear rally every inch of the way, the charts of two bellwethers, AAPL and AMZN, look too bullish at the moment to assume the sky is about to fall. AAPL in particular has been unstoppable and looks like it could hit a $212 target 12% above current levels. I am wary of getting sucked into a bear rally whose sole purpose is to suck in skeptics like me.  But the bullish case must be respected, especially since, as we know, the stock market's strength these days has no connection to a global economy that has weakened dramatically in recent months. Perceptions are everything, and the universal perception at the moment is that global easing is about to be stoked like crazy.