THE MORNING LINE
The Bear Has Finally Emerged
The war with Iran has put investors in a deepening state of anxiety, since no one can say for sure how things will turn out. Wall Street’s obsessive focus has been on the price of oil, implicitly trusting that the supposed collective wisdom of markets is superior to whatever information we could glean from headlines and op-ed pages. The trouble is, the story that crude oil spins each day mutates with wild price swings that suggest the markets are as clueless as we are.
The charts I use to get a tight handle on the stock market are less confusing, however, and they are saying unequivocally that the bull market begun in 2009 is over. To state this in a disinterested, technical way, when ABCD corrections in bull markets start exceeding their ‘D’ targets, as occurred last week in the S&Ps, the major trend has changed.
The small target-overshoot in the E-Mini S&P chart above tells us more about the stock market’s health, or lack thereof, than a cacophony of pundits and eggheads ever could. It says a bear market that has always been inevitable has finally begun. This will also mark the end of Trump’s heroic run, negating his magical ability to move the markets and to persuade people that everything will turn out okay if we just give it more time.
Trump’s Miracles
It is difficult to criticize a man who has produced so many political and geopolitical miracles. Admittedly, we have never believed in the economic kind, since Americans are much too deeply in debt to escape a Second Great Depression. When it comes, it will take down a global regime that has come to depend on America’ economic strength and, more recently, its leadership.
The hope remains that Trump will put our domestic house in order before systemic failure makes the task impossible. Although he might not succeed in putting Hillary, Comey, Schiff, Brennan, Clapper, Obama, Biden and all the others in prison where they belong, by exposing their perfidy, he has dealt a mortal blow to their ceaseless efforts to subvert the nation.
Rick's Free Picks
$CLK26 – May Crude (Last:101.18)
It took the futures several days to get off the launcher following the ‘buy’ signal noted here a week ago, but by Friday they were on their way to an all but certain rendezvous with the 104.94 target shown. Because investors are obsessed with oil’s every move, we can infer
$GDXJ – Junior Gold Miner ETF (Last:110.58)
Like Gold futures, this ETF proxy for junior miners spent the week in timid remission. Although it triggered a theoretical ‘buy’ signal on Monday, the follow-through failed to reach the midpoint Hidden Pivot resistance after four days of flailing. That could chain in a trice, however, presumably with a jump-start
$$TNX.X – 10-Year Note Rate (Last:4.40)
Rates on the 10-Year Note came within a hair on Friday of lows not seen since October. My suggestion is to enjoy it while it lasts, since the intraday bottom closely coincided with a Hidden Pivot target at 3.952%. The actual low was 3.956%, which was near enough to consider
$SIH26 – March Silver (Last:89.135)
It took buyers all of three days to gnaw through heavy resistance at the 90.165 midpoint Hidden Pivot of the pattern shown. Adding to the challenge was the 92.015 peak recorded on Feb 4. It had served as a stop-loss for a ‘mechanical’ short from 10 points lower that I
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