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The Morning Line

Is Copper Signaling the Return of Inflation?

I’ve been a hardcore deflationist for so long that it took a wake-up call from the always astute Jesse Felder to jolt me out of my complacency. His latest report is headlined Dr. Copper Could Soon Deliver a Diagnosis of Inflation, and it’s an eye-opener. The chart accompanying Felder’s think-piece suggests that copper futures have been developing thrust for the last several years that could launch a steep rally. He uses a pennant formation to show this, and the breakout point on his chart would come at around $2.95 per pound if it occurs this month. I have illustrated his pennant in the chart above with red lines. My perspective is somewhat different and uses the Hidden Pivot Method to extrapolate a breakout at exactly $3.12 per pound. Any higher, especially if the futures can close for two consecutive months above that price, would be very bullish. But even someone with no knowledge of technical analysis can see that all signs point higher, with many uptrends of varying degree in play simultaneously. My technical runes say that a strong breakout to the upside would have the potential to push the price of a pound of copper as high as $5.33. If so, the corresponding inflation we might expect to see in the price of goods and services would be severe and a jolt to the global economy, especially since inflation has lain dormant for nearly 40 years. ‘The Doctor’ Is Usually Right Concerning copper’s ability to predict inflation, I’ll let Felder explain:  Traders call copper ‘Dr. Copper’ because he has a Ph.D in economics. In fact, most of the time, Dr. Copper forecasts recessions and recoveries, inflation and deflation, far more accurately than his colleagues in the ‘dismal science,’ so it pays to pay attention to his macroeconomic messages.  Just so.  And although I continue to believe that a deflationary endgame for the global financial bubble is unavoidable, if copper were to bolt sharply higher I would have to concede that the deflationary bust I’ve been anticipating for so long may lie further down the road. Regardless, the potential for a catastrophic outcome, presumably but not necessarily deflationary, would remain. That’s because steep inflation would push interest rates high enough to implode the global debt bubble, a quadrillion dollar credit edifice that is fatally addicted to low rates and which could not adjust to a sudden, 100-basis-point upthrust, let alone entrenched rates of 5% or more.

Impeachment Can’t Compete with a Bull Market

If the farce of impeachment has had an impact on the stock market, it appears to have steepened the bull’s ascent. A fact not lost on investors is that Trump’s reelection odds have probably gone up as a result of the Democrats’ ill-conceived, relentless attempts to sink him. Pundits still talk as though the 2020 election will be close, but as things stand, a pro-Trump landslide appears more likely. Biden’s own Ukraine-related transgressions are far more serious than anything Trump is alleged to have done, and only voters terminally afflicted with Trump Derangement Syndrome could fail to see this. As for the competition, does anyone actually believe a Socialist who lives for the chance to swing a wrecking ball at the U.S. economy, could get elected with unemployment running at 3.5% and the stock market hitting record highs?  Hillary and Mike Bloomberg are waiting in the wings and probably have a better chance of unseating Trump, but not much. The latter, a white billionaire, will have more than a little difficulty getting nominated at a convention controlled by the Democratic Party’s ultra-left wing. As for Clinton, she is as disingenuous, corrupt and unlikeable as ever, and only a hack editorialist at the New York Times or some idiot pollster could think she has a chance of regaining the White House. The Biggest Risk The foregoing notwithstanding, a bear market that comes, as they always do, from out of nowhere, could still spoil Trump’s re-election bid. Odds of this happening will decrease with each passing month, and the waxing bullish effect could soar out-of-control if stocks are holding steady come summer. In the meantime, the bull market and an exceptionally strong economy have made a mockery of the impeachment hearings, which almost no one is watching anyway.

Trump Got a Pretty Good Trade Deal After All

Stocks have been running in place since Friday, presumably developing thrust for a move to new record highs. Ordinarily, the signing of the trade pact with China might have been expected to provide more boost than we saw on Wednesday. But the news was tempered with some facts that evidently were not widely known. Reportedly, many of the tariffs put in place during the two-year trade war will remain there until after the U.S. election. The very good news, however, is that President Trump has not given away the store just for the sake of appearances. He is willing to scale back tariffs on more than $300 billion in goods if China shows good faith toward the pact just signed. That means not only opening up certain markets to U.S. producers, but taking preliminary steps to demonstrate respect for intellectual property.  We’d been skeptical that the agreement would amount to much, but it’s probably as good a deal as we could have hoped for. The opportunity to improve on it during new rounds of talks will surely have a positive impact on the stock market between now and next November.

A Growing Scandal Has Barely Fazed Boeing Shares

Boeing shares were up more than $5 at one point Tuesday, ostensibly on news that orders had fallen to a 16-year low. Go figure. The dearth of new business is a predictable result of the global grounding of the best-selling 737 MAX following two collisions that killed 346. Lately, there has been a non-stop onslaught of bad press that will blacken the company’s reputation for years or even decades. Just last week, internal memos surfaced that showed Boeing to have been recklessly irresponsible for downplaying the need for simulator training to familiarize pilots with the MAX’s automated flight-control system. Moreover, a Congressional inquiry revealed, according to a report in the Wall Street Journal, that “the apparent pressure to save money and make the MAX more marketable to airline customers without upfront simulator training didn’t come from individual employees, [but from] high up in the Boeing corporation.” A week earlier, Boeing reportedly increased its reserves by $5 billion to handle legal fallout from the MAX crashes. Remember GE’s Long Goodbye? That’s not exactly what investors want to hear. And yet, preternaturally strong hands have so far managed to hold the stock above lows near $320 recorded last October, after the second crash. This has been possible in part because sales of other aircraft, including 787s and wide-body 777s, have remained relatively robust. Boeing has lost considerable ground to archrival Airbus nevertheless, and it is still uncertain when the MAX will fly again. It has been no small feat under such duress for the institutional investors with whom Boeing shares reside to plump them for distribution. But who would be the buyers? Certainly not widows and pensioners, since the stock sells for more than $300 a share.  Whoever steps in, it seems likely that BA will trade for significantly less before the company has extricated itself from the MAX morass. Don’t be fooled in the meantime when BA rallies spectacularly now and then, as it will. This tends to happen no matter how grim the outlook for a giant company that happens to be over-owned by institutions.  DaBoyz will take their time before they pull the plug, enforcing an omerta that would ostracize any institutional seller who breaks ranks. The same was true of GE, which took nearly a decade to fall from $58 to a still unsurpassed low at $5 in 2009. An intervening rally that peaked at $32 in 2016 might have suckered the rubes, but the stock has since relapsed to a low in December of 6.40. Caveat emptor.

Are You All-In and Brimming with Optimism?

AAPL’s vertical climb since October has grown treacherous, as the chart makes clear. Last week we told subscribers to be alert to the possibility of an important top at 314.28, but now we see another potentially daunting Hidden Pivot resistance at 319.92. These targets, which lie just inches above Friday’s close, are purely technical, but we’ll lay odds that a chartist will come closer to calling the top than some analyst who is paid to invent reasons for shares to move higher more or less forever. As regards AAPL, Rick’s Picks tracks it obsessively because it tops every portfolio strategist’s list of must-owns. Small wonder, then, that institutional investors have continued to pile into just a handful of high-fliers, shunning value stocks as though they were chopped liver.  Apple, Microsoft and Facebook shares, to name three sure things, returned 108%, 60% and 53% respectively over the last twelve months. Why would a portfolio manager glutted with an endless gusher of Other People’s Money bother to look elsewhere? True Believers But since we know that the parabolic rallies in these stocks and a few others cannot continue indefinitely, we might ask: What will cause them to fall? Not ‘fundamentals’, for sure.  Indeed, if AAPL’s price were to be halved over the next six months, it would be because perceptions have changed, not the underlying facts. The new set of facts will come later, when the same geniuses who have been scarfing up FAANG stocks hand-over-fist for the last year see the glass as half empty. It is predictable that this change of heart will come only after the bear market has ravaged investors. But it won’t happen until stocks are halfway to the next bear-market bottom — too late to save the hoards of true believers. More immediately, if the AAPL rally targets flagged above fail to stop the stampede, keep in mind that shares of RCA, known to the shoeshine boy and his customers during the Roaring Twenties as ‘Radio’, rose tenfold in the five years preceding the 1929 crash. To duplicate this feat, as well as RCA’s subsequent 97% plunge, AAPL would need to hit $1,000 and then fall to $30 in just a few years. That seems unlikely, even if consumers hold onto their iPhones for much longer in the next recession and Apple is unable to make the kind of money in the entertainment business that it has made so easily selling overpriced hardware. Why worry about such things now? Well, there is that chart. But if it speaks to you and says that AAPL’s best days lie ahead, then you are probably all-in already. What could it hurt, though, to take some money off the table? _______ UPDATE (Jan 13, 4:34 p.m. EST): One target down, one even better target to go: 319.92.  AAPL blew past the former with such disdain that one might have thought the stock is on its way to $400.  Maybe. But let’s see first how the thundering herd handles 319.92. Even considering how easily it took out the lower number, I’ll be surprised if we don’t see a tradeable top somewhere in the vicinity — meaning within $1-$2 — of the second.

AAPL Blowoff Must End, but When?

Paying close attention to AAPL is still the best way to know exactly what’s on the tiny brains of portfolio managers. Lately they have been acting as though the company can do no wrong. That’s arguable, but even if they are mistaken it doesn’t mean we should get in the stock’s way. To the contrary, numerous Rick’s Picks subscribers reported cashing out of profitable bullish positions that had been predicated on a run-up to at least 309.16. The stock hit that Hidden Pivot Thursday on a manic short-squeeze leap at the opening, then spent the rest of the day doing the hokey-pokey with it. There is however yet another target slightly above, at 314.28, and I’ll be more than a little surprised if AAPL simply blows past it.  It comes from a clear and compelling ABCD pattern that is shown in the chart accompanying the AAPL tout below. (I’ve made this graph publicly available so that non-subscribers can see the enlarged version by clicking on it.) I have continued to emphasize the importance of getting Apple right, because as long as the company’s shares are moving higher, the broad averages cannot but move with it. That being the case, we should pay close attention to price action when — not if — the stock hits my benchmark. If this happen in the final 15 or so minutes of Friday’s session, I’ll be taking home a few cheap puts over the weekend, since you never know.

Iran Retaliates, Killing None but Scrambling Stocks and Gold

Stocks are getting pummeled Tuesday night following an Iranian missile attack on a U.S. military base in Iraq.  Index futures are down more sharply than they would have been if the story had broken during the regular session. But with the second- and third-stringers working the trade desks and an absence of liquidity, they had no choice but to let stocks fall as steeply as possible without having to buy too much of it on the way down.  Whether the attack turns out to be the start of World War III remains to be determined, but my hunch is that traders will take the optimistic view and reverse the onslaught shortly. Cautious Targeting In the excitement, February Gold spiked above a 1605.90 target we’ve been using since December 12, when the futures tripped a buy signal at $1491. Tonight’s towering high at 1613.30 has been followed by a selloff to 1592.20 so far, but we should expect bulls to hold their own over the next few days as Wall Street feigns sufficient nervousness and concern to appease the news media.  If Iran continues to attack, perhaps even killing an American, that would likely be sufficiently disturbing to push gold above tonight’s peak. However, Iran apparently recognizes the danger of trying this, since its fusillade reportedly did not target American troops. They can be such nice guys when they know how easy it would be for the U.S. to bomb their power supply into oblivion. The mullahs could turn out to be paper tigers — and wouldn’t that be bullish for the world! _______ UPDATE (Jan 8, 10:05 p.m. EST): Hey, guys, let’s not overdo it! Ebullient buying has goosed the Dow 750 points above lows recorded Tuesday night. A corresponding selloff in gold has been equally extreme, shaving $60 from the recent peak. Even so, both trends seem likely to continue for at least another day, since they have outstanding Hidden Pivot targets respectively above and below Wednesday’s closing levels.

Bull-Market Mania v. Iran: Place Your Bets!

Critics of the air strike last week that took out Iran’s top general stopped just short of saying he deserved better.  Even the partisan hacks at CNN and MSNBC dared not push too hard against official reports that Iran was planning to step up attacks on U.S. military bases and diplomatic outposts.  The Democrats’ main concern is that Soleimani’s assassination could lead to war — or to restate this more accurately, to an escalation of a war that has been simmering since the days of Jimmy Carter. The pollsters as always will be looking in all of the wrong places for signs that Pelosi, Schumer and the Somalian wing of Congress are right, that we should live in dread of retaliation rather than celebrate the death of a man who exported jihad to the world and who was singularly responsible for the death or dismemberment of many hundreds of U.S. soldiers. Could anyone, even Trump’s most vehement foes, actually believe Soleimani’s thirst for American blood and his ability to inspire murder and mayhem in the name of Islam were at an end? Why would so successful an evildoer not have been planning more attacks?  The President was right to order his execution, and arguments to the contrary seem unlikely to gain traction with the American public. Who’s the Bully? That won’t stop the news media from trying, though, and we can expect them to treat the Ayatollah’s threats with the utmost deference. But as fears begin to recede, with the possibility that Iran is revealed not only as powerless but mortally vulnerable to stepped-up U.S. reprisals, look for business to return to normal.  What an epiphany that would be for those who have regarded America as the bully in the relationship between the two countries! How will we know when anxieties have begun to ebb? Just follow the stock market, not the pollsters or the headlines.  The bull market has been shrugging off threats for more than a decade, defying logic and sometimes even good sense. For better or worse, it fears nothing: not a global trade war, not falling corporate profits, not impeachment, nor even the possibility of a loony socialist in the White House. Yes, stocks would surely implode if investors sensed Elizabeth Warren or Bernie Sanders was likely to win. But odds of that are so remote at the moment that it’s not even a faint concern on Wall Street. To the contrary, Trump’s seeming invincibility — never mind how he polls — has been a source of strength for the market, and the effect will only increase when the drummed-up controversy over the drone strike begins to subside. To be sure, stocks are getting hit Sunday night ahead of a likely test of Friday’s lows. But the selling has been subdued so far and the lows are holding. This suggests that bargain hunters outnumber panic-stricken sellers at the moment. That could change if Iran strikes back in some sensational way.  But if they haven’t done so by February 2, when Superbowl 54 is scheduled to be played, the worry warts had better stand aside for more bull-mania.  Yes, it will seem crazy if shares forge blithely higher bearing the weight of yet another geopolitical anvil. But they’ve done so innumerable times in the past, and we therefore should not be surprised if the damn-the-torpedoes attitude prevails for yet a while longer. _______ UPDATE (January 6, 5:03 p.m.): I searched in vain this morning for a way to get short in the E-Mini S&Ps with risk under tight control. I threw in the towel around mid-day when a series of ratcheting tops and shallow pullbacks convinced me there were too many bears picking tops every inch of the way. Until then, my reasoning was that stocks had already done enough since stabilizing on Friday to demonstrate that when there’s money to be made and stocks to pump up, Wall Street couldn’t care less about threats from Iran. That was the subtext of the commentary above, and today’s price action only makes me even more certain that bull-mania is alive and “well” (if such a term can be applied to a stock market inflated by greed, folly and grandiosity). Even so, expect a nasty swoon shortly when the last bear has been impaled by an exhaustion spike.

Glue-Sniffers Romp as 2020 Begins

Wall Street’s best and brightest — the same irrepressible glue-sniffers who worked so hard last year throwing a trillion dollars of Other People’s Money at a dozen stocks — came out in force on the first trading day of 2020 to reassure investors that they are as revved up as ever and capable of moving the broad averages significantly higher. I’d allowed for a 7% rally in their uber-favorite stock, AAPL, to lead the stampede, but I overestimated the time it would take to reach the target (which I’ve adjusted downward to 311. 77). After Thursday’s $7.25 surge, it’s possible bulls will get there by Monday if not sooner. See my DIA tout below for a way to leverage the move. I’ve also posted in the Rick’s Picks trading room a butterfly strategy in AAPL that offers a very low-risk way to cavort with the revelers. _______ BULLETIN (Jan 3, 1:45 a.m,): Wall Street is not going to simply shrug off tonight’s very big news concerning a targeted strike against Iran and its military’s top general, Soleimani, but it will be interesting to see how much resiliency the stock market shows over the next few weeks. My hunch is that U.S. stocks will be trading significantly lower, notwithstanding the maniacal buying spree of the last month. Ordinarily I would ratchet down the aggressively bullish stance of today’s front page, but I’ve got an early flight back to Florida tomorrow and don’t fancy revising my touts and commentary at this hour. I will have more to say in Monday’s edition.

No Respite in Sight for Bears

Stocks seem all but certain to move sharply higher this week, since AAPL has an unfulfilled rally target at 314.28 that’s seven percent above. The only puzzler is that every Tom, Dick and Harry in the guru business seems to be expecting a selloff to commence around mid-month. The most logical inference I can draw from this is that the rally will pick up steam in the second half of January and become a wilding spree. If so, there’s a 3348.75 Hidden Pivot target waiting for the thundering herd in the E-Mini S&Ps. It equates to a 1500-point rally in the Dow to around 30,000.

Happy New Year

What a year it was! Those fortunate enough to have been substantially untouched by news have reason to be thankful. Today’s touts will be the last for 2019, but stay tuned for updates, most likely perfunctory, as stocks inch toward the finish line of this maximally truncated holiday week. May the year ahead be bountiful in all good ways.

Little Room for Contrarians as Year Ends

After watching the bull market break all the rules for the last ten years, we know better than to think that even the most formidable-looking technical barrier will slow it down for more than a day or two. Indeed, seldom have we seen prices fall for three consecutive days — a rarity even in the good old days. (Old-timers may recall that the October 1987 crash, when many traders might have thought the world was ending, lasted but for two full days and a fraction of a third.) Still, it would be careless to ignore the double barrier which stopped the DJIA’s ascent on Friday: a Hidden Pivot resistance and a trendline that both trace back to the first quarter of 2019.  Instead of getting all worked up about the prospect of a healthy correction to end the year, however, we’ll simply assume that bulls are capable of holding things steady for at least a few more days, come what may. Since everyone expects this, or perhaps a continuation of December’s wilding spree, we should be on our guard against a (very) contrarian surprise.

‘Body Bags for Bears…’

Bears don’t have it wrong — this spectacular bull run is not going to end well. Its days are numbered, if only because of the double whammy of Boeing and FedEx, two global giants whose very considerable problems will be weighing on institutional investors for the foreseeable future. At the margin, this will create enough psychological drag on them to make a Dow push much above 30,000 unlikely. In the meantime, short-covering is the main force powering the broad averages into a steepening ascent. “This market reminds me of KrispyKream, when everyone knew it was going to zero but the shorts were being carried out in body bags,” wrote one long-time subscriber. “I think it’s fair to say that trying to pick tops is suicide. The blow-off top will probably give you an entry using your new system but in the meantime sitting on one’s hands is probably a good idea.” An even better idea is to surf the wave using the bullish targets published in Rick’s Picks as minimum upside objectives. Better to be guided by a skeptic who can read a chart without bias than by a permabull who would have had clients invested up to their eyeballs in the summer of 1929.

Gold’s Straight-Jacket Escape

We’ve become used to seeing gold struggle for loft when stocks are rallying because the chimpanzees who move the markets can’t handle the implied mash-up of risk-on/risk-off strategies.  Lately, though, bullion has notched some sweet gains with stocks in their by-now reflexive rally mode. Bulls should take encouragement from the moderate surge in gold under way late Wednesday night. With the E-Mini S&Ps trading five points higher, Comex February Gold has been up as much as $5, extending a $25 gain recorded over the last few sessions. If it picks up a little steam, the rally could soon reach the 1529.50 target first broached in Rick’s Picks two weeks ago, when a ‘buy’ signal triggered at 1491.30.

It Smells Like Distribution…

Friday’s subdued rally had more than a faint whiff of distribution about it. DaBoyz had shorts on the run in the early going, with the Dow up about 230 points in the first hour. But instead of reaming bears a new orifice as we might have expected, the erstwhile Masters of the Universe struggled merely to maintain altitude and eventually had to close the broad averages well off their intraday highs. If you took a short position over the weekend there were some encouraging signs. For one, AAPL hit a 283.97 rally target that Rick’s Picks has been drum-rolling since March, when the stock was selling for around 180. The actual high at 283.54 occurred on a dubious spike just ahead of the opening bell. The upthrust turned into a bull trap when AAPL sold off $5 intraday and never recovered.  The high stands to be a potentially important one for the bull market, since AAPL is the most popular stock in institutional portfolios. If it has hit a ceiling, then so has the stock market. Rally Outrunning Earnings The second encouraging sign for those who faded the rally was a top in the E-Mini S&Ps at 3229.50 that missed the Hidden Pivot rally target shown in the chart by a single tick. It had been sent out to subscribers the night before. Will these coinciding, fleeting peaks mark an important top? We could find out soon if shares head south on Monday and the decline gains momentum as the holiday-shortened week wears on. But even if new record highs are coming, a correction at this point would be constructive, since it would quell feverish buying that has driven equity prices much higher without any corresponding growth in earnings. _______ UPDATE (Dec 23, 6:30 p.m.): The rally is stuck in a quantum warp recalling Heisenberg’s uncertainty principle: the more exactly the position is determined, the less known the momentum. We have some beautifully precise Hidden Pivot targets, particularly in bellwether AAPL, and a compelling trendline in the Indoos, to provide theoretical stopping power at these levels. Unfortunately, buyers are not showing much respect for our “technicals,” let alone fear.  On balance, the small put position in AAPL that some subscribers have taken will have to suffice to hold our interest and attention as the holiday-shortened week slogs on. If the week ends with stocks having done nothing, it is only because the herd confidently expected “something” to happen.

Boredom Could Stoke a Friday Rally

The stock market’s week has been so tedious, even with an impeachment, that we shouldn’t be surprised if something happens to cause traders to emerge from their coma. A compelling trendline that I’ve mentioned here before implies the surprise would likely be to the upside, since the Dow Industrials would need to rise 500 points to reach it. The actual number is 28,692, and wouldn’t that be a shocker! Most unexpected of all would be for this to happen following a slow start. If the opening looks weak, as in ‘stage-managed’, don’t be afraid to take a small speculative stake in some cheap out-of-the-money calls in the FAANGs, TSLA, MMM or MSFT.

No Way Bulls Can Shrug Off Boeing AND FedEx

When the Dow Industrials gained 100 points the other day as Boeing was getting clobbered, I compared it to a runner with a broken foot sprinting 100 meters in under 11 seconds. Bulls looked nearly as impressive on Wednesday, hanging tough while FedEx shares were getting the stuffing knocked out of them.  The stock was down $17, or nearly 10 percent, but if this unnerved institutional traders, you couldn’t tell from the tape. DaBoyz actually managed to levitate Boeing by $4.50 — no small feat when you consider that the aircraft manufacturer’s worries are as big as FedEx’s. Indeed, there would appear to be no relief in sight for either company. It will take FedEx years to build a ground-delivery system capable of handling e-commerce orders without becoming increasingly dependent on Amazon’s already formidable network. There is no jackpot at the other end, either, since home deliveries of small packages will be much less lucrative than the business-to-business shipping at which FedEx has long excelled. Max-Out in January As for Boeing, it will stop building its biggest-selling jetliner, the 737 Max, in the wake of two crashes that killed 346 passengers. The company announced it would halt the Max assembly line in January, but no one can say for certain when or even whether production will resume. Can the stock market continue to rampage with two of America’s most important companies on the ropes?  Probably not.  In the last few days, the bull market’s steep trajectory has gone flat as DaBoyz gingerly attempt do distribute as much stock as they can before pulling the plug. I still foresee a bullish year ahead for stocks, in large part because Trump is looking more and more like a two-term president. But that doesn’t mean we won’t see a very nasty correction between now and then. As most of you would surely agree, this would be an unsurprising time for one to start.

Boeing’s Troubles Could Cool Bull Fever

Considering how Boeing shares got pulped on Monday, the Dow’s 100-point gain was nothing short of stunning. It was akin to a sprinter with a broken foot running the 100-meter dash in under 11 seconds.  During the bull run of the last ten years, DaBoyz all but perfected the art of rotating money from one sector to another so that there was almost never weakness across-the-board.  They appeared to preserve their stellar record on Monday, pumping up ten Dow stocks by $1 or more while Boeing shares were falling nearly 5%. Now that’s rotation! It suggests that the aircraft manufacturer’s  institutional sponsors have resigned themselves to a long slog before they can turn the stock around. They had shaken off an onslaught of horrendous headlines since May, holding the stock in a $50 range while customers decided whether to curtail orders for a 737 Max aircraft that crashed twice within a five-month period, killing 346 people. The company announced over the weekend that it plans to suspend production of the jetliner, its biggest seller. This will cut quarterly cash flow in half to around $2 billion and supposedly knock 0.3 of a percentage point from annualized U.S. GDP. This is a very big deal, and it seems almost certain to cool the bullish fever that has gripped Wall Street since early October. The yellow flag is out, and we’ll be watching the intraday charts diligently for signs of a top. Stay closely tuned to Rick’s Picks if you care. _______ UPDATE (Dec 17, 7:45 p.m.): The stock closed unchanged after being down more than $6 in the early going. This was very impressive, and it demonstrates the all but unlimited buying power that can be summoned to defend Boeing’s share price come hell or high water. It also hints at how gingerly BA’s institutional sponsors will proceed when they try to distribute as much  stock as possible in the weeks and months ahead. More immediately, look for minimum downside to 311.89 (daily, A=398.66 on  4/5/19); then, following a bounce, a relapse that breaches the watershed low at 292.47 recorded last Christmas.

Watch Wall Street Celebrate Britain’s Election

Now comes yet another investable idea to drive the bull market in the months ahead: Donald Trump’s reelection bid looks stronger than ever. His odds jumped following last week’s election in Great Britain. So decisively did voters rebuke Labor’s hard-left candidate for prime minister, Jeremy Corbyn, that it can be safely assumed that neither of his socialist comrades in the U.S. — Bernie Sanders and Elizabeth Warren — has a prayer of becoming president. And because America is not quite ready for a gay couple in the White House, Pete Buttigieg, another a man of the far left whose track record as mayor of South Bend, Indiana, stinks, will not win either. That leaves Joe Biden, a white male whom party activists find deeply offensive;  and another white male, Michael Bloomberg, a multibillionaire who is even less likely to get nominated by the wack-jobs currently in charge of the Democratic party. Cue up Hillary, an increasingly likely hail-Mary nominee who will be no more appealing to the average voter come November than she was in 2016. Dow 30,000 Ahead! Last week’s shift in election odds will be all that bulls need to push the Dow above 30,000. It stood at 28,136 on the close Friday, up just a few points. This was more impressive than it seemed, since the stock market was bucking heavy ‘buy the rumor, sell the news’ headwinds. The news was that the U.S. and China had concluded the initial phase of a trade deal and that they would start working on phase two right away. (There was no immediate confirmation from China, but that seemed not to concern bulls or, for that matter, short-covering bears.) It is logical to assume that the stock market will not get nearly as much boost from Trump tweets concerning nebulous phase-two talks as it did from 2019’s trade-tweet mania. But this will be more than offset by the very bullish perception that Corbyn’s devastating loss has all but killed for the foreseeable future the prospect of a socialist U.S. president. Looking at stocks from a technical standpoint, the most potent ammo I’d possessed to throw at bulls last week was a longstanding target at 15.66 in VXX (see chart, above), a trading vehicle that tracks short-term S&P volatility. The target was hit on Friday after a horrific slide from 27 begun just two months ago. VXX moves lower when stocks rally, and both trends stood to reverse when VXX hit a major low. Although I’d be surprised if a tradeable reversal fails to materialize, I now expect it to be muted. I’m not quite ready to throw in the towel, though, and it’s possible Friday’s 15.51 low will turn out to have signaled a major top for the stock market. We’ll wait and see how things develop in the days ahead, but we shouldn’t count too heavily on making money on the VXX calls we bought Friday. _______ UPDATE (Dec 16, 10:33 a.m. EST): I have in fact thrown in the towel. The next target seems surreal: 9.92. Here’s the chart. If it’s achieved, the Dow will be trading w-a-a-a-y above 30,000. There’s an illuminating discussion in the Trading Room at the moment concerning how this popular trading vehicle is run as a quasi-criminal enterprise.

Time Magazine’s Courageous Choice

It’s hard to predict how investors will react to the big news when stocks start trading on Thursday morning. I am of course referring to the selection of teen climate sensation Greta Thunberg as Time magazine’s Person of the Year. This is a bold and courageous choice by the editors, and we can think of only one person in the publishing world who would have had the guts and imagination to try and top it: the late Hugh Hefner. If Hef were still around,  we would almost surely be seeing a transgendered person of color featured as Playmate of the Year. What a thrill that would be, watching two legendary has-beens of the publishing world duke it out for top virtue-signaling honors in the Flavor of the Year category. Actually, Playboy will have a chance to one-up Time when Ms. Thunberg celebrates her 18th birthday in two years. Could they get her to pose for a centerfold by offering to donate $50 million dollars to her favorite climate fearmonger?  Would anyone be shocked if they tried — or, if they failed, be surprised when Sports Illustrated makes her an even more salacious offer? ______ UPDATE (Dec 12, 11:35 p.m. EST): Investors have responded to Time‘s courageous choice with an explosive rally that seems to say “Give us more Greta!!!!”  No one in history has won this increasingly misapplied award for two consecutive years, but perhaps Ms. Thunberg will be the first? She will have tough competition, though, if Hillary Clinton should decide to jump into the presidential race, or the Squad stumbles onto a cure for dandruff.