Ricks Picks header image

The Morning Line

Time to Sell the News

The stock market is under heavy distribution, and for good reason: Even if the vaccines we’ve been reading about lately are as effective as claimed, they will be too late to prevent tens of thousands of U.S. business from going under. Supposedly, vaccines from Pfizer and Moderna are nearly 100% safe and 95% effective. This is wildly speculative, since no one knows how long immunity will last; whether those who get vaccinated will still be at risk for transmitting the virus to others; and whether mRNA vaccines will cause serious autoimmune reactions. These are hardly niggling concerns, although they didn’t stop investors from bidding shares into the ozone when Pfizer announced encouraging trial results two weeks ago. Stocks were already priced for perfection, discounting not only the prospect of a Covid-free world, but the possibility of the U.S. economy returning to the 3%-plus growth it enjoyed under Trump’s stewardship. These are just pipe dreams, and crazy ones at that. Biden is not Trump; he is a political wimp, and the Democratic Party to whom he owes his apparent victory is extremely anti-business. They have said as much, and that’s reason enough for investors to brace for a ‘Trump rally’ in reverse starting sometime before Biden takes office. The coming bear market will draw irresistible power from the vaccine’s inevitable failure to effect an instant cure, and from the economy’s inability  to return to anything even remotely resembling its ebullient old self in the foreseeable future. Folly’s Apogee Under the circumstances, there has probably never been a better time to ‘sell the news’, since shares have been ascending heavenward since March on hopeful ‘rumors’ of a global cure. The effect has been supercharged by unprecedented credit stimulus flooding into shares, real estate and the consumer economy.  When the downturn hits, the Guvmint will get the blame for failing to enact a second stimulus package. It is true that the Fed and Mnuchin have remained in a standoff over the size of the next stimulus. The Fed likes the Democrats’ $2.2 trillion package, which makes Treasury’s $500 billion, Republican-backed offer seem niggardly in comparison.  In truth, neither would provide more than a temporary shot in the arm for a vast swath of travel-and-entertainment businesses that are headed into certain bankruptcy this winter. And even under the best of circumstances there is zero chance that a revived economy will be strong enough to grow itself out of a debt hole that has reached economically fatal levels. The illusion that a handful of giant tech companies can sustain economic growth, and that their shares deserve earnings multiple ranging from 35 (Apple) to 91 (Amazon), will come to be seen as one of the greatest episodes of mass folly in history.  It is of a piece with the equally absurd notion that the Fed’s money-printing scam can sustain the illusion of prosperity indefinitely.

A Tough Year for Santa

The smell of stock-distribution is as pungent as wood smoke these days, but you’ve got to give DaBoyz credit for levitating a million tons of swill while they work their special brand of magic and deception. Usually Wall Street is pushing the ‘Santa rally’ narrative hard at this time of year, always leavened by urgent speculation about how “green” Christmas will be.  But Santa obviously won’t be making the rounds in 2020, especially in department stores where his beard would become a superspreader to rival the hydrogen bomb in killing power. Definitely not the Kris Kringle of our childhood. One holiday fixture that is certain to survive is endless TV showings of  It’s a Wonderful Life, the Jimmy Stewart classic with a conclusion that could bliss out Jack the Ripper. Not any more, though — not since, metaphorically speaking, financier George Soros suited up to replace the no longer believable banker, George Bailey. Will there be anything about 2020 to look back on with nostalgia?  If so, we are in for a very rough decade. A successful vaccine is everyone’s best hope at the moment for 2021, but few believe it will return things to normal.  For in fact, given the rancid political climate and the vast swaths of the economy that have been laid waste, most of us are finding it difficult to even imagine what “normal” might be. Something will sustain us in any event, but that old standby, bread and circuses, is going to ring hollower than ever.

Scampering Up the Wall of Worry

Rick’s Picks has tracked the Russell 2000 ever since it became apparent in mid-summer that the chimpanzees paid to throw your hard-earned money at a relative handful of stocks and invented themes had agreed to shovel the lion’s share of it into small-caps. It should be obvious by now, even to hard-core permabears, that the ballistic skew of the Russell index — and, in turn, all the others — is oblivious to such matters as concern us in our daily lives. America polity may be unraveling before our eyes, and a fresh wave of Covid-19 has already crushed hopes of an economic resurgence. But as long as the stock market is held buoyant by a practically limitless inflow of ginned-up capital from around the world, how could it possibly crash? Indeed, it cannot.  And yet, charts like the one above allow us to at least imagine a top, even if we have no clue what could cause it. The chart makes clear that nothing is likely to stop IWM, an ETF proxy for the Russell 2000, from reaching the 184.73 target. But this Hidden Pivot resistance is sufficiently clear and compelling to suggest that it won’t be a pushover when bulls get there and want more. That is not to say IWM can’t pop through. But if it does, we’d have to concede that the small-caps, perhaps joined by FAANGs and other growthies that have been relatively quiet lately, are embarking on a blithe path higher that will see the Dow trading well above 30,000 by 2021. _______ UPDATE (Nov 18, 9:04 p.m.):  A wave of selling hit late in the session, offering bears a rare breath of fresh air. Now let’s see if the scuzzballs who control the markets can  reverse the mood on ‘turnaround ‘Tuesday, since a mere two days aloft did not give them much time to distribute stock ahead of the coming relapse in the economy. At this point any rally should be regarded as an opportunity to get short.

Whose Facts Do You Trust?

Biden, schmeiden. On Wall Street, it would seem, no one cares. Stocks are up substantially since the election even though the unsettled presidential race remains one of two unusually large elephants in the room. The other is the pandemic, which appears close to going out of control in some areas of the U.S. This, too, has yet to have any discernible impact on stocks.  We see only evidence that no matter what the news, and however great the uncertainties that govern our lives, the inexorable flow of money into shares is simply too powerful and steady to abate. There was a time when the stock market supposedly hated uncertainty. By now, however, it is clear that investors have become inured to the unknown. Something else will undoubtedly unsettle them at some point, but we can rule out fear of the future. An invasion from Mars would probably fall off the front page in three days. It is in our personal lives that uncertainty is taking a heavy toll. If Biden assumes office and tightens the lockdown, it is foreseeable that many millions of Americans will take to the streets and disobey him. Look for an insurrection over mask-wearing to come first.  One might think the question of whether masks have helped suppress the pandemic would be settled by now. But you would be wrong, for the question has been settled only politically: hard-core liberals wear masks in their own homes, in their cars and during sex, while conservatives disdain them and wear them only indoors and out of politeness. Don’t They Know? In the photo above, taken over the weekend in my hometown, Delray Beach, Florida, virtually no one is wearing a mask. The restaurants and sidewalks were packed, presumably with diners and pedestrians of all political persuasions.  Don’t they know that Covid-19 is resurgent across America? They might reply, Not around here, bub. And yet, the camera doesn’t lie. If such a thing as a superspreader event exists, Atlantic Avenue in Delray on a Saturday night is it.  The scene in the picture is the same as you would have witnessed on any Friday or Saturday night over the last several months. And yet, there has been no Covid outbreak here, nor in the rest of Florida. This is notwithstanding that the state’s Republican Governor, Ron DeSantis, has been one of the most permissive in the nation as far as letting business go on as usual. Do you think you know your facts about masks? Here are two sources to check your knowledge that draw opposite conclusions. The first is from Mercola, a meticulous purveyor of information on all things concerning personal health. Mercola musters considerable evidence that masks have had very little impact on the pandemic’s spread. Read it for yourself and decide. Then watch this remarkable 3-D video from the New York Times. It explains so clearly how masks do their job that you will be vexed to understand how Mercola could possibly be right. Such are the challenges we face in sorting fact from falsehood in the supposed Age of Information. _______ UPDATE (Nov 16, 10:30 a.m.): I stand corrected, for in fact, as a reader has pointed out, Florida’s infection rate has been edging toward a red-zone 10%. This implies that Delray’s weekend block parties could soon end. My impression that the spread of the virus was only moderate came from an easing of restrictions at that gated community where I live.  The administrators have been super-cautious but eased the lockdown over the last several weeks. However, it would seem their rule changes lag county health statistics somewhat. Although they are trying to protect a population whose average age is near 70, they are struggling to balance this concern against the economic and social costs of shutting down amenities that include golf courses, dining rooms, swimming pools, a fitness center and all the rest.

Stocks Finally Bend to the Weight of News

Tech stocks have hit a wall, unable to remain afloat on a tide of stressful news. Although Wall Street would have us believe investors shouldn’t care who wins the election, this idea is preposterous.  There is simply no way that a takeover of Capitol Hill by the Democrats could be perceived as good for business and the economy.  But there’s a Catch-22 if Trump succeeds, since a court decision paving the way for a second term could gravely unsettle America for years to come. A vaccine remains a bullish wild card, as the mindless herd demonstrated on Monday. Pfizer announced a drug that supposedly has been 90% effective in trials, touching off the most powerful one-day rally in stock-market history. The clinical basis for the drug maker’s claim went largely unexplored at first, presumably because the stock market’s canny masters had every reason to avoid hard questions that might queer the celebratory mood .  But doubts surfaced on Tuesday nonetheless, causing shares to extend Monday’s tech-led retreat. Tiredness seems likely to remain the market’s theme until after the election is settled, which could take as long as two months. Small-cap stocks may be raring to go because that is the ‘story’ the stock market’s masters have been hyping non-stop, but they will not get very far with the FAANGs and other insanely overbought lockdown winners weighing them down. Conclusive news of a truly effective vaccine could goose stocks into a parabola at any time of day or night. However, even a truly miraculous vaccine would not suffice to justify the sensational earnings multiples achieved by many stocks after the lockdown. This could present as promising an opportunity to “buy the rumor and sell the news” as a trader could hope for. _______ UPDATE (Nov 11, 6:35 p.m.):  Stocks showed no particular strength Wednesday and appear to be under delicate distribution. Although shares often seem to rally on any kind of news whatsoever, the really good stuff that causes them to explode — i.e., an effective vaccine(!!!!!!!!) — will be timed for maximum effect. It’s hard to know at this point how often such news will come, but my guess is that an interval of at least 15-20 days must pass to optimize their credibility (such as it is) and effect. _______ UPDATE (Nov 12, 9:42 p.m.): There was a time not long ago when we assumed stocks were coiling for a strike whenever they looked tired. These days, however, the tiredness seems real, even if DaBoyz are unlikely to pull the plug until they’ve had at least a few more days to distribute stock before the broad averages recede substantially from Monday’s crazed peak.

The Case for a New Election (or maybe not. See my update at bottom.)

The acrid aroma of voter fraud has grown so strong that even Biden supporters must smell it. To them, however, it undoubtedly has a fragrance as sweet as lilacs in August. Unfortunately for America, no matter how deep, wide and ugly the scandal might become, it may not be enough to overturn the election result. The news media have demonstrated their ability to control the narrative so completely, and to snuff those who would challenge it so brutally, that it’s possible nothing short of a new election can change the outcome. That is not to say Trump’s all-out effort to prove widespread fraud is just so much tilting at windmills. In Wisconsin, for example, there is evidence of tampering so brazen that it recalls the days when the Kansas City mafia ran a wide swath of Las Vegas. They were skimming one casino’s profits so greedily that a New York capo stepped in to warn KC’s wiseguys to leave a little profit for the house. In Milwaukee, and conceivably many other places, Democrats seem to have departed recklessly from the don’s call for moderation when stealing, Here’s some damning analysis of the city’s vote from Jack Cashill of AmericanThinker.com: “The most striking feature of the data is a fact that cries out for clarification: In seven wards, voter turnout appears to have exceeded [registrations by] 100 percent. In two of those wards, turnout exceeded 200 percent. In another 15 wards, voter turnout exceeded 95 percent. Joe Biden carried 21 of the 22 wards of the 95-plus-percent wards. But then again, he carried all but one of the 67 additional wards in which the turnout was above 90 percent and won 80 percent of the vote citywide. In 25 wards, Biden received 97 percent or more of the vote, none higher than 98 percent. Based on exit polls, it is highly likely that these were overwhelmingly black districts. No other demographic could produce those numbers.” Biden’s Post-Midnight Miracle On the evidence so far, it would seem more than a little plausible that Biden’s miraculous come-from behind victory in five key states — states which Trump had been winning by large margins until ballot-counting mysteriously ceased in the dead of night — was attributable to precinct-by-precinct ballot-harvesting on a massive scale. Milwaukee’s mathematically impossible outcome buttresses the suspicion that a crucial number of unsolicited mail-in ballots were returned to polling stations in the wee hours, nearly all of them marked for Biden. Will Trump’s sleuths and lawyers be able to prove this? Very probably, since circumstantial evidence of  fraud seems to be everywhere. There are even reports that, anticipating widespread fraud months ago when the Democrats went all-in on using mail-in ballots — the President set up a sting operation to monitor and capture election night cheating in real time. But will even this be enough for the courts to award the election to Trump? Not necessarily. Remember, the Democrats control the news media almost as effectively as Stalin did. The dictator systematically murdered 30 million Russians, but it took a generation for the story to emerge (no thanks to the News York Times, which won a Pulitzer for the fawning reports on Stalin that their man-on-the-scene, Walter Durante, filed from Moscow).  Even if it is shown that the Democrats cheated on a wide scale, it may be expecting too much of the Supreme Court justices to think they could choose a president. They know full well that whatever they decide would risk setting the Republic ablaze. Avoiding Civil War Under the circumstances, perhaps only a do-over in key states, held under the very strictest conditions, can save America from self-destructing. Could the Democrats be goaded into settling the score once and for all if it would spare us bloodshed? Possibly not, considering that many of them evidently think the Republic was founded by racists and not worth saving. But if the courts award Trump a second term, the Dems would have a compelling reason to consider a new election. At that point Trump would have an opportunity to suggest something that everyone would surely recognize as good for America: hold a new election in order to settle things fairly and beyond dispute. If both sides are as confident about winning as they’ve been saying they are, the do-over would happen regardless of legal impediments. In the meantime. Trumpers who watched blue-shirted revelers party in the streets over the weekend may have experienced a sense of foreboding, for they have good reason to doubt Biden will be able to improve on Trump’s handling of the economy. Despite the stock market’s spectacular rally since March, the gains are as stable as the hydrogen-filled Hindenburg. Investors seem worried that the Democrats’ far-left political agenda would end the bull market. My guess is that it will end before the inauguration if Biden/Harris are the ones taking the oath. From a political standpoint, the silver lining for America is that the Dems will be too busy trying to avert a Second Great Depression to have time to implement the Green New Deal, pack the Supreme Court, kill fracking, charter schools, the filibuster and all the rest. Trump Optimism Indispensable Democrats will be blamed for the collapse not because of anything they’ve done, for indeed they will have done nothing at that point to have harmed the economy. But it will become inescapably clear that the optimism required to sustain moderate growth and keep the stock market from imploding was vested solely in Donald Trump. Replicating the bullish effects on the markets of his genuine feel-good message lies beyond the reach or even understanding of the Democrats.  If and when it comes, the collapse will be too widespread and too devastating for Trump supporters to take pleasure in it. We can only wish Biden good luck, because he’s going to need it.  Even luck won’t suffice if Biden’s first act as president is to tighten the lockdown, as many on both sides of the political divide expect. He all but promised that “his” vaccine will work better than any cure Trump is capable of delivering. Say what!? If Trump at times seemed boorish, it is with statements such as that that Biden bids fair to one-up him. ________ UPDATE (Nov 11, 3:53 p.m. ET): What a difference a day makes! My headline seems dated already, if not yet wholly irrelevant, following Pfizer’s remarkably timed announcement on Monday of a supposedly 90%-effective vaccine. This was a jack-boot kick in Trump’s face, and it was so brutal that if he weren’t such a tough old buzzard his head would be orbiting the earth right now. Trump may be no more than a week or two from becoming a fallen hero to 70 million Americans, but that will not soften Pfizer’s vicious blow. Reagan was the last president capable of parrying it with good-natured aikido, but Trump, face it, is no Reagan. Meanwhile, my usually reliable sources continue to insist the president will shortly produce ironclad evidence of massive cheating by the Democrats. The sources tell me he actually received 84 million votes and that this will be well documented. Here’s a video claiming with absolute confidence that Trump had a sting in place using blockchain technology to surreptitiously shadow the conventional vote-count. I would have to concede that if Trump did not take such elaborate safeguards after tweeting for months that he knew exactly how the Democrats would cheat, then perhaps he deserves to lose. On the other hand, it seems very much like him to have set this kind of trap. We’ll know soon enough.  But even if our worst suspicions about the election should prove true, we could discover that naked truth is no match for anti-Trump psychosis and the Deep State, especially in a society where decadence and corruption have become so deeply entrenched and widespread.

Joe, Are You Sure You Want the Job?

It looks as though the Democrats will get nearly everything they’ve wanted — except for control of the U.S. Senate. This means that turning the Supreme Court into a rubber stamp for new laws that would radically transform America will likely remain out of their reach for at least the next four years. That’s the good news, but not just for the nearly 70 million voters who supported Trump. Biden’s backers should be relieved as well, since this will spare them the historical notoriety of having trashed the separation of powers merely because they could. The bad news is that, as Obama demonstrated time and again, a president doesn’t need Congress to enact a heavy-handed political agenda. Unfortunately, few expect Biden to be calling the shots for long. His mental acuity and physical stamina are all-too-obviously failing, and while it was possible for the news media to ignore his appalling lapses and gaffes during the campaign, putting him in charge of the most powerful nation on earth is not going to work. We can only pray that when Kamala Harris takes over, which she eventually will, she doesn’t usher in a political Reign of Terror that comports with her take-no-prisoners brand of political extremism. An Unstable Economy The Democrats will soon own America’s future, but they may come to regret it. The stock market is pumped so full of super-heated gas that it makes the Hindenburg look like a birthday balloon.  Unprecedented levels of monetary stimulus have created a dangerously unstable economy dominated by a relative handful of giant, cloud-based companies that will have no jobs for displaced energy workers. There’s also China, an implacable enemy that neither Biden nor his running mate has the guts or experience to confront. No less challenging will be protecting the promising but fragile peace that Trump brokered in the Middle East. Making it more robust will require the kind of deft management and bold leadership that go directly against the grain of a Democratic Party that has never passed up an opportunity to placate Iran or diss Israel. The list of worries stretches on. We should all wish Biden well, of course, even those of us who regard him as a loathsome, corrupt, vaguely creepy political lifer. The world has always been too dangerous for America to ‘lead from behind,’ as Obama would have it, and it is not farfetched to predict that China will test Biden soon after he takes office, possibly by moving troops into Taiwan. Nor is it a stretch to imagine Putin plotting his next act of geopolitical mischief against a proven political numbskull like Biden. Putin must laugh whenever he sees mealy-mouthed Joe acting as though it is Trump who has been the Russian’s bitch.  Memo to Joe: If you get a mysterious package for Christmas containing knee pads, look for a Moscow postmark. Did They Cheat? So, did the Democrats cheat in Pennsylvania, Wisconsin, Michigan and a few other states that mattered? Of course they did. But Trumpers shouldn’t get their hopes too high over Giuliani’s legal challenge. Riots were predicted even if the Orange Man won by a landslide. However, if he should come to regain the electoral lead by overturning ballots in a score of key precincts, what ensues could make last summer’s urban violence seem mild in comparison.  Red-state militias would put a quick and bloody end to it, for sure, if our beleaguered police departments cannot. But civil war is not the kind of endgame that right-thinking Americans should wish for, even if it seems like the only way to arrest the nation’s steepening slide toward full-blown socialism. In the meantime, the half of America that spurned Biden should hope that now that the Democrats have secured a lock-hold on every American institution but the church, there’s no reason for them to rush things. ______ UPDATE (Nov 5, 8:32 p.m): Such interesting times! Although there is no hard evidence yet of voter fraud, the torrent of mail-in ballots marked ‘Biden’ that came in at the 11th hour is certainly suspicious. I’m hoping the New York Piece of Shit Times sends its sharpest sleuth to Michigan to inquire as to why 138,000 votes that came in over a very short period were all for Biden.  That’s right: There was not a single Trump ballot in a truckload of them.  The Times had an explanation that you are not going to believe:  There was an error: an extra zero was tacked on. Oh. So it was only 13,800 mail-in ballots, virtually every one of them for Biden, that were dumped into the sorter? Now I see.

What if the Democrats Get Everything They’ve Wanted?

The map showed up in my email this afternoon, sent by a subscriber who, like me, simply cannot fathom polls that have Biden winning. This poll asked 373,000 people across America who they though their neighbors would vote for. Trump won in every state but Colorado, which has to mean something.  If the many pollsters who have predicted Biden will romp turn out to have been wrong, I distrust the news media enough to assume that the encouraging numbers they provided to him were by design rather than error. Realize that if the major news outlets can fix things so that half of the nation has no clue what the Hunter Biden laptop scandal is all about, then they can easily fudge the results of a half-dozen surveys. I don’t go quite so far, however, as to believe, as one friend does, that the CIA is capable of hacking computers used by Pennsylvania, Texas and a few other key states to tally votes uploaded from the precincts.  I wouldn’t deny that this is theoretically possible, only that the agency has shown the aptitude for staging such a coup without leaving elephant tracks. So what if Biden actually wins? At least half of us are praying it doesn’t come to that. I’ve predicted Trump will bury Biden, but I must concede that this is just a gut feeling. I don’t know anything more than you do, and even the news anchors don’t know enough to make a better guess than you or I.  But if Biden/Harris is our next president, I fear they will wreck much of what has made America great, starting with the Supreme Court. The founders set the third branch of government above politics, but it could not be more clear that the Democrats, vengeful over Amy Coney Barrett’s appointment, would make the court subservient to the Democratic Party.  This would be no small thing, and even Trump’s staunchest foes should be appalled by the idea of it. Some are, just not enough of them. The Worst That Could Happen Would gutting the Constitution affect you or I personally? Undoubtedly, although probably not right away. Or so we should hope. But I shudder to think of how it will change the lives of our children and grandchildren. My first reaction personally would be to try to tune out the news, retreat into a more private life, and focus on family, friends and simple pleasures. Ordinarily, I would assume that the worst a President Harris could do to me personally would be to raise my taxes. Big deal. But she clearly aims to do a whole lot more, and we kid ourselves to think “the rich” that she, Biden, Bernie Sanders et al. have targeted to pay for free…everything are rich enough to keep middle class earners from feeling the pain. Far worse than an amping up of class warfare, if more of it were possible, is that Trump’s over-the-top but genuine optimism about America’s future will be gone, perhaps forever.  His supporters will understand this profoundly from the moment Biden is declared the winner, if he is. It will take Biden supporters a while longer to understand it as well, but it seems inevitable to the rest of us that they will one day feel cursed to have gotten what they wished for.

Why ‘Oracular’ Professor Could Be Wrong

By this time next month we may know who won. Just kidding, sort of. Earlier, I predicted that if Trump wins, endless legal disputes would ensue, along with violence in the streets. However, I also said Trump’s margin of victory would be big enough to allay Wall Street’s anxieties about not having a clear winner.  I still see it that way, although given the heavy tilt of the polls toward Biden, I’d want at least 8-to-1 odds to bet on a big Trump win. A smart guy who thinks otherwise is Allan Lichtman, an American University historian with a supposedly perfect record picking presidential winners since Reagan. He has gotten every race right, we are told, including Trump’s shocking victory over Hillary Clinton in 2016. It would seem that he also predicted the impeachment. Lichtman favors Biden this time, based on 14 ‘keys’ he uses to determine which way notoriously fickle voters will veer. Incumbency is an important ‘key’ for Trump, Lichtman concedes, but the President loses out on too many others. He cites as negatives the Covid-depressed economy and the supposed Russian scandal. In my estimation, the professor has gotten these two ‘keys’ so badly wrong that his credibility should have taken a hit. Instead, he has become a big hit himself, a celebrity on Trump-fearing news shows. Voters Haven’t Forgotten Concerning the two crucial negative keys that favor Biden over Trump, except for those afflicted with Trump Derangement System, most voters do not blame Trump for the spread of the virus, nor for its depressing effects on the economy. Moreover, it beggars belief to suggest that Biden could have done better or could do better in the future. Under Obama/Biden, the economy languished in the weakest recovery of the post-War period. But then Trump, with one hand tied behind his back by a House controlled by the Democrats, raised the economy to record heights, creating enough new jobs to bring unemployment down to record lows, including for blacks and Latinos. Now Lichtman would have us believe voters have forgotten about all this? Yeah, sure. Lichtman has also neglected to take into account a fact unique to this election, to wit: Virtually no one — including even die-hard Democrats — is enthused about Biden. So the question becomes: Is hatred of Trump so extreme and widespread that it will swing the election to an unredeemable schmuck?  Biden is far worse than that, actually, if you consider recent revelations concerning the lucrative business deals he made happen for his not-too-bright son, Hunter. The chip-off-the-old-block’s financial stake in just one Chinese-backed company alone is worth an estimated $50 million. Were you aware there is a Russian partner in this deal as well?  Only if you watch Fox news. News Blackout Will Backfire Another crucial bullet point not on Lichtman’s list of ‘keys’ is the public’s extreme revulsion toward the news media. Of course, we’ve long hated the left-tilting scumbags who invent the news each day. But the Trump years have ratcheted down our respect to abysmal new depths that no one could have imagined before Trump. The prospect of having to listen to the likes of Rachel Maddow gloat for the next five or ten years, or at least until the Republic collapses under three-branch rule by the Democrats, is going to be worth millions of votes to Trump.  Millions more will come from the news media’s recent, brazenly dishonest attempt to black out the Hunter Biden scandal. The fix was in, for sure, but it will not sit well with an American public that demands fair play, even for ‘bad’ guys like the Orange Man. In the meantime, Rick’s Picks has been looking for the stock market to signal a winner before the votes are tallied. So far, there has been little clarity, although it’s obvious that investors have not yet bought into a Biden win. With a wishy-washy, mentally decrepit political weakling like Biden in the White House, that would be tantamount to acknowledging that his running mate’s Marxist tendencies, along with those of the Democratic party, are about to have their day in America, literally with a vengeance.  Despite the polls, I still think Trump will prevail. This is apt to trigger a powerful rally on Wall Street, although I no longer expect it to last very long. Sometime between the election and Trump’s second inauguration the nation will need to confront a Fed-engineered recovery that has been a mile wide but only an inch deep. If the rally comes, we should enjoy it while it lasts, since it could be the last gasp of the extraordinary era of peace and prosperity that Trump helped bring about. _______ UPDATE (Nov 2, 10:17): Election day at last! The huge crowds Trump has been drawing everywhere he speaks contrast sharply with Biden’s funereal whistle stops and the pathetic turnout for Obummer events. We’ll know soon whether Trump’s unprecedented, final-week blitz has helped deliver not just a win, but a BIG win.

Have Plummeting Stocks Sniffed a Biden Win? Here’s a Bullish Explanation…

Stocks have gotten hit hard this week.  Have investors perhaps caught a whiff of a possible Biden victory and the damage he and his socialist running mate would inflict on American businesses and the middle class? That’s one explanation, and I raised the possibility here numerous times over the last several weeks that it could occur, even if it was highly unlikely. In any event, the stock market is a lot smarter than the pollsters, and therefore probably better at predicting Tuesday’s winner. However, Wall Street is also a sleazy carnival midway on a giant scale, and so it can be assumed that regardless of which way shares are moving on a given day, there is a reason for it that suits the needs of the market’s Masters. Covid Lie Helps So why would they want stocks to fall? My theory is that because they are pretty certain Trump is going to be re-elected, they’ve pulled their bids in order to accumulate shares at fire-sale prices. This would position them for the huge rally that is all but certain to follow a Trump victory. Manipulating the markets in this way is especially easy with the news media promoting the lie that Covid-19 has gone out of control.  They’ve hammered this phony story lately because they think it will help defeat Trump. If it scares you, relax — I am still predicting that Trump will win by a landslide, and as for the virus, cases are expanding simply because testing has greatly expanded. Rick’s Picks subscribers will be getting ready for the big rally by laying in some cheap call spreads for spectacular leverage. If you don’t subscribe, click the trial offer button near the top of this page and join the fun. See you in the chat room! _______ UPDATE (Oct 29, 9:11 p.m.): Stocks got traction Thursday after a hard selloff earlier in the week. Expect the market to spend Friday idling quietly, since, polls aside, no one really knows how the election will turn out.  I still see a Trump landslide, but it’s just a gut feeling. I will explain why in commentary that will be out Sunday evening.

Why a Trump Victory Would Set Black Americans Free

Yet another October surprise!  I’m not referring to the rock-solid evidence that surfaced last week linking Sleazy Joe directly to his son’s shady business deals and the huge kickbacks they’ve generated over the years. No, I’m talking about something even more unexpected: It’s becoming cool for African Americans to vote for Trump and to openly support him. Rapper Kanye West started things rolling in April with a full-throated endorsement that caused jaws to drop in the entertainment world. He took a lot of heat for it but stood his ground, contending the Trump had done more for blacks in three short years than the Democrats have accomplished since the Civil Rights Act became law more than 50 years ago.  Although Kanye later decided to run or president himself, his pro-Trump message continued to reverberate in the black community. Now it has emboldened some of the rap world’s biggest stars, including Ice Cube and 50 Cent, to openly declare their support for Trump. After checking out Biden’s tax proposal, the latter reportedly was concerned it would reduce him to 20 Cent. His endorsement, along with a few others that have followed, including most recently from Waka Flocka Flame, have helped push the President’s approval rating among African Americans to 46%, up from 25% just a week ago. This is according to the latest Rasmussen survey, and even if these numbers turn out to have been way off, no one doubts that Trump has picked up a significant number of African American votes since 2016. Undeniable Job Gains Biden’s miserable performance in the second debate, including a half-dozen lapses into senile babble, undoubtedly contributed to the Rasmussen result. But there is something far bigger at work. It began in the streets of Seattle and Portland last summer, when riots aimed at “the Establishment” caused many deaths and billions of dollars in property damage. Both of these cities, like virtually every other big American city in which rioting and looting took place, have been run by machine Democrats for generations. Although the legacy news media tried to downplay this telling fact, it was not lost on black Americans. Nor were pleas by many black city dwellers to increase police protection rather than defund it, as numerous high-profile Democrats are advocating. Into the breach stepped some high-profile rappers. They have become the first super-influencers to openly acknowledge the obvious — i.e., that Trump has done far more for black Americans than any Democratic president — most notably Barack Obama, whose divisive rhetoric set race relations in the U.S. back a hundred years. Post-Obama unemployment among African Americans and Hispanics reached an all-time low before the pandemic hit — respectively, 5.5% and 3.9%. Try as the Democrats and their friends in the news media might, efforts to blame Trump for job losses caused by the pandemic have failed to get traction. GOP’s Urban Innovation Trump didn’t mention it in either of the two debates, but the EnVision program headed by HUD’s Ben Carson is one of the most innovative urban renewal solutions ever attempted. Speaking as a former resident of Atlantic City, where unemployment is close to 50%, I can attest that it is the only plan offered to date that is capable of bringing the slum-ridden town back to life. Ironically, it was a government program hatched by the Democrats that helped destroy the resort in the first place. An 80-acre neighborhood of beautiful but dilapidated 1930s homes was plowed under to prepare for an urban renewal program that never happened. Government red tape tied up the project for so long that the key developers simply walked away. In 1971, one of my first assignments as a fledgling reporter for the Atlantic City Press was a five-part series documenting the myriad failures of Lyndon Johnson’s ‘War on Poverty’. This epic boondoggle was enabled by the Office of Economic Opportunity, and it used the same urban renewal model that helped wreck so many other cities. The Democrats are directly to blame for this, and for blowing an estimated $20 trillion dollars over decades on failed attempts to eliminate poverty. It took Biden’s empty, dishonest boasts about helping African Americans to provoke rappers to set the record straight. Their activist role in the campaign promises to free blacks from the helpless state of dependency Democrats have imposed on them since the Civil War.  It is yet one more reason why Trump is going to win by a landslide.

Dog-Whistling at Marxists Is Not a Winning Strategy

Bulls are straining to hold shares aloft, but we haven’t seen sufficient weakness to infer that the stock market smells a Biden victory. That would be a catastrophe for Wall Street, even if some pundits insist investors might actually prefer him. We now have fake opinions, it would seem, to supplement fake news intended to support Biden. Investors needn’t worry in any event, since there is no credible logic to support polls that show Biden leading comfortably.  It evaporates when you factor in millions of Trump supporters who’d rather not talk about it with Gallup, Quinnipiac et al. Why risk having a fiery jack-o-lantern heaved through your living room window, or getting ‘keyed’ by some Biden partisan who doesn’t agree with your MAGA bumper sticker? The so-called low-propensity voters may not be very visible, but there are assuredly plenty of them out there. They will put Trump comfortably enough over the top to moot the inevitable post-election recounts. Reasons for a Trump Landslide In the meantime, the supposed experts have been combing through election data precinct-by-precinct in a half-dozen populous states, trying to discern a predictive pattern.  Most of these guys couldn’t find a pattern in an Amish quilt. It’s not that hard, guys. Really. Just a few simple assumptions support not merely the prospect of a Trump win, but a Trump landslide. To wit: 1) virtually everyone who voted for Trump in 2016 is going to vote for him again; 2) many millions who didn’t will this time because Trump’s accomplishments have benefited them materially. Most are better off financially than they were under Obama, even with Covid depressing the economy. Aren’t you? 3)  Joe is much more congenial than Hillary, and this will count for something at the ballot box; but 4) it will be more than offset by mounting evidence that he is a crooked politician, that his brain has holes in it, and that he is absolutely bereft of ideas that might improve America. His running mate, Kamala Harris, surely does not lack for ideas. Unfortunately for the Democrats, however, it is Marxists who hear her dog whistle most clearly. Bottom line: It’s still Trump by a landslide. _______ UPDATE (Oct 22, 4:57 p.m. ET): Few expect the debate to move the stock market on Friday, but it can’t hurt to speculate on a possible surprise — especially when the odds are right. We’ve got a bet down with some put options on IWM, a proxy for the Russell 2000.

An Outrageously Bullish Election Scenario

Here’s a stock-market scenario so outrageous that you may want to consider it, especially if you like longshot bets that are underpriced. Everyone is worried the election will produce no clear winner and that it will take months to sort out the results. Since Wall Street hates uncertainty, especially when the nation’s future is at stake, stocks would seem all but certain to plunge, perhaps even more steeply than they did last March. Consumer spending and capital investment would dry up, and America would be cast into an economic slump as severe as the Great Depression. A serious flaw in this sequence of events is that, in point of fact, investors no longer fear uncertainty, no matter how grave. If we needed proof of this, we’ve seen the stock market shrug off a global pandemic and soar as though the U.S. economy faced little more than an outbreak of measles. Whatever the potential long-range effects of Covid-19, portfolio managers have goosed a high-profile handful of mega-cap stocks into the ozone, treating these world-beating monopolists as though they will continue to operate at full-tilt indefinitely. At War With Antifa But here’s the stunner. I’ve written here before that a Biden/Harris victory would be nearly as bad for the U.S. economy — and for America — as a collision with an asteroid. A government that merely talked seriously about implementing some of the loony leftist ideas that surfaced during the campaign would not only put economic growth in eclipse for a generation, it would trigger a secessionist movement capable of destroying the Republic. Red state militias would be at war with Antifa and BLM, and deep-crimson states like Montana, Wyoming and Idaho would stop taking orders from Washington. Fortunately, such chaos is not destined to rule our future because Trump is going to win. I gave a dozen reasons for this in a previous commentary, but if you’re skeptical you need only watch newsclips of the presidential candidates’ campaign rallies to see that Trump’s base is even more fired up than in 2016. Biden’s rallies in comparison have been leaden, reflecting the soul-deadening style and mental confusion of the candidate himself. Amazingly, the pollsters have been predicting a Biden blowout anyway. They probably even believe Adam Schiff’s ridiculous claim over the weekend that the email scandal that has Biden dead to rights was some sort of a Russian smear job. Decent Americans are insulted by such stupid evasions and know better. That’s why they are about to propel Trump to a victory margin so large that investors will be able to look past the recounts, legal wrangling and political mayhem as they bid stocks to spectacular new heights. Oddsmakers Have It Wrong Vegas odds are currently at 2:1 against Trump, suggesting that news media’s Goebbelsian campaign to portray Biden as an easy winner has succeeded. Our recommendation is to take the bet. The incumbent is running on an extraordinarily successful track record against a candidate who is looking less likeable and less competent every time he appears in public. And less honest. It could not be more obvious that Biden and his family got rich selling access to political power. Granted, Trump didn’t become a billionaire by following the Boy Scout handbook. But anyone he screwed was at least aware of Trump’s ability to get the upper hand not only in business deals, but in his specialty, bankruptcy proceedings. The choice between a hard-nosed businessman who gets things done and a corrupt career politician who doesn’t know what city he’s in, or what office he’s seeking, favors the election of Trump — and not by just a measly few million votes, either. ______ UPDATE (Oct 20, 6:15 p.m.): Trump undoubtedly is picking up support as the news media’s propensity to lie for Biden sinks to depths  few of us could have imagined even a month ago. The press dug in their heels today, doubling down on the ridiculous claim that the email scandal embroiling Biden and his son was a Russian smear. Libtards can pretend to believe this bilge, but no one else does, and that’s going to be a problem for Sleepy Joe on November 3..

Bulls Seem to Be Saying ‘Up Yours!’

I featured a cautionary headline atop this page for the last two days, but they way stocks have been behaving, we all might as well throw caution to the wind. Technical signs looked quite bearish when the week began, and the way certain stocks and index futures were acting gave me to infer they were headed for a nasty fall.  And fall they did, but by mere inches, not feet. In many trading vehicles, including the E-Mini S&Ps and AAPL, each ratcheting move lower was answered with the bullish equivalent of “Up yours!”. The net result is that the downtrend, such as it is, has been well nigh unshortable for anyone not possessing rare patience and brass balls. I hate to break the bad news to all of you permabears, but if three straight days of weakness has pushed the Dow down by only 776 points, the pessimists may as well pack it in. Fortunately, many Rick’s Picks subscribers are already locked and loaded for the inevitable bullish reversal via some way-out-of-the-money AAPL butterfly spreads acquired for just $36 apiece. They have the potential to hit $1000 if the stock catches fire yet again between now and November 20, when the calls expire. Members already cashed out of half of the position for twice what they paid, so there is zero risk in holding what remains. That means that whatever the options sell for at any point henceforth will be pure profit.

Cautionary Signs

The yellow flag is out, since the Nasdaq 100, AAPL and the E-Mini S&Ps have all failed so far to reach their respective Hidden Pivot price objectives on this week’s run-up. In addition, VXX, which tracks short-term S&P 500 volatility, looks primed to turn higher following a withering decline begun more than a month ago. If this proves correct, it would imply that the next move in the underlying index will be down. Rick’s Picks subscribers were able to reef the sails by cashing out half of the bullish AAPL butterfly spreads they’d put on a week earlier for twice their acquisition cost. The position was tied to a $152 rally target that lies 25% above, but my gut feeling is that it will be reached before the options expire on November 20. This is notwithstanding the stock’s fall from a 127.32 peak on Monday to 119.65. We may look to load up on call spreads again if AAPL continues to fall, so subscribers should stay tuned to the chat room for real-time guidance. _______ UPDATE (Oct 14, 8:20 p.m.): Bears seem to struggle even when a preponderance of technical indicators swing their way. They were unable to inflict much damage on Wednesday, but even so, it feels like stocks are breaking down. Accordingly, most of my updates have adopted an outright bearish bias for trading purposes. Check them out if you’re eager to play. Some subscribers have staked out a bearish position using VXX calls, but you’ll need to visit the chat room for details.

Stock Market Still Betting on Trump

With the election campaign headed down the stretch, investors are still betting Trump will win. The Dow Industrials have risen to within striking distance of February’s 29,568 record. Does anyone think this could have occurred if Biden were a shoe-in, as the pollsters would have us believe? More likely is that the Dow would be trading 5000 points lower, on its way to 10,000, if the stock market caught even a whiff of a possible Biden/Harris victory. A few pundits have asserted that Biden is Wall Street’s choice. This claim is so outrageous that no one in America, including Trump’s foes, could possibly believe it.  It holds up only if you think Biden’s path to the White house is certain. Then it would be logical to infer the stock market is not merely comfortable with this outcome, but exuberant about it. In pushing the Wall Street-for-Biden narrative, the mainstream media have wishfully channeled Joseph Goebbels: Repeat a lie often enough and it becomes the truth. Not quite, though, since there is Fox news commentator Tucker Carlson to firmly set the record straight. His nightly show is not only the most-watched news program, it is the most-watched program in cable television. Americans Have Eyes Concerning the pollsters, we wonder whom they’ve been calling. Not us, for sure, nor anyone we know. But we do have more than a few left-leaning friends, including some Berkeley liberals, who will be surreptitiously voting for the incumbent. There are also nearly a half-million blacks, gays, trannies and Latinos who have left video testimonials to Trump on Facebook as part of the #WalkAway Campaign. But the vast majority of Trump supporters, including a significant number of swing voters who can’t stand Trump personally, will be pulling the GOP lever on November 3 simply because they watch the news and see what is going on in America. The summer’s spectacle of nightly urban riots in particular, which the Democrats not only failed to condemn but supported legally and financially, will help put Trump over the top. Dems’ Radioactive Platform I remain confident Trump will win because I do not believe most Americans will choose to support: *  The toxic, patently false narrative that we are a racist nation *  An all-encompassing Green New Deal that Karl Marx would have loved *  The hollowing out of local law enforcement and the criminal justice system *  A Supreme Court with a permanent super-majority of left-wing, activist judges *  A newly emboldened teacher’s union eager to kill charter schools once and for all *  Mandatory sensitivity training for all of us *  Crushing tax increases for the middle class to pay for free everything *  Scorched-earth legislation to punish red states *  The re-regulation of businesses by federal, state and local commissars *  A nauseating, years-long victory celebration by the new media, Hollywood and Whoopi Goldberg Covering Our Bases The polls have got it even more wrong this time than they did in 2016. Millions who plan to vote for Trump aren’t talking about it because they fear censure and the disapproval of even their closest friends. Their votes, along with those of the growing  army of ‘Walk Away’ apostates noted above, should suffice to give Trump a comfortable victory margin. Even so, we are covering our bases with bearish stock-market bets just in case. For detailed suggestions, check out the recording on butterfly spreads that will soon be made available to all Rick’s Picks subscribers. _______ UPDATE (Oct 12, 6:20 p.m.): Here’s a related, feel-good anecdote from the chat room today, with thanks to ‘Formula’ for sharing it: Where we spend weekends at our lake home, it’s on Beaver Lake in the Ozark Mountains of Arkansas. Though we’re on the lake, which is pretty rural and lake people are largely God fearing American patriots that love the outdoors, fishing, hunting, skiing etc. etc. Anyway, the town of Eureka Springs, is the town where we shop, dine, attend Mass etc. The town of Eureka Springs is wildly liberal as it’s a sanctuary city for the LGBTQ scene, has been since the ’70’s. As such, it’s also an arts community which is essentially the same cloth. When leaving church on Sunday mornings, we take the long way home and drive through the city of Eureka which is absolutely jammed with bed and breakfasts that are literally almost every other Victorian home. In driving home over the last 2-3 weeks we’ve noticed that the streets are now being sprinkled with Trump flags which I never thought possible in all my years in Arkansas. What I’m witnessing is amazing, and had you told me four years ago this would happen in Eureka, I would have said NO WAY! Rick, in reading your home page write up today, I believe the red wave is going to be MASSIVE!!

Mashed Potatoes and Jello Lead the Charge

AAPL looks like it will need to pull back to get a running start at $120, where supply is certain to be plentiful.  Freaky Friday could provide an opportunity to do it the easy way – i.e., with short-covering on any kind of news that could be construed as bullish. But it’s hard to imagine what that news might be, given that Biden has been climbing in the polls and stimulus talks are in a muddle. Fed chief  Powell could venture forth and cough into a microphone, but he seems to save his bullets for moments when investors and the news media are stirred up to begin with.  The Russell 2000 is where the excitement has been lately, alas. You could no more build an historic rally on this than you could a fabulous dinner featuring mashed potatoes, salisbury steak and jello.

An L-Shaped Recovery in Our Future?

Let’s see if The Bull Market That Wouldn’t Die can shrug this one off. Trump postponed stimulus talks until at least after the election, causing a 600-point reversal in the Dow Industrials. With no stimulus in sight, all of those would-be dollars from the sky won’t get spent by holiday shoppers.  They are usually unstoppable themselves, although 2020 has seemed likely to produce, from the standpoint of retailers, a k-shaped Christmas. That’s when pandemic-proof upper-middle-class shoppers go all-in on Patek Philippe wristwatches and goose-down comforters while most Americans have to settle for Kohl’s gift cards. If stocks plunge in October, that could flatten the shopping curve somewhat, ringing in the New Year with an L-shaped recovery. _______ UPDATE (Oct 7, 11:41 p.m.): I am on the road until late Thursday but will be monitoring chat room discussion as time permits.

Wall Street Can’t Hide It’s Love for Trump

If stocks plunged Friday on news that Trump had caught the virus, and then began to surge as soon as it looked like he would recover, investors must like the guy, right? Or so it would seem.  The Dow rose almost 500 points on Monday as the President’s doctors prepared to send him home earlier than most of us had anticipated.  Since they are taking no chances, we can confidently conclude he’s in pretty good shape. The maudlin muckrakers who invent the news have been doing their damndest to suggest otherwise, but they’ve only embarrassed themselves with an effusion of ignorance and cant.  Much of it centered on the claim that Trump’s doctors misled them or withheld important details about his treatment, but it is only in the staunchest redoubts of Trump Derangement Syndrome that anyone much cared. As for investors, they have yet one more reason to tune out polls that would have us believe Biden will give Trump a good fight. If this were likely, the Dow would be trading 5000 points lower and fixing to plummet anew.

When Even the Smart Money Panics

Wall Street kept its cool Friday on news that President Trump and Melania had contracted the virus. Investors were so cool, in fact, that one might have wondered whether even a collision between Earth and a giant asteroid would shake their confidence in the Fed’s ability to levitate shares indefinitely.  Although we might have expected the stock market to suffer devastation on a day when the nation’s leader has been stricken with a disease that has killed more than a million people, the broad averages instead faked lower, then higher, manipulated by the usual svengalis to extract maximum profits from the rubes and the panic-stricken. Their hysteria lasted less than hour after word of Trump’s contagion crossed the tape just before 1:00 a.m. In a mere 36 minutes the selloff was over: Dow index futures turned sharply following a 600-point plunge and never looked back. Shares see-sawed overnight, but in the minutes before the opening bell they reignited on a manic binge of short-covering, recouping all but 70 points of what had been lost after the news came out. ‘Mild’ Symptoms The president’s symptoms, as well as Melania’s, reportedly were mild, but so were Boris Johnson’s initially when the British Prime Minister fell ill in April. His conditioned worsened after several days and he nearly died.  Trump has proven himself to be hardier than a Seal Rock barnacle, and perhaps that is why investors treated the news as just another buy-the-dip opportunity. But if, heaven forbid, his condition should worsen in the days ahead, the business-as-usual shenanigans and thievery we saw on Friday are going to give way to a selling panic that will shake up even the smart money. We wish Mr. Trump and his wife a speedy and complete recovery in the meantime. If he comes back stronger than ever, perhaps with a little Zen thankfulness in his heart, he will be repeating Reagan’s crowd-pleasing recuperation after being shot and wounded by Jodie Foster fan John Hinckley in 1981.

Do you want up-to-the-minute technical analysis and forecasts for your favorite stocks, commodities, ETFs? Join our Take Request Session on December 1st!

No, I'm not Interested

Do you want up-to-the-minute technical analysis and forecasts for your favorite stocks, commodities, ETFs? Join our Take Request Session on September 15th!

No, I'm not Interested