Pushing the Market Down a Hill

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Good morning, and happy new week to you. Let’s start off with these two peas in a pod:

I put that sophisticated montage you see together because there are, in my opinion, a number of commonalities between Trevor Milton, on the left, and the soon-to-be-incarcerated Ms. Holmes, on the right. Let me preface this by saying that we are in a society in which we are innocent until proven guilty, so anything about these two remains to be merely allegations.

But, still, c’mon.

Anyway:

  1. They were both young, telegenic, and charismatic;
  2. They purported to have created a breakthrough technology which would be in great demand;
  3. They got tremendous investor attention, support, and cash;
  4. They managed to land a giant corporate partner, giving them visibility and credibility (in NKLA’s case, General Motors, and in Theranos’s case Walgreen’s)
  5. They each have a net worth peaking at around $4 billion dollars
  6. Rumors and chatter began bubbling up that the technology wasn’t so real;
  7. Professional naysayers and analysts began taking a harder look, and declared in a firm, loud voice that the company in question was utterly full of shit;
  8. The downfall began.

Of course, the stages of the downfall are different for these two. In the case of Holmes, her $4 billion net worth is closer to a buck-oh-five these days, and she faces the very real prospect of a lengthy prison sentence. Mr. Milton, on the other hand, resigned his post from the clumsily-named Nikola Corporation only hours ago. His company’s stock, the basis for his fortune, hasn’t been doing that well recently:

Indeed, from its laughable peak of about $94, the stock is down approximately 75%. Drawing from my decades of chart analytics, I would say it’s got about 25% to go.

We live in an age of lies. I don’t write about this, due to my pledge not to discuss politics, and I wouldn’t want to incur the wrath of the thousands of people who come to Slope and pay me $0 day after day. I will simply say our culture has become accustomed to a nonstop stream of lies, but when the lies are tied to giant financial frauds, society manages to actually do something about it.

I woke up at 4 a.m. with a feeling of dread, but I was pleased to see the bulls getting pummeled. Of course, that goddamned, should-be-killed-in-front-of-his-family Jerome Powell will do everything in his ghastly power to combat this, in order to serve at the pleasure of a man who might send a nasty tweet about him, so I am never optimistic about these things sticking. But it’s nice to see bulls suffer at least for a little while. It does me good.

On the /RTY, the crucial shelf of support remains. That lower red bar is what we need to watch. Should it fail, the three bears left on planet Earth (that would be me, Baby Bear, and an anonymous Sloper) will prosper. I will, of course, be watching every tick.

The past few months have been hellishly manipulated, even worse than before, so perhaps a crack is starting to show. I ended last week more aggressively positioned than I have been in a long time – – 175% committed – – so let’s cross and fingers and pray for the good fortunes of the three decent people left on the planet, enumerated earlier herein. Oh, and of course, my premium members.

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