It’s Do-or-Die for the Bulls...

These trends could set the tone for the rest of 2023. [Morning Reckoning] February 28, 2023 [WEBSITE]( | [UNSUBSCRIBE]( [Ed. note: Important housekeeping note: Your emails are now coming from a new email address: dr@mb.paradigmpressgroup.com. Ensure delivery of every email in your subscription by following [these simple whitelisting instructions.]( It’s Do-or-Die for the Bulls… Baltimore, Maryland February 28, 2023 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, The toughest part of any new bull market is the beginning. Traders usually refer to these early-stage moves as disbelief rallies for obvious reasons. During a bear market’s last gasps, buyers are bled dry. Fear of missing out has sucked them into every relief rally, only to trap them in their snapback plays when everything begins to fall apart. The bulls are mentally exhausted – and many simply give up on the markets altogether. Then, when a rally does finally stick, the market’s cried wolf so many times that most investors simply don't trust the move. They opt to sit on the sidelines and lick their wounds, angrily watching the market move higher without them. Every new bull has to start somewhere. Trouble is, we only know it’s a new bull market in hindsight. As we watch it unfold in real time, that first bounce might not be the beginning at all – just a pause before the next leg lower begins. This is the exact situation we find ourselves in today. Two months of 2023 are nearly in the books. A powerful snapback rally materialized out of nowhere in early January, sending the bears running for cover and rekindling a flicker of hope amongst the tech-growth bagholders. The theme for January was simple: the worst performing assets of 2022 flipped the script and enjoyed the strongest rallies. Meanwhile, the “safer” trades that weathered last year’s storm began to lag. It was just like old times. The Covid Bubble was back! February was the opposite story. These same snapback trades started to fall apart while the dollar index and rates rallied. Investors suffered from debilitating inflation flashbacks as the Fed flipped slightly more hawkish. Now, we’re watching key stocks and sectors teeter at key levels. Here comes the tricky part… [A $557 credit has been applied to your account.]( [Please click here to learn how to claim it.]( — Customer Service, Paradigm Press [LEARN MORE]( Are we experiencing the choppy start of a new bull market? Or, was January’s strong performance just a bear market rally that’s destined to fail and open the trap door to new lows? We can’t know for sure (You didn’t think it was going to be that easy, did you?). But there are a couple key areas of the market we can watch for clues. The Semi Situation While the financial talking heads remain fixated on the S&P’s battle at 4,000, we need to dig a bit deeper to see if the year-to-date leaders can rediscover their January mojo. Let’s start with semiconductors. The semis were downright terrible trades on the long side during the 2022 bear market. But they snapped back to life in January, with the VanEck Vectors Semiconductor ETF (SMH) gaining more than 20% during the first five weeks of the year. Like many of these snapback stocks, the semis flew a little too close to the sun in January and needed to blow off some steam. Where they go from here could be incredibly important to the health of this market. [chart] SMH is flirting with a key level here between $240 - $250. This area marks the swing highs from June and August 2022. If it can continue to consolidate and rally off last week’s lows, it has a decent chance at extending higher and officially breaking out of last year’s downtrend. NVDA’s post-earnings performance is one major reason SMH still has a fighting chance right now. Despite posting objectively poor earnings, NVDA managed to tantalize analysts and investors with some artificial intelligence hocus-pocus. The magic worked, and the stock popped more than 14% power-earnings. It continues to rally to new 9-month highs this week. NVDA is still the de-facto leader in the semiconductor sector. It’s difficult to imagine the sector lurching lower if this leader remains resilient. [Biden to Replace US Dollar?]( [Click here to learn more]( Thanks to President Biden’s Executive Order 14067, a former advisor to the CIA and Pentagon predicts the 3rd Great Dollar Quake has begun. The first was Roosevelt confiscating private gold in 1934. The second was Nixon abandoning the gold standard in 1971. Now, Biden’s plan could pave the way for “retiring” the US dollar. Your dollars could soon be confiscated – or made worthless. [Click here to see how to save your investment and retirement accounts](. [LEARN MORE]( An AI-Driven Market Crash? The snapback semis can certainly stabilize the market at these key levels. But what about some of the market’s frothier, more speculative stocks? Here’s a funny story from the artificial intelligence bubble: Some rogue AI testers managed to (briefly) break through ChatGPT’s politically correct protocol to get some raw, unfiltered answers from the popular chatbot. As a rule, ChatGPT won’t tread in any waters anyone might find mildly controversial. [I even highlighted the bland, unhelpful answers to my AI bubble questions when I dove down the rabbit hole a few weeks ago…]( Thankfully, some financially-minded journalists agreed and snapped ChatGPT out of its PC stupor long enough to get it to make some bold (or maybe ridiculous?) stock market predictions. After inquiring about a possible market crash, the uncensored AI didn’t hold back, predicting a crash on March 15 due to inflation, consumer spending and geopolitical tensions. To be clear, I don’t think ChatGPT is Skynet. Not even close! And I’d be more than a little surprised if the market crashed on something as benign as “consumer spending” on the Ides of March. Crash predictions aside, it’s important to keep an eye on these bubbly artificial intelligence stocks that have suddenly captured the market’s attention this year. This has nothing to do with fundamentals or bigger tech trends, either. I’m more concerned about using the AI sector as a proxy to measure bullish sentiment. If some of the speculative runners – such as C3.ai Inc. (AI) – can move higher out of these wide-ranging consolidations, it will demonstrate that traders are willing to continue to make risky speculations despite a shaky market backdrop. [chart] One of the big dangers facing a young market rally is fickle buyers who give up and sell their shares at the first sign of trouble. If we begin to see stocks weather these pullbacks and push higher, it shows us that something could be changing in the markets. There’s still a lot that needs to go right before we can begin to talk about the market officially recovering from the big, bad bear. Yet the bulls surviving this first true test of the year would go a long way toward repairing the damage – and could set us up for an extended push off these do-or-die levels. Let me know what you thought of today’s article… and if you want any more topics covered by emailing me [here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Has World War III Just Begun?]( NATO sends tanks to Ukraine… Russia prepares for a winter offensive… [Is the beginning of World War III?]( [Click here to learn more]( I’ve just released an urgent message with my thoughts. But more importantly, I’m offering to send you an [exact playbook]( on what I see playing out in the world and what you need to do to prepare. [Simply click here now to watch my short message and to see how to claim a copy completely free of charge.]( [LEARN MORE]( In Case You Missed It… Sean Ring, Editor The Lesser Rewriters of Greater Authors [Sean Ring] SEAN RING Hello Reader, Good morning on this fine Thursday. I bring news from my other adopted country, the United Kingdom. You may know I lived in London for nearly ten years and consider myself a cultural Anglophile. (But not a political one; the British polity lost the plot ages ago.) The UK is the home of European Woke, especially London. If you think Prince Harry (that ginger idiot) is a one-off, you’d be wrong. He was just easy pickings for a C-list actress with ambition. England suffers from what I call “Empire Regret.” It obnoxiously bends the knee to any group, whether they’re rightly offended or not. In short, it presents solutions to problems that don’t exist. So this insane happening fits right in with the demolition of once great British values. Let me explain… [Urgent Notice From Paradigm CIO Zach Scheidt!]( [Click here to learn more]( Hi, Zach Scheidt here… I’m the Chief Income Officer at Paradigm Press. With inflation raging (and showing no signs of coming to an end any time soon), almost everyone in America is feeling the pain in a big way. Which is why, several months ago, I set out on a big mission… my goal was to create a [complete, step-by-step plan to surviving and beating inflation]( one that anyone could take advantage of. Today, after hundreds of hours of research, I’m revealing all of my findings. [Simply click here now to see how to survive America’s deadly inflation crisis](. [LEARN MORE]( “Put it back on the wall.” Old London Business School classmates Aussie Trav, English Will, and The Yank (that’s me) decided to take a weekend trip to Oslo in 2004, two years after we graduated. We had flown from London, hopping the North Sea, and landing in Oslo on a Friday night. It was late August. Oslo is gorgeous, pleasant, and temperate at that time of year. We loved it. We couldn't believe how expensive beer was, though. It was 10 – that’s British pounds, not dollars – for a drink that was smaller than a pint. But I must say… we didn't care! We decided to live it up a little bit and enjoyed wonderful nights out on the town. To excess, per usual. So Sunday, before we were due to leave, we decided to walk around the museums to get rid of our hangovers – looking at pretty paintings at least lessens the thumping in your head. There I was, staring at The Scream by Edvard Munch. Honestly, I wasn’t all that impressed… just a couple of swirls of paint. But then I received a fateful text message. In those days, texts came in on my trusty Nokia. My buddy, Malcolm, wrote from London: "Put it back on the wall." I thought nothing of it as I was wandering around aimlessly in the museum, trying to get rid of my headache. We left Oslo that night. The following day, I had to get up early to go to work. On the Tube, I read that morning’s newspaper. And as I was thumbing through it, one headline read “The Scream Stolen in Oslo.” I was shocked. I was standing right in front of it! Suddenly, Malcolm's text made sense. At the time, I didn’t know there were four Screams in existence; Munch had painted two and did two of them in pastel. That Sunday, armed robbers stole the version in the Munch Museum as I stared at another one in the National Museum! I often think of what I’d have done if the pilferers tried to take the one I was looking at. If I close my eyes, I can still feel that hangover. I’d like to think I was in such a bad mood, I would’ve beaten the stuffing out of them. But who knows? The real question I’ve always had for these people is, “Who the f*ck do you think you are?” Before I expand on that, let me give you some advice on collecting that some smart old men gave me. Umberto Eco’s Antilibrary, by Nassim Taleb There’s nothing I love more than strolling around old bookshops. In Europe, there are some that’ve been around for hundreds of years. Whether it’s Shakespeare and Company in Paris, Hatchard’s in London, or Libreria Luxembourg in Turin, there’s nothing that connects me with the past better than they do. I always try to buy something whenever I go. I feel it’s partly my responsibility to spend the money to best make sure those book stores remain open. Of course, that’s led me to accumulate quite a library, most of which is still in Cebu waiting for us to ship to Italy. I haven’t read all the books. But luckily, the polymath and philosopher Nassim Taleb gave me some fantastic confirmation bias in his classic, The Black Swan: The writer Umberto Eco belongs to that small class of scholars who are encyclopedic, insightful, and nondull. He is the owner of a large personal library (containing thirty thousand books), and separates visitors into two categories: those who react with “Wow! Signore professore dottore Eco, what a library you have! How many of these books have you read?” and the others — a very small minority — who get the point that a private library is not an ego-boosting appendage but a research tool. Here's the important part: Read books are far less valuable than unread ones. The library should contain as much of what you do not know as your financial means, mortgage rates, and the currently tight real-estate market allows you to put there. You will accumulate more knowledge and more books as you grow older, and the growing number of unread books on the shelves will look at you menacingly. Indeed, the more you know, the larger the rows of unread books. Let us call this collection of unread books an antilibrary. Oh, I was never going to stop buying books. But from the time I read that, I’ve never felt guilty for leaving them on the shelf. Roaming Around Ayala Cebu Alas, the Philippines doesn’t have as many old bookshops. So when I was roaming the National Bookstore as a new father, I was thrilled to find a complete set of Roald Dahl books. I bought the lot of them, though I knew it’d be years until Micah could read them. I’d simply add them to our antilibrary, waiting for the right moment to get Micah to pick them up and read. Unbeknownst to me, there was a far more important reason to stock up on Old Dahl. [Crypto Legend Reveals: “The Next Bitcoin”]( He called Bitcoin at $61. Now he says this next crypto will be even bigger. In fact, he’s targeting 25X gains over the next year alone. [>>Click here now for the details]( [LEARN MORE]( How Dare You? The Daily Telegraph broke the story with the headline “The Rewriting of Roald Dahl.” I thought it was a joke. But according to [The New York Post]( “Words matter,” begins the notice at the bottom of the copyright page of Puffin’s latest editions of Roald Dahl’s books. “The wonderful words of Roald Dahl can transport you to different worlds and introduce you to the most marvelous characters. This book was written many years ago, and so we regularly review the language to ensure that it can continue to be enjoyed by all today.” Perhaps because I write, I find it more offensive. Or maybe because I live within spitting distance of objet d’art, which I wouldn’t even touch with gloves on. It’s not theirs to change, regardless of intellectual property laws. And I can’t imagine Dahl, were he alive, would have agreed with this. [The Telegraph]( followed up with an article today where Puffin, a publisher with whom I will never deal, stated they have a “significant responsibility” to protect young readers. No, you don’t. You have a responsibility to get your merchandise out, unspoiled. I’d prefer they be honest and say, “Well, we think we’ll lose business keeping the old language, so we’re trying this out.” Loathsome though it is, it’s still better than dressing this absurd censorship up as a caring activity. As HL Mencken once said, “The urge to save humanity is almost always only a false face for the urge to rule it. Power is what all messiahs really seek: not the chance to serve. This is true even of the pious brethren who carry the gospel to foreign parts.” Here are some of the changes, courtesy of the [National Review]( In the original James and the Giant Peach, a character rhymes, “Aunt Sponge was terrifically fat / And tremendously flabby at that,” and, “Aunt Spiker was thin as a wire / And dry as a bone, only drier.” With the new changes, the old verses now read: “Aunt Sponge was a nasty old brute / And deserved to be squashed by the fruit,” and, “Aunt Spiker was much of the same / And deserves half of the blame.” The famous glutton Augustus Gloop in Charlie and the Chocolate Factory is no longer introduced as “fat” but rather as “enormous.” In The Twits, Mrs. Twit used to be described as “ugly and beastly” but is now only “beastly.” Gendered references have also been weakened so as not to be deemed offensive to women or the transgender community. In The Witches, a section musing that witches are bald beneath their wigs has the new disclaimer: “There are plenty of other reasons why women might wear wigs and there is certainly nothing wrong with that.” Matilda‘s Miss Trunchbull, the ferocious fictional headmistress of a school, formerly a “most formidable female” is now a “most formidable woman.” In Charlie and the Chocolate Factory, Oompa Loompas, once called “small men,” are now “small people”. The Cloud-Men in James and the Giant Peach are now Cloud-People. Prose that might be tangentially misconstrued as being culturally insensitive also appears to have been removed. In The BFG, the main character giant no longer wears a “black” coat and characters don’t turn “white with fear” anymore. I’m turning red with rage! You Can’t Even Blame the Government The worst part is that His Majesty’s Government slammed the changes. I can’t even blame the State! Puffin and the Roald Dahl Story Company worked with some company called Inclusive Minds, which is dedicated to “inclusion and accessibility in children’s literature.” How about we get the kids to actually read first? There’s nothing more regrettable than private censorship. Theseus’ Ship Am I being paranoid? I don’t think so. Let’s talk about Theseus' Ship. From The Life of Theseus by Plutarch, via [Britannica]( The ship wherein Theseus…returned [from Crete] had thirty oars, and was preserved by the Athenians down even to the time of Demetrius Phalereus [died c. 280 BCE], for they took away the old planks as they decayed, putting in new and stronger timber in their place, insomuch that this ship became a standing example among the philosophers, for the logical question as to things that grow; one side holding that the ship remained the same, and the other contending that it was not the same. If you replace enough of Dahl’s words, when do the works cease to be Dahl’s? That’s why I am so thrilled the reaction to this incredible breach of trust has been nothing short of nuclear. It seems both the left and the right are outraged. And that’s an excellent thing. As for me, I’m so glad I bought Micah’s copies before they violated Dahl’s works. He’ll get the farm-fresh, free range, organic Dahl… as all children should. Oh, and the stolen version of The Scream found its way back home in 2009. For all to see, for the price of a ticket to Oslo. If you have any feedback or topics you want covered, be sure to click [here](mailto:feedback@dailyreckoning.com) and drop me a line. Until next week! All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. 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