Lee AdlerThe Treasury’s funding needs, combined with the end of the Fed’s RRP market support fund, stagnant repo activity, and extreme margin leverage, create a setup that looks like a late-stage bull market. The markets are holding for now, but the pillars are stretched, and the risk of a sharp reversal is rising.
The S&P 500 rebounded from minor support to test the next resistance cluster, but remains locked in a short-term trading range with no clear sign of the next breakout. The rally is still narrowly based, with small caps and cyclical breadth indicators lagging badly.
The attached report has the specifics on what you need to know and to look for for the next big signal.
During the week ended Thursday, August 7, out of 1724 stocks meeting institutional price and volume criteria:
Setups:
259 met major or intermediate trend buy setup criteria, of which 91 triggered short term. But virtually all of these were at the beginning of the weekly period. Few were at low risk entry points by yesterday.
343 met major or intermediate trend sell setup criteria, of which just 1 triggered short term.
Table of picks and charts in subscriber report.
While gold stocks have surged, the metal itself remains rangebound. A daily close above xxxx should trigger a big move. The Cycle Wave Composite has flipped to the buy side, suggesting the onset of an intermediate up phase with projections pointing as high as xxxx. However, it would not take much to abort the rally. A daily close below xxxx would suggest it.
Withholding growth is steady, but nominal strength masks a weaker inflation-adjusted picture. The surge in tariff revenue is already being undermined by plunging corporate tax collections. Outlays are seeing huge increases resulting in larger deficits and more Treasury supply ahead.
This report summarizes and charts the data and tells what to expect in the months ahead.
The market remains in a narrow, liquidity-driven uptrend, fueled by residual cash reserves and dominated by the Mag 7.
The wall was at the top of the liquidity cliff. He dared the market to jump. Today it did. When the market is ready, a catalyst appears. The tariffs, and a weak jobs report lit the match.
Will it have a great fall, or levitate once more?
The wall was at the top of the liquidity cliff. He dared the market to jump. Today it did. When the market is ready, a catalyst appears. The tariffs, and a weak jobs report lit the match.
Will it have a great fall, or levitate once more?
During the week ended Thursday, July 31, out of 1650 stocks meeting institutional price and volume criteria:
Setups:
68 met major or intermediate trend buy setup criteria.
175 met major or intermediate trend sell setup criteria.
Short-term cycles topped out on schedule. They appear to be joined by the 9-12 month cycle, with the 13-week cycle now dormant.
FREE REPORT –
The S&P 500 has rallied relentlessly to all time highs for 3 months. A broad based bull? Nope. Mostly Mag 7. Or rather, Towering Two.
Here’s a graphical essay that speaks for itself.
Screen results this week finally reversed the recent string of small losses as I continued to utilize weekly charts and signals to select picks, as opposed to using triggers from only the most recent day.