Lee AdlerDespite new short-term highs, the S&P’s rally remains precarious and thin. Divergences across indices, failing cycle thrust, and deteriorating cycle breadth indicate a market under internal stress. The market has arrived at the precipice of the liquidity cliff.
Gold’s technical picture shows mixed cycles as the price tests long term trend support. The latest analysis reveals key cycle confluences that should drive the next major move. Four mining picks are listed for the next swing.
All but a couple of shorts on the list were closed last week and none were added this week because the screens identified no good short-term setups.
The liquidity cliff has been delayed as the US Treasury has not moved with its usual speed when the debt ceiling is lifted. It must restore accounts that it has raided under “extraordinary measures” to stay under the previous debt limit. And it normally moves to rebuild the Treasury account (TGA) to its target level, announced at the quarterly refunding announcement. In this case that’s $850 billion.
The liquidity cliff has been delayed as the US Treasury has not moved with its usual speed when the debt ceiling is lifted. It must restore accounts that it has raided under “extraordinary measures” to stay under the previous debt limit. And it normally moves to rebuild the Treasury account (TGA) to its target level, announced at the quarterly refunding announcement. In this case that’s $850 billion.
Short-term cycle corrective phases have begun just as the market approaches critical resistance. Sell signals are multiplying. The uptrend remains intact — but it may not survive another bad day or two.
Gold’s technical picture shows short-term cycles completing their bottoming process and aligning with longer-term upward momentum. The latest analysis reveals key cycle confluences that should drive the next major move. Multiple timeframes are getting in gear. I have chosen four mining stocks that look well positioned to take advantage of the next rally.
All but a couple of shorts on the list were closed last week and none were added this week because the screens identified no good short-term setups.
The S&P 500’s vertical meltup paused at a key regression channel centerline, as Monday’s downtick now threatens to become a reversal. Short-term cycles are peaking, the six-month cycle remains on a sell signal, and long-term projections face major internal conflict. The Cycle Wave Composite has reached levels that marked previous tops. Breadth is weakening. If xxxx breaks, it would confirm a major top.
Here are the specifics on what you need to know and to look for.
The Technical Trader Market Update will be posted on Tuesday again this week. I had intended to return to regular weekend or Monday morning postings…
The cliff came early. I had projected August under the assumption of politics as usual. That assumption was wrong. Politics no longer works the way it used to, i.e., under a system of checks and balances. The one-party state lifted the debt ceiling by $5 trillion in the context of the rump BBB bill through Congress and the President signed it into law, without the usual down-to-the-wire Kabuki theater. Instead, we now have strongman theater.
We need to get used to that. Although that does not mean that future policy enactment will be any more predictable.
So now we have to ask. Will markets rise?
Can pigs fly?
Here’s the answer.
Gold’s technical picture is shifting as short-term cycles complete their bottoming process and align with longer-term upward momentum. After weeks of mixed signals where geopolitical events clashed with traditional cycle patterns, the latest analysis reveals key cycle confluences that could drive the next major move. With critical resistance levels approaching and multiple timeframes showing coordination, gold traders are watching for definitive breakout signals that would confirm the next phase of the precious metals rally.