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Don’t Get Burned by the Turn

I have always been reluctant to post midweek updates. Last week’s market action was a perfect example why. We had the beginning of a crash. I responded, and immediately reversed. We know why it reversed. All that cash that the Fed and Treasury poured into the market last week worked its magic. I assuredly do not know what caused it to start on a crash path however. That history is yet to be written.

Meanwhile, I will try to cut through noise and focus on the message of the technical indicators. We had a confusing little detour last week. I need to stay focused on the direction, even if a solar flare knocks out the GPS from time to time.

Cycles now appear to be opposed, with no coherent structure to support a breakout. The 10-12 month and 6 month cycles appear to be topping out. The 13 week cycle is still in a flat down phase. The short term cycles have probably bottomed.

Cycle projections for the 10-12 month cycle now point to xxxx (subscribers only), suggesting xxxx. There are no projections for shorter cycles.

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Cycle time projections point to a final top to occur in xxxx (subscribers only).

The third rail chart did not break its intermediate uptrend in the selloff. Resistance is at xxxx (subscribers only) subscribers on Monday, rising to xxxx (subscribers only) on Friday. If broken, the initial target zone would be xxxx (subscribers only).

On the weekly chart, the market recovered to close above a long term trendline now at xxxx. The uptrend remains intact.

On the monthly chart, May began with trend support at xxxx, and resistance at roughly xxxx (subscribers). The long term cycle momentum indicator is xxxx (subscribers).

Cycle screening measures weakened. The short term pattern suggests more upside. The intermediate term outlook is xxxx (subscribers).

The chart pick list had an average gain of 2.1% with an average holding period of 8 calendar days last week.

For the week as a whole, there were 224 buy signals and 125 sells, a spread of +99. That compares with 168 buys and 96 sells, a spread of +72, the week before. It was as if the vicious mid-week selloff never happened. But it happened to the chart pick list. 10 picks were stopped out, including both directions  I added 8 buys to the list this week, bringing it to 14 longs, no shorts.  That report is published here. (subscribers)

Technical Trader subscribers click here to download the report.

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These reports are not investment advice. They are for informational purposes, intended for an audience of investment and trading professionals, and other experienced investors and traders. Chart pick performance changes week to week and past performance may not indicate future results, as you know. Trading involves risk, and these reports assume that you understand those risks and manage them according to your tolerance. 

Posted in 2 - Technical Trader
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