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Author: Lee Adler

The Trend Was the Bears’ Friend

A couple of weeks ago the market averages came right to long term downtrend lines from the January peak. At that point, there were multiple signs that the rally would continue. We considered all the “what ifs,” including the one that entailed stopping dead at the trendlines and reversing. That seemed unlikely. But it’s what happened. It reaffirms the bear market for now. Now the cycle setups and conventional technical analysis indicate that there’s xxxxxx xxxxxxx xxxxxxx xx xxxxxx for this downturn to xxxxxxx.

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Cycles– Both the 6 month and 10-12 month cycles now appear to be xxxxx xxxxxxxx. The 13 week cycle appears to have the potential for xxxxxx xxxxxx. There are no projections yet but the cycle low is not ideally due until xxxxxxxx xxxxxxxx. That’s plenty xxx xxx xx more xxxxxxxxx to develop after short term cycles finish an up cycle due between xxxxx and xxxx xxxx xxxx. Non subscribers click here to access.

Short term cycle lows are due xxx xxxx. Non subscribers click here to access.

Third Rail – The S&P 500 is now within a short term downtrend channel whose lower line starts this week at xxxx and drops by xxx points per day (PPD) to end the week around xxxx. The centerline now represents resistance. It drops from xxxx to approximately xxxx this week.

Should the S&P drop below xxxx early in the week, it would suggest a possible crash. The most significant support would be in the xxxx xxxxxx range. The next target below that would be xxxx. Non subscribers click here to access.

Long Term Weekly Chart – Last week’s selloff miraculously preserved the long term downtrend channels. Long term and 3-4 year cycle indicators are on the verge of xxxx xxxxxx xxxxxx. Failed signals are normally strong trend continuation indicators. In this case, they would xxxxxx xxxxxxxx xxxxxxx. Non subscribers click here to access.

Monthly Chart  – The S&P turned down right at the long term downtrend channel line on the monthly chart. Long term momentum is back on the cusp of xxxxxxxx xxxxx xxxxxxxx xxxx xxxxxx a secular bear market if it happens. Non subscribers click here to access.

Cycle Screening Measures – The aggregate indicator remains short term xxxxxxxx and is near xxxxxxx intermediate term. The indications suggest a 13 week cycle xxxx xxxxxx and 6 month cycle xxxxxxxx. Non subscribers click here to access.

Technical Trader subscribers click here to download the complete 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. 

Swing Trade Screen Picks – Short Stops Killed but Many More Added

By now you are well aware how much I hate stops. As a result, I had evolved a strategy of foregoing stops in the first week chart picks were placed on the swing trade list. Last week, my instincts told me to break that “rule,” and place stops on new picks both long and short.

Technical Trader subscribers click here to download the complete report.

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My instincts stunk, but miracle of miracles, the list is still ahead for the month of December. And I have come up with a strategy to maintain profitability and, at the same time, cope with the market’s increasing intraday violence.

Subscription Plans

The strategy and tactics opinions expressed in this report illustrate one particular approach to trading. No representation is made that it is the best approach, or even suitable for any particular investor. This is a developmental and experimental exercise, for the purpose of providing experienced chart traders with ideas and concepts to use or not use as they see fit. 

Nothing in this letter is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical. The method behind these picks is experimental, and may change over time.  I may trade my own account, and may buy, sell, sell short or cover short, or have positions in any of the stocks on the list at any time, based on a particular trading style that is unique to me. My entry and close out levels are likely to differ from those published due to the exigencies of my trading style and time constraints. I post these items in good faith for informational and educational purposes, and do not take positions in opposition to those which are published. All chart picks are actively traded stocks, and I assume that no subscriber to these reports, nor the total of all subscribers taking positions, would do so in a size that would influence the market price. 

Performance tracking assumes 100% cash basis, no margin, no options. You should not assume that recent performance as reported can or will be repeated in the future. Trading involves risk of loss. In the case of options, the loss can be 100% of the amount invested. When leverage is used the loss can exceed the account equity under certain conditions.

The opinions expressed here assume that readers are experienced investors or are working with an investment advisor.

May Gold Be Merciful Unto Us, Amen

The metal is acting better than the miners, but that’s not saying much. Here’s what we have to look out for as a sign that things are about to get much worse. Also, what would signal a better outlook.

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The strategy and tactics suggestions in this report are informational and general in nature, and illustrative of one approach. They are not investment advice. No representation is made that it is the best approach, will be profitable, or even suitable for any particular investor.

Nothing in this letter is meant as personalized investment advice and you should not construe it as such. Trading involves risk of loss, and in the case of options, the loss can be 100% of the amount invested. Any trading that you do with reference to strategies and tactics suggested in this report should be done only after consulting with your financial adviser. Trade at your own risk. 

Fed Steadfast But Treasury Throws a Bullish Curve

I have long operated on the assumption that the US Treasury will follow the TBAC issuance forecast, with exceptions only in obvious emergencies. That assumption was well supported by the facts, over the many years that I’ve tracked this. That changed this month.

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The Treasury has thrown a curve by suddenly reversing from the scheduled issuance forecast for T-bills to a program of big T-bill paydowns. That started about a week ago, and so far it’s set to continue for at least another week. It has already pumped cash into the accounts of holders of expiring T-bill, and will pump in even more over the next week. That money then goes mostly into the Fed’s RRPs, but some also fans out into other markets. Non subscribers, click here to read this report.

This has all come as a surprise, and there’s no indication of when it will end. One thing is certain. It will end, because the Treasury is rapidly drawing down its cash with these paydowns. The Treasury has heavy outlays in February, and it will need to have a big pile of cash on hand next summer when the next debt ceiling problem rears its ugly head. Non subscribers, click here to read this report.

But while it still has cash and the will to support the markets, it will do so. That will allow the markets to continue these incredible monster bounces that we’ve seen of late. Trending higher, however, is another story. Non subscribers, click here to read this report.

Are the bounces playable? I would not get sucked into the idea that this is some kind of bullish reversal. It’s manipulation. It’s short term. Without the Fed pitching in, it’s not sustainable. Non subscribers, click here to read this report.

So when will the Fed pitch in? This report gives the answer and tells what to do about it.  Non subscribers, click here to read this report.

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Swing Trade Screen Picks – 4 More Shorts. 4 More Shorts

For the week ended December 9, there were 36 charts with second or third buy signals as the week ended, and 52 with second or third sells. Interestingly, 7 of the sells were fixed income ETFs. I take that as a sign that the bond rally is probably finished. Which in the world of tight liquidity isn’t such great news for stocks either.

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The residual momentum of the 174 to 18 win for the buy side 4 weeks ago was finally exhausted last week. There was a modest bulge in sell signals on Monday that was the extinguisher. That subsided later in the week, but it set a tone. 12/2/22 Often the results of such surges don’t begin to show up until the second week after the bulge in signals. Without any in-depth statistical analysis, my sense is that a signal surge like this has a shelf life of 3-4 weeks. Consequently, I think that time is up on this rally. Non-subscribers click here for access.

In my visual review of the screen output this week I leaned toward giving the benefit of the doubt to the sell side but I did find one interesting buy which I added to the list, as shown on the table below.
At the same time, I found 4 that I liked on the sell side, and added those as shorts. This week I elected to go with post entry protective stops for the new picks. Non-subscribers click here for access.

All previously open picks and those closed out last week are shown on the table below (subscriber version). After adding the new picks, there will be 4 buys and 12 shorts. Non-subscribers click here for access.

For the week, performance was positive, with an average gain of 3.7% on an average holding period of 13 calendar days. This was an improvement on last week’s +2.5% on a 2 week average holding period. Non-subscribers click here for access

Technical Trader subscribers click here to download the complete report.

Subscription Plans

The strategy and tactics opinions expressed in this report illustrate one particular approach to trading. No representation is made that it is the best approach, or even suitable for any particular investor. This is a developmental and experimental exercise, for the purpose of providing experienced chart traders with ideas and concepts to use or not use as they see fit. 

Nothing in this letter is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical. The method behind these picks is experimental, and may change over time.  I may trade my own account, and may buy, sell, sell short or cover short, or have positions in any of the stocks on the list at any time, based on a particular trading style that is unique to me. My entry and close out levels are likely to differ from those published due to the exigencies of my trading style and time constraints. I post these items in good faith for informational and educational purposes, and do not take positions in opposition to those which are published. All chart picks are actively traded stocks, and I assume that no subscriber to these reports, nor the total of all subscribers taking positions, would do so in a size that would influence the market price. 

Performance tracking assumes 100% cash basis, no margin, no options. You should not assume that recent performance as reported can or will be repeated in the future. Trading involves risk of loss. In the case of options, the loss can be 100% of the amount invested. When leverage is used the loss can exceed the account equity under certain conditions.

The opinions expressed here assume that readers are experienced investors or are working with an investment advisor.

Limited Supplies Delivered At Bear Custard’s Last Stand

The major cycle technical bear case gets to live another day this week. I drew the parameters of the line in the sand last week, and the bulls didn’t cross it. But the bears didn’t win outright either. They need to hold the line this week to continue what may be the onset of a 6 month cycle top process.

Technical Trader subscribers click here to download the complete report.

Non subscribers click here to access.

Cycles-   There are hints of a downturn here but up phases in the two longer cycles could xxxx xxx xxx xxxx xxxx. The 6 month and 10-12 month cycle tops are due xxxxxxx xxxxx xxxxxxxx xxx x xxxxx xxxxxx. Cycle projections remain in the xxxx-xxxx range, implying that the rally will xxxx xxxx xxxx xxxx .Non subscribers click here to access.

Short term cycles are mixed but the 6-7 week cycle was xxxxxxx xxxxxx xxxxxxx , so I’m wary of xx xxx xxxxxxxxxx xxxx. Non subscribers click here to access.

Third Rail – A weekly close above xxxx this week would break the sharp downtrend from last week. However, weakness on Monday would suggest xxxxxxxxxxx xxxxxxxxx. A daily close below xxxx would imply a measured move target of xxxx. Non subscribers click here to access.

If they manage to break out of the downtrend channel, there’s a big resistance cluster around xxxx-xxxx. If cleared, it would open the likelihood of upside to xxxx-xxxx. Non subscribers click here to access.

Long Term Weekly Chart –  Last week’s pullback kept the bearish case alive but the S&P still needs to stay below xxxx or xxxx at most, to keep the long term downtrend intact. If it’s broken to the upside, that and other long term indicators could signal the end of the bear market. Non subscribers click here to access.

Monthly Chart –   12/4/22 The rally needs to end December below xxxx, or the bear case will be in trouble, at least in the short run. Clearing that level would imply a target of the trendline at xxxx or the xxxx xxxx of xxxx.  Non subscribers click here to access.

Cycle Screening Measures –  The aggregate indicator is now short term xxxx, but the intermediate term not so much. The indicators suggest, but don’t yet confirm, that the 6 month cycle has xxxx xxxx xxxx xxxx. They allow for taking xxxx positions, but with protective stops just in case this 6 month cycle xxxx xxxx gets a xxxxxxxx xxxxxxx xxxxxxx topping out. Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

Not a subscriber? Get price and time targets, and weekly swing trade chart picks, risk free for 90 days! 

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. 

Gold Hones In On New High Projections

Gold is consolidating within a 9-12 month cycle up phase. The projected high is due between xxx and xxxxx xx, with the projection currently honing in on xxxx.

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The final numbers from the swing trade pick screens over the past week resulted in 21 final buys to just 17 final sell. Not overwhelming like the two previous weeks, but still a buy side edge.

As usual, I reviewed the 21 charts with short term buy signals. I saw a lot of tired looking uptrends near resistance, with waning momentum. It wasn’t inspiring. So I adjusted the stops on the 3 remaining picks and added one more, just in case I was missing something bullish.

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Try Lee Adler’s Gold Trader risk free for 90 days!

The strategy and tactics suggestions in this report are informational and general in nature, and illustrative of one approach. They are not investment advice. No representation is made that it is the best approach, will be profitable, or even suitable for any particular investor.

Nothing in this letter is meant as personalized investment advice and you should not construe it as such. Trading involves risk of loss, and in the case of options, the loss can be 100% of the amount invested. Any trading that you do with reference to strategies and tactics suggested in this report should be done only after consulting with your financial adviser. Trade at your own risk. 

Report Notification Emails

I have just become aware that the email notification system stopped working properly a couple of weeks ago. I have just run an update of the software which hopefully will correct this. Please check the home page of Liquidity Trader for any recent updates in case you missed them.

I apologize for the snafu!

Lee

Federal Tax Revenues Are Slowing

Last week I took a pre end of month look at the withholding taxes for November because of the earlier than usual release of the jobs report. We saw a weakening trend, along with an indication that the BLS jobs data impressionist art might beat expectations.

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As I wrote in last week’s report:

11/29/22 The annual growth rate is trending down, indicating falling revenues. Whether that’s due to falling employee earnings inflation or a slowing economy, or combination of the two doesn’t matter. Only the fact that revenues are declining matters. That implies more supply ahead. Non-subscribers, click here for access.

Another item of note is that the usual 3 month respiration cycle exhalation phase in the US economy expired early. The last two cycles have been sucking in for far longer than they’ve been blowing out. This is another sign of weakening. Non-subscribers, click here for access.

As for the implications for the current jobs report, you never know because the BLS methodology in s so speculative, being based on unsupportable assumptions about seasonal adjustment and the birth and death of businesses. They then fit their previous monthly numbers to actual data for months and years after the fact. Non-subscribers, click here for access.

The first release is impressionistic art. Bad, impressionistic art. It only becomes more realistic after they refit their numbers to real numbers derived from unemployment compensation and tax data.  Tax data that we have in real time. Non-subscribers, click here for access.

That said, the withholding tax collections for November are about where they were in October. That implies that there was no change in the level of jobs, or maybe some decline, given that there is some wage inflation. That’s the reality. The nonfarm payrolls number is something else. Non-subscribers, click here for access.

Dow Jones Marketwatch economists’ survey consensus is for a gain of 200,000 jobs vs. 261,000 reported in October. Based on October withholding, the October number was understated. The BLS often makes up for that in the next month’s number. Bottom line is that the BLS number should meet or beat expectations based on their October number being too low, and the November tax collection level being about the same as at this point in October. Non-subscribers, click here for access.

But I reiterate that this is a sideshow. Whatever the BLS reports, and whatever the initial market reaction, the fact is that the market will go on about following the trend that it has already established. Where we need to be focused, is on the fact that the market will continue to get pounded by new supply. That will limit the size and duration of the current rally phases in stocks and bonds. Non-subscribers, click here for access.

Our review of the month end data from the US Treasury confirms that revenue growth continues to slow. Here’s what that means for investors. GTFO. Non-subscribers, click here for access.

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Swing Trade Screen Picks – Picks are Balanced this Week

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For the week ended December 2, there were 44 charts with second or third buy signals as the week ended, and 45 sells. 2 of the sells were bearish ETFs. 1 of the buys was also a bearish ETF, resulting in net gain of one on the bear side, and a final score of 45 bullish and 44 bearish signals. That’s essentially a tie after two consecutive weeks of a bearish tilt in new signals. Non-subscribers click here for access.

The market overall is still riding the residual momentum of the 174 to 18 win for the buy side 3 weeks before. Often the results of such surges don’t begin to show up until the second week after the bulge in signals. Without any in-depth statistical analysis, my sense is that a signal surge like this has a shelf life of 3-4 weeks. Consequently, I think that time is up on this rally. But there has been no sell side surge in recent weeks, so the path of least resistance should still be on the buy side until we see triple digits on the sell side one day. Non-subscribers click here for access.

With the above in mind, in my visual review of the screen output this week I leaned toward giving the benefit of the doubt to the buy side. But most of the buys were trading at or just below major resistance. I took a shot on three that appeared primed to break out. Non-subscribers click here for access.

At the same time, I found 5 that I liked on the sell side, and added those as shorts. All or noted on the table below, with charts following, so that you can judge for yourself whether you agree with my take. Non-subscribers click here for access.

All previously open picks and those closed out last week are shown on the table below After adding the new picks, there will be 5 buys and 8 shorts. Non-subscribers click here for access.

For the week, performance went backward, with an average gain of 2.5% on an average holding period of 2 weeks.

Technical Trader subscribers click here to download the complete report.

Subscription Plans

The strategy and tactics opinions expressed in this report illustrate one particular approach to trading. No representation is made that it is the best approach, or even suitable for any particular investor. This is a developmental and experimental exercise, for the purpose of providing experienced chart traders with ideas and concepts to use or not use as they see fit. 

Nothing in this letter is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical. The method behind these picks is experimental, and may change over time.  I may trade my own account, and may buy, sell, sell short or cover short, or have positions in any of the stocks on the list at any time, based on a particular trading style that is unique to me. My entry and close out levels are likely to differ from those published due to the exigencies of my trading style and time constraints. I post these items in good faith for informational and educational purposes, and do not take positions in opposition to those which are published. All chart picks are actively traded stocks, and I assume that no subscriber to these reports, nor the total of all subscribers taking positions, would do so in a size that would influence the market price. 

Performance tracking assumes 100% cash basis, no margin, no options. You should not assume that recent performance as reported can or will be repeated in the future. Trading involves risk of loss. In the case of options, the loss can be 100% of the amount invested. When leverage is used the loss can exceed the account equity under certain conditions.

The opinions expressed here assume that readers are experienced investors or are working with an investment advisor.

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