Menu Close

Author: Lee Adler

Primary Dealer Crisis Now, Crisis Later

Primary Dealers were wrong about the Treasury market in September, and it has cost them. They reached a small net long position in their hedged bond accounts just as the bond market was topping out in price terms. Since then, bonds have gotten crushed and yields have soared. The dealers aren’t net short enough to profit.  Non-subscribers, click here for access.

Subscribers, click here to download the report.

We had recognized the potential for a turn in the last report on dealer positions. 9/11/24- Technically Treasuries are near an important inflection point on the charts. Repo shows extended leverage among dealers. They are slightly short overall, which isn’t bullish for the big picture. They are leveraged to the hilt and they’re taking hits.

There’s no information to suggest that the young downtrend in bond prices and uptrend in yields will reverse anytime soon. A bullish turn may need to await the reimposition of the debt ceiling in early January of next year. That’s because if the Treasury follows past practice, when the debt ceiling is imposed, the Treasury will pay down T-bills. That puts cash back into dealer and investor accounts, enabling them to absorb Treasury coupon supply, and to buy stocks at the margin.

But until then, there doesn’t appear to be a catalyst in this data to cause a reversal in the bearish environment for bonds. I had worried about that being a catalyst for contagion into stocks, and we may have gotten our first dose of that today (October 31) with the S&P 500 dropping 108 points.

It looks as though the period from now until the beginning of 2025 will be a time of xxxxxx xxxxxx. We had a xxx xxxxx xxxxxx today. This suggests that it’s time to xxxxxx xxxxxxx xxxxxxxx xxxxxxxxx. I will look for those setups and report on them as they arise in the swing trade stock screens.

Subscription Plans

KNOW WHAT’S HAPPENING NOW, before the Street does, read Lee Adler’s Liquidity Trader risk free for 90 days! Act on real-time reality! 

Swing Trade Screen Picks – Picking a Few Nickels With Steamroller Still Coming

Current screens yielded 464 short-term buys and 459 short-term sells. Rangebound whipsaws continue to dominate the action. After applying long term trend structure and intermediate term filters, there were 70 buys and 29 sells. Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

Last week I wrote that, “I’m not interested in buys at this late stage of the cycle, especially in view of the warning signs in the liquidity measures.” So much for that. After reviewing the charts I decided to try and pick up a few nickels in front of the steamroller. I added 5 charts on the buy side. I liked one short. Non-subscribers click here for access.

9 picks were closed last week and I’ll remove 1 more as of Tuesday’s opening price. I am letting the rest of the existing picks ride, with added or adjusted stops in some cases. I assume risk management through small position sizes and diversification. Your approach may differ. Non-subscribers click here for access.

As of October 28 closing prices, including open picks and those closed last week, the list had an average gain of 5.2% down from +5.3% the previous week, on an average holding period of 30 calendar days, up from an average of 25 days.  Picks closed in September had an average gain of 1.6% on an average holding period of 20 calendar days.  Picks closed so far in October had an average gain of +2 % on an average holding period of 27 calendar days. Non-subscribers click here for access.

To view the list and charts of open picks, Non-subscribers click here for access.

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

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 report is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical.

This public report is not the full report.  Only subscribers have access to the full report and regular tracking of the theoretical picks and closeouts made in the reports.  Non-subscribers click here for access.

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gatekeeper are blocking Liquidity Trader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!”

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

THANK YOU FOR YOUR SUPPORT!

Market Broke for Second Wind

Cycle screening data turned negative on the xxxxxxxx term. However, the sell indications look premature for the xxxxxxxx cycle. Broad market indicators are not yet at that level of negativity. Therefore, I’m on the alert for a second wind to the six-month cycle off the expected short-term low due xxxxx xxxxx xxxxx. Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

Cycles – Short-term cycle lows are due xxxx xxx xxx, and the timing looks premature for a xxxxxxxxxxxx xxxxxx xxxxxxxxx. The 13-week cycle is a xxxxxxx xxxxxxxxx however. Its xxxxxx phase could extend into xxxxxx xxxxxxxxxx. Non subscribers click here to access.

With the coming election, this will be less about cycles and more about the news cycle and unpredictable, random kneejerk reactions. If we do get a sharp drop in the short-term, I would expect a xxxxxxxxx xxxxxxxxxx xxxxxx in the 6-month cycle before xxxxxx xxxxxx xxxxxxcomplete. This would be typically around xxxxxxx xxxxxxxx xxxxxxxx. Non subscribers click here to access.

Cycle Screening Measures – These numbers turned deeply negative. The aggregate reached a level consistent with a xxxxxxxxx xxxxxxxx, but the pattern and other measures suggest intermediate term xxxxxxx xxxxxxxx xxxxxxxx. The problem here is that the xxxx indications look premature for the 6-month cycle. Non subscribers click here to access.

Third Rail – xxxx and xxxxx are the support levels to watch this week. Breaking those could indicate short-term trend change. If neither is broken, then the uptrend remains intact. Resistance is at xxxx and xxxxx. If neither is cleared, a xxxxxx xxxxxxxx is likely to develop between xxxxx and xxxxx. The xxxxxxxxxxxx xxxxxxxx would signal the next significant move. Non subscribers click here to access.

Long-Term Weekly Chart – A weekly close below xxxxxx would suggest a xxxxxxxxx xxxxxx xxxxxx. 18-26 month cycle indicators are in very interesting positions here. A xxxxxx xxxxxxx this level would suggest a xxxxxxx xxxxxx. Non subscribers click here to access.

Monthly Chart – The market is approaching its upper channel bound at xxxx, now, rising to around xxxx in November and xxxx in December. Non subscribers click here to access.

Subscription Plans

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

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gatekeeper are blocking Liquidity Trader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!”

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

THANK YOU FOR YOUR SUPPORT!

_______________________________________

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 Approaches Its Long Term Target

Gold’s run hit trend resistance last week. The longer cycles remain in trending mode. 9-12 month cycle channel resistance projects to xxxx over the next week. The only current projection points to xxxx, which is also the measured move target of the 9 year high base breakout in 2020. There’s a second target above that, but first we need to see how it acts at the first one.  The first sign of even a potential reversal would be a daily close below xxxx.   Non-subscribers click here for access. 

Subscribers, click here to download the report.

There are 10 mining stocks on the swing trade pick list, with an average gain of 13.7% and average holding period of 19 calendar days. Gotta know when to hold and when to fold.

Subscription Plans

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

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gate keeper are blocking Liquiditytrader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!” THANK YOU FOR YOUR SUPPORT!

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

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. 

Swing Trade Screen Picks – Letting It Ride

Current screens yielded 119 short-term buys and 520 short-term sells. That’s flipped from the week before as rangebound whipsaws dominate the action. After applying long term trend structure and intermediate term filters, there were 16 buys and 69 sells. Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

I’m not interested in buys at this late stage of the cycle, especially in view of the warning signs in the liquidity measures. I reviewed the sell side charts. Some of the setups were interesting, but I prefer to wait for more signs of a market top being in place before adding more shorts. So with a big list already, I prefer to sit and wait for it to shrink via hitting stops. Non-subscribers click here for access.

As of October 21 closing prices, the list had an average gain of 5.3% down from +5.8% the previous week, on an average holding period of 25 calendar days, up from an average of 26 days. Picks closed in September had an average gain of 1.6% on an average holding period of 20 calendar days. Picks closed so far in October had an average gain of +2.6% on an average holding period of 25 calendar days. Non-subscribers click here for access.

To view the list and charts of open picks, Non-subscribers click here for access.

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

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 report is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical.

This public report is not the full report.  Only subscribers have access to the full report and regular tracking of the theoretical picks and closeouts made in the reports.  Non-subscribers click here for access.

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gatekeeper are blocking Liquidity Trader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!”

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

THANK YOU FOR YOUR SUPPORT!

Liquidity Measures Show Markets Stretched to the Limit

This week I looked at the issue of bank capital and its relation to bond prices. This is another fly in the ointment that is poised to blow up, especially after Monday’s rout in the bond market. Between this fragility, the extreme extension of stock prices versus bank deposits and money supply, and the possibility of disintermediation pulling deposits out of banks, there’s xxxxxxxxxxxxxxxxx xxxxxxxxx  xxxxxxxxxx xxxxxxxxx. Non-subscribers, click here for access. 

Subscribers, click here to download the report.

One other issue is the potential for a sharp reduction in T-bill issuance in November and December. That would xxxxxx xxxxxxxx xxxxxxxxx xxxxxxxxx. Bond buyers, including dealers, would need to either repo their Treasury coupon purchases, liquidate other assets, or take on when-issued short positions against future issuance. Any of those actions could further destabilize the bond market, which xxxxxx xxxxxxxx xxxxxxxx. Non-subscribers, click here for access. 

On the surface, it appears that there’s still adequate liquidity to support the rally, but this thesis is now stretched to the limit. I’m still reluctant to xxxx xxxxxxxx xxxxxx xxxxxxxxx. I would want to xxxxxxxxx xxxxxxxx xxxxxxxxx long positions, and definitely not xxxxxxxxxx xxxxxxxxx xxxxxxxxxx As for bonds, I’m back to xxxxxx xxxxxx. Non-subscribers, click here for access. 

Subscription Plans

KNOW WHAT’S HAPPENING NOW, before the Street does, read Lee Adler’s Liquidity Trader risk free for 90 days! Act on real-time reality! 

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gatekeeper are blocking Liquidity Trader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!”

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

THANK YOU FOR YOUR SUPPORT!

For More Upside

There’s no sign of a top yet in the technical or cyclical data. Cycle projections point to more upside this year. This report shows exactly how much more. Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

Cycles – The 6-month cycle has a new projection of xxxx due in xxxxxxx. However, in the short run, the 13-week cycle should be xxxxxxxxxxxxxx. Its high was ideally due xxxxxxx xx. The 13-week cycle projection still points to xxxxxxxxxx. 6-month and 10-12 month cycles should be xxxxx in up phases, which should xxxxx shorter term down phases xxxxx.

Cycle Screening Measures – These numbers remained positive, xxxxxx the uptrend, and xxxxxxxxx enough for the xxxxxxxxxxxx. There’s no sign of  xxxxxxxxxxxxxxxxxxxxxxx.

Third Rail – The market stayed within its uptrend channels last week. To create even the beginning of a short-term reversal would require a daily close below xxxxx. On the other hand, clearing xxxx this week would open the way for a quick move to xxxx.

Long-Term Weekly Chart – The market has room to run to xxxx now, and xxxxx at year end. The 3-4 year cycle indicator has edged to the xxxx side, which suggests that the beginning of xxxxxx is at hand. Typically, xx year cycle tops take xxx months to build and break down. That allows for xxxxxxxxx.

Monthly Chart – The market is approaching its upper channel bound at xxxx, now, rising to around xxxx in November and xxxx in December.

Subscription Plans

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

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gatekeeper are blocking Liquidity Trader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!”

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

THANK YOU FOR YOUR SUPPORT!

_______________________________________

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 a la Mode

Gold has gone into trending mode and our mining picks are swinging higher, so I a few more to the list that are just staring to move. This report shows you where this monster move appears to be headed.  Non-subscribers click here for access. 

Subscribers, click here to download the report.

Subscription Plans

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

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gate keeper are blocking Liquiditytrader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!” THANK YOU FOR YOUR SUPPORT!

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

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. 

Liquidity Says, The End Is Nigh, Almost

Market rallies continue to be supported by adequate liquidity, but there are chinks in the armor. Nothing outright says “Sell now,” but there are warning signs that say, xxxx xxxx now. It’s probably too late. Non-subscribers, click here for access. 

Subscribers, click here to download the report.

One item to watch closely is repo usage. Repo growth is absolutely necessary in this market to fund an uptrend in stock prices. And Repo has been dropping like a rock since peaking at the end of September. So far, there’s just a break of the short-term trend, which isn’t significant in the big picture, but it could be if it continues, or backs and fills for a while and then breaks down. Non-subscribers, click here for access. 

We also need to watch the Fed’s RRP slush fund as it approaches zero. That will become one less bullish prop for the markets. It has been a form of deferred QE, or strategic QE reserve, stored up from the old days when the Fed pumped so much money into the system, $2.5 trillion of it wasn’t able to be deployed. Now that RRP money is almost all gone, absorbed by a couple years of Treasury issuance. Non-subscribers, click here for access. 

Meanwhile, total money is still surging, so there’s still plenty of cash around. That’s a reflection of the market generating profits, and money growth, on its own. But it’s not a matter of sufficiency. It’s a matter of willingness to deploy, and that’s at an all time high. The question is how much farther can that willingness be stretched as prices rise higher and higher. Non-subscribers, click here for access. 

The markets are creating money with no help from the Fed. That’s strictly a matter of sentiment, or call it animal spirits. And that can change. That change is what we are looking for in this liquidity data. Right now the markets are especially vulnerable to sentiment changing. Stock prices are more extended versus money supply than at any point in history. Which means that the risk of a sentiment change is higher than at any point in history. Non-subscribers, click here for access. 

For now, the stock market remains a xxxxxxxx xxxxxxx. The bond market has probably already made xxxxxxx xxxxxx xxxxxxxx, but it will be a jagged path that will depend in part on the supply schedule. Yields began to soar as bond prices plunged in recent weeks. But thanks in part to light Treasury coupon issuance this week, ……… Non-subscribers, click here for access. 

Subscription Plans

KNOW WHAT’S HAPPENING NOW, before the Street does, read Lee Adler’s Liquidity Trader risk free for 90 days! Act on real-time reality! 

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gatekeeper are blocking Liquidity Trader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!”

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

THANK YOU FOR YOUR SUPPORT!

Swing Trade Screen Picks – Loads of Buy Signals with Good Setups

Current screens yielded 488 short-term buys and 174 short-term sells. After applying long term trend structure and intermediate term filters, there were 92 buys and 29 sells. Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

I reviewed the charts. The sell side setups were problematic and I chose to add no shorts. There were numerous, solid setups on the buy side, and I chose to add 7 and stopped about half way through the list. With these additions, there will be 23 open picks to start this week which is more than enough. Non-subscribers click here for access.

As of October 14 closing prices, the list had an average gain of 5.8%, down from + 7% the previous week, on an average holding period of 26 calendar days, up from an average of 25 days.  Picks closed in September had an average gain of 1.6% on an average holding period of 20 calendar days.  Picks closed so far in October had an average gain of +5.2% on an average holding period of 29 calendar days. Non-subscribers click here for access.

I assume risk management through small position sizes and diversification. Your approach may differ. Non-subscribers click here for access.

To view the list and charts of open picks, Non-subscribers click here for access.

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

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 report is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical.

This public report is not the full report.  Only subscribers have access to the full report and regular tracking of the theoretical picks and closeouts made in the reports.  Non-subscribers click here for access.

Attention New Subscribers! Please check your spam folder for your subscription welcome messages and post notifications and whitelist Liquiditytrader.com. Some email providers like Hotmail and others which use the Proofpoint gatekeeper are blocking Liquidity Trader emails completely. I have been unable to get them to stop. Please notify them to “Let my emails go!”

If you continue to have issues receiving Liquidity Trader emails, just check here daily at 9 AM ET for the latest posts.

THANK YOU FOR YOUR SUPPORT!