Author: Lee Adler

A number of technical signs say that the bulls have the upper hand here. But those signs aren’t uniform. And I don’t trust them because they violate the First Commandment of Investing. Thou shalt not fight the Fed. Prepare to meet thy maker if thou dost.

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Cycles-  Multiple cycles look to be headed in xxxxxxx xxxxxxxxx over the next few months. xxxxxx the probability of a near term breakout xxxxxx xxxxxxx xxxxxx xxxxxx. Non subscribers click here to access.

The 10-12 month cycle has ideally entered a xxxxx phase lasting through December. Any strength this week would indicate xxxx xxxxxx xxxxxx that could carry back to the xxxxx-xxxxxx range before a xxxx in this cycle. Non subscribers click here to access.

On the other hand, any xxxxxx xxxxxxxxxxx this week would suggest that this cycle is topping out now. Non subscribers click here to access.

Meanwhile, 6 month cycle indicators are on the razor’s edge of confirming that xxxxxx xxxxx xxx x xx. Any xxxxxx this week should trigger clear xxxxxxx signals. Non subscribers click here to access.

Long Term Weekly Chart –   A weekly close above xxxx would break the 6 month cycle line, signaling an up phase in that cycle, with an initial target of around xxxx on this chart. Failure to be clear of xxxx at the end of the week would suggest that the 6 month cycle down phase remains intact. Non subscribers click here to access.

Monthly Chart –   Trend resistance will begin November at xxxx, after it appears that the SPX will end October above expected resistance around xxxx. Non subscribers click here to access.

Long term momentum has reached a critical level that could either indicate a major bottom if it turns up, or a secular bear market if it continues lower. Non subscribers click here to access.

Cycle Screening Measures –  The cycle screening aggregate plunged into negative territory, but it did not break the bullish short term or intermediate term patterns. The market would need to weaken further this week for that to happen. None of the negative divergences have formed that typically precede a significant downturn and moving average and cumulative versions of these indicators remain mildly bullish.  Non subscribers click here to access.

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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. 

It happens. Signals whipsaw, particularly in rangebound markets that I refer to as meat grinders. This has been one of those.

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The last set of sell signals was wrong. I went with them wholeheartedly, and digging out has proven to be problematic, with a string of losses that wiped out a month’s worth of gains. I’m still trying to right the ship here, but recovery has been elusive so far. So I am proceeding with caution in looking at this week’s output. Non-subscribers click here for access.

For the week ended October 31, there were 51 charts with second or third buy signals on Thursday, Friday and Monday, and 39 with second or third sell signals I visually reviewed the charts, in both groups, and saw mostly rangebound whipsaw signals. While some of the shorts seemed to have a little running room, the setups weren’t ideal for big moves, so I demurred on those. Non-subscribers click here for access.

There were 4 charts that I liked enough on the buy side to add to the list. I added those without stops. That will leave us with 8 picks, including 2 shorts and 6 buys. Non-subscribers click here for access.

Meanwhile I closed out 14 picks on the short side last week mostly by hitting stops with a few that I had set to trigger as of the opening price last Monday. The end result, including 3 picks left open, was an average loss of 4.9% on an average holding period of 12 calendar days. Non-subscribers click here for access.

All picks close out last week along with open and new picks picks are shown on the table below with charts following. I adjusted stops on open picks as shown. Non-subscribers click here for access.

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10/3/22 Looking at the scoreboard, September showed an average gain of 3.3%, on an average holding period of 13 calendar days. All of the 17 picks closed out in September have been shorts. Of the 16 picks closed in August, 11 were buys and 5 were shorts. Non-subscribers click here for access. 

9/5/22 16 picks were closed out in August. The average gain was 3.4% with an average holding period of 2 weeks. Since last November, when I last tweaked the screening and selection methodology, 108 picks were closed out with an average gain of 2.9% and an average holding period of 17 calendar days. Non-subscribers click here for access. 

8/1/22 In July … Only two picks were closed out during the month for an average loss of 2.6%. Non-subscribers click here for access. 

7/4/22 Picks closed out in June averaged a gain of 10.1% on an average holding period of 17 calendar days. That works out to an average of 4.1% per week. There were 12 closed picks. The win rate was 75%. Non-subscribers click here for access. 

6/6/22 Picks closed out in May averaged a gain of 3% on an average holding period of 2 weeks. That worked out to an average of 1.5% per week.  There were 28 closed picks. 25 were shorts. Non-subscribers click here for access. 

5/9/22 April was a challenging month. The final tally of closed picks in April had an average loss of 0.4% with an average holding period of 11 calendar days. My system does not do well when the average low to low cycle duration drops below 4 weeks. Non-subscribers click here for access. 

March was better. Picks closed in March had an average gain of 4% with an average holding period of 23 calendar days. Non-subscribers click here for access. 

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.

Yes, there are plenty of bullish signs on the charts. For the short to intermediate term, that’s ok. It’s good enough, smart enough, and doggone it, people like it. But it violates Rule Number One, the First Commandment, “Thou shalt not fight the Fed!”

Cue thunderbolt.

However, on this side of the Liquidity Trader stable, we focus on the technical, and it has gotten more bullish. Trust but verify, right?

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Cycles-   Despite the rally, the 10-12 month cycle is still due to start topping out xxxx xxxx, with the top phase lasting through xxxxxxxxx. The new projection of xxxx was already hit xxxx xxxxxx xxxxxx xxxxxxxx, at the beginning of the up phase. The current attempt should see resistance between xxxx and xxxx. Non subscribers click here to access.

Meanwhile, 6 month cycle indicators xxxxxxx xxxxxxx indicated an up phase. The October low was xxxxxx xxxxx  for a low on that cycle, but perhaps the 6 month and 13 week cycles have merged into a hybrid of around xxx months duration. If so, the high would be due in xxxxxxxxxx, concurrent with the 10-12 month cycle high. Non subscribers click here to access.

Third Rail  The market ran right to the top of the short term uptrend channel it had set up the week before. That top line rises from xxxx to xxxx this week. The magic number on FOMC day on Wednesday is xxxx. If they get above that, they’ll blow the roof off to xxxx by the end of the week. If they drop under xxxx, then we’re likely to see xxxx. Non subscribers click here to access.

The breakout from the base that formed over the past month has a conventional measured move target of xxxx. Non subscribers click here to access.

Long Term Weekly Chart –   A weekly close above xxxx would break the 6 month cycle line, signaling an up phase in that cycle, with an initial target of around xxxx on this chart. Failure to be clear of xxxx at the end of the week would suggest that the 6 month cycle down phase remains intact. Non subscribers click here to access.

Monthly Chart –   Trend resistance will begin November at xxxx, after it appears that the SPX will end October above expected resistance around xxxx.Non subscribers click here to access.

Long term momentum has reached a critical level that could either indicate a major bottom if it turns up, or a secular bear market if it continues lower. Non subscribers click here to access.

Cycle Screening Measures –  The cycle screening aggregate rose sharply last week. Indicator patterns have xxxx xxxxxxx xxxxxx intermediate term, and possibly xxxxxxx.  Non subscribers click here to access.

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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. 

Friday’s rally felt impressive on top of last week’s backing and filling. But the technical indicators haven’t kept up. That could all change on Monday, but as of Friday’s close, there were still plenty of reasons for skepticism.

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Cycles-  The expected 13 week cycle up phase is xxxx xxxxx . But it’s not yet clear if it will have enough momo to xxxxxxxxx xxxx xxxx xxxx xxxx 6 month cycle down phase. Monday’s action could go a long way toward answering that question.  The 6 month cycle projection has dropped to xxxx. I’ll respect the projection until the market clears resistance at xxxx. Non subscribers click here to access.

Third Rail   A new uptrend channel centerline rises from xxxx to xxxx this week. They’d need to at least break that to signal an end to this phase of the rally. Non subscribers click here to access.

There’s a trend resistance convergence around xxxx. If cleared, they’d have running room for an immediate move to xxxx. If not cleared, then keep an eye on the downtrend line that drops from xxxx to xxxx this week. Likewise, dropping below xxxx would suggest a fast move to at least xxxx, and if that breaks, then to xxxx. Non subscribers click here to access.

Long Term Weekly Chart –   The 18 month – 2 year cycle is has a projection of xxxx, and an idealized bottoming window that starts xxxx and lasts through xxxx xxxx. The 3-4 year cycle has a huge likely bottoming window from xxxx  until xxxx xxxx, with a current projection of xxxx to xxxx. Conclusion, anything goes, with the least likely outcome being a xxxxxx xxxxxxx xxxxxx xxxxxx soon. Non subscribers click here to access.

Monthly Chart –   Long term momentum has reached a critical level that could either indicate a major bottom if it turns up, or a secular bear market if it continues lower. Non subscribers click here to access.

Cycle Screening Measures –  Still negative overall but with potential early warning signs of a xx xxxx xxxx xxxx  forming over the next 2-3 weeks. The setup could xxx xxxxx xxxxxxx. A little weakness early this week xxxxxxxx xxxxxxx xxxxxxxx.  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.