Author: Lee Adler

4000 is not only a nice round number, but it coincides with technical levels and indications that will tell us in the next few days whether the rally is finished, or whether the bear market is finished.

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I’ve made clear that I think that all the speculation about easier Fed policy ahead as the basis for a bull market will prove not only fruitless, but counterproductive. However, I will respect the technical verdict of the market. The judge has sent the jury out to deliberate.

Cycles– Short term cycles entered flat down phases last week, as was due. The 13 week cycle is overdue for a high, with the projection now xxxx. The 6 month and 10-12 month cycle tops are due between xxxx and xxxxxxxxxxxx. Cycle projections now point mostly to xxxxxxx, with the upper range of xxxxx on the 10-12 month cycle only possible if the short term pullback that is due is shallow. Non subscribers click here to access.

Third Rail – Short term uptrend channels remain intact. The key trendline to watch runs from xxxx to xxxx this week. Bears need to break that line to get anything going on the downside. To begin a more significant reversal, they would need a close below a second trendline that ends the week around xxxx. If that remains intact, then the uptrend remains in force. Non subscribers click here to access.

Friday’s close put the S&P 500 just above a long term downtrend line at xxxx. If it stays above this line this week, it would call the bear market into question. Non subscribers click here to access.

Long Term Weekly Chart – 11/14/22 The rally has confirmed a 6 month cycle up phase. There’s a slim chance of a top here if they hold the line at xxxx this week and drive the market lower on the week. Otherwise, there’s running room to xxxx. Non subscribers click here to access.

There are no long term buy signals yet. But that could happen if the rally extends to the xxx area and consolidates there. Non subscribers click here to access.

Monthly Chart – 11/14/22 The upper boundary of the downtrend channel is around xxxx in November. Ending the month above that would suggest a new intermediate uptrend. Closing below that would reconfirm the downtrend. Non subscribers click here to access.

10/10/22 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. We need to keep an eye on this. It’s an important key as to whether this is still a bear market or not. Non subscribers click here to access.

Cycle Screening Measures – These measures remained in solidly positive territory. However, a negative divergence developed with the market averages. A couple of market down days this week would break the uptrend in this indicator that began over two months ago. However, early week strength would reconfirm the rally, and would also lead to a break in the bear market trend. An extension of the rally this week would also break the longer term bearish trend in the cumulative cycles measure. This is another indicator that we need to watch closely to show whether this is still a bear market, or a new bull market. 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. 

For the week ended November 18, there were 48 charts with second or third buy signals as the week ended, and 75 sells. 4 of the buys were bearish ETFs, resulting in a final score of 44 bullish and 79 bearish signals. That’s a reversal from the 174 to 18 win for the buy side the week before. That apparent strength fizzled in mid week.

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This has been rangebound meat grinder market, characterized by whipsaw signals on both sides of the ledger. Rangebound markets tend to slice and dice swing trade systems that are looking for moves of several weeks, as my system is. It’s a market that takes us out behind the woodshed, and administers a financial and psychological beating. It’s a reminder to stay humble and alert. We just have to gut it out, outlast it, and work on catching and being well positioned for the next swing, regardless of direction. Non-subscribers click here for access.

In view of the recent character of the market, I reviewed the charts with an abundance of caution this weekend. I came up empty on the buy side. Non-subscribers click here for access.

Most of the shorts looked premature. They still appear to have some bouncing to do before they roll over. But I liked 5 of them enough to add to the list. That will give it some balance, adding 5 shorts to the 5 longs still on the list. Non-subscribers click here for access.

Last week I was cautious despite the huge number of buy signals. I added two longs to the list. They did poorly, and I’m looking to limit the losses by adding tight stops. The charts have deteriorated and I’m not willing to give them much more wiggle room for potential rebounds. I’m also cutting one other loser as of the opening price this morning, and tightening stops on the rest. Non-subscribers click here for access.

All picks closed out last week along with open and new picks are shown on the table below with charts following. I adjusted stops on open picks as shown.

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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.

For the week ended November 11, there were 173 charts with second or third buy signals as the week ended, and 19 with second or third sell signals, and one of those was a bear ETF, so the net score would have been 174 to 18. That is as lopsided as I’ve ever seen. There were too many buys to visually review all, and we already had longs on the list so I started with the sells, and then looked at as many buys as I had time for.

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In looking at the charts with sell signals, I saw only one that looked remotely interesting.  It was a Brazilian airline preferred stock. No thanks. Non-subscribers click here for access.

Among the sampling of buys that I reviewed virtually all had already moved to just below resistance. Not ideal entry points. I found two that I liked enough to add to the list, as shown on the table below. Non-subscribers click here for access. 

All picks closed out last week along with open and new picks are shown on the table below with charts following. I adjusted stops on open picks as shown. 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.