Lee AdlerRecent weakness has negated the upside implications of the reverse head and shoulders pattern that formed between October and January. The up phase in the 9-12 month cycle now looks like it will remain flat. Here’s what needs to happen to keep things on the up and up. And a gold miner pick to swing.
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Macro Liquidity continues to bulge. The stock market has followed. It became oversold versus the surge in liquidity that the Fed initiated in March 2020. And it hasn’t looked back since. Should we expect to see stock prices become overbought again before the next big crash?
Stock prices have caught up with liquidity but with liquidity expected to continue rising stock prices could continue to rise along with it. But the balance is shifting and we may not need to see Overbought again on this chart before the next crash. Here’s why, and how I’m approaching it.
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Short term cycles have topped out and concurrent down phases are ideally due to last 2-3 weeks. With weak upward momentum in the 6 month cycAle, the potential exists for a significant downdraft. That, in turn would signal the onset of a 6 month cycle down phase. This is the best shot that bears have had for a turn in the tide since August-September.
As a result, I’m shifting my focus to be alert for more swing trade chart picks on the short side.
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These reports are for informational purposes, aimed at a broad 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.
Both bonds and stocks have weakened over the past 2 weeks. It’s a sign that the Fed isn’t supplying enough QE.
We’ve known for a long time that it wasn’t enough to support twin bull moves in both asset classes. Have we reached the tipping point where it’s insufficient for either to move higher while the other descends?
The answer, my friends, is blowing in the wind—the wind of margin calls now blowing through dealer balance sheets as leveraged fixed income positions continue losing value.
Meanwhile the $2.9 trillion Biden stimulus proposal may boost the US economy, but it will be a disaster for the increasingly fragile stock and bond markets. Here’s why, and what you should do about it.
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A major swing cycle is in trouble.
The risks are astronomical despite improved tax collections.
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This report shows why that’s the target, and adds a few more swing trade picks to take advantage.
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These reports are for informational purposes, aimed at a broad 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.
We have a little tightness in the market at the end of every month. That’s because the Treasury issues a big wad of TP and the Fed isn’t there to absorb it. The Fed is just doing its piddly little $20 billion a week of Treasury purchases, and the Treasury is slugging the market with $100 billion or so of new supply.
Last week the actual numbers were worse. The last QE injection was $6 billion on December 23. They then didn’t do another one until Monday January 4, with $8.8 billion. Meanwhile, the Treasury plopped $164 billion in new supply on to the market on December 31.
We got through the deluge relatively unscathed. But there’s a lot to look forward to for the rest of the month.
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The cycle low is confirmed and we have new upside projections.
Cycle configurations remain bullish. I have updated cycle projections for both the short and intermediate term, and the long term. There’s no respite in sight for bears yet, but a few more shorts than usual showed up in this week’s chart picks. Here’s what that could
Technical Trader subscribers click here to download the report.
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These reports are for informational purposes, aimed at a broad 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.
