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Critical Pullback for Gold

Lee Adler

xxxx is a support level but breaking it wouldn’t be catastrophic. Holding at that level would enhance bullish potential. Breaking the next projected support level of xxxx would be a bad sign that would suggest a move at least to the current early 13-week cycle projection of xxxx. Longer term charts suggest that it could get worse if that happens. Here are the particulars, and an update on swing trade chart picks.    Non-subscribers click here for access.

Subscribers, click here to download the report.

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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. 

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US Economy Didn’t Crash in December?

Lee Adler

Yesterday I posted a report on the plunge in the withholding data. Non-subscribers, click here for access.

Subscribers, click here to download the report.

That conclusion may not have been correct. A reader brought to my attention that there was apparently a tax law effect. Another tax tracking service estimated that the effect of this change was 17%, so that there would have been a net year to year gain of 6.1%. This would have been the rate of change, in the absence of the effect of deferment of withholding in the prior year due to pandemic relief legislation. December 2022 was the giveback.

In reviewing the data, I noted that there was a 21% surge in year to year withholding tax collections in December 2022. You can see that on the withholding tax chart in the report. Non-subscribers, click here for access. Therefore the effect of the tax deferment may well have been 17%, or close to it. The analysis of that impact appears to be accurate.

Assuming the adjusted figure of a year to year gain 6.1% is correct, then the real growth rate would have been 2% based on recent BLS earnings inflation reported at 4%.  The adjusted data presented in the other report claims that withholding growth was equivalent to the BEA rate of wage inflation at 6%. That implies zero job growth.

I apologize that my analysis posted yesterday appears to be materially incorrect because of this factor. However, my broad conclusions remain the same. There’s still lots of Treasury supply on the way. The deficit will apparently not grow beyond the official forecast but it remains enormous and isn’t going away.

In January, the effect of the deferred withholding back in December 2021 that was recaptured in December 2022, will be zero. We’ll then get an apples to apples comp. I will provide an interim update on the January year to year change during the month.

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US Economy Crashed in December – Nope, See Update

Lee Adler

NOTE! This report has been updated here with important previously overlooked information. 

Withholding taxes plunged in December. They are by far the largest component of Federal tax revenue. This was not an anomaly. It was a continuation of a downtrend that began in November. This trend is a sign of economic weakness, recession, and most importantly, the fact of less revenue than expected. The US Government schedules Treasury issuance on the basis of revenue forecasts. When revenue falls short of the assumption underlying the supply forecast, it means that Treasury supply will increase. Now this will come from an already heavy forecast level in the first quarter. Non-subscribers, click here for access.

Subscribers, click here to download the report.

Despite market expectations of lower interest rates ahead, the Fed is not yet refilling the punchbowl. The existing punchbowl, the Fed’s RRP facility, continues to be drained. It will run out of funds xxxxxxxxz xxxxxx xxxxxxxx xxxxx xxxxxx. Only the timing is at issue. The fall in tax revenues suggests that the day of reckoning will come sooner rather than later. I’m back to projecting xxxxxxxxx xxxxxxxxxx xxxxxxx, but we’ll adjust that expectation as we determine day by day xxxxxxxxx xxxxxxx xxxxxxxx xxxxxxxx, and whether RRP slush fund withdrawals are xxxxxx xxxxxxxx xxxxxx xxxxxxxxx.  Non-subscribers, click here for access.

 

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Swing Trade Screen Picks – Starting the New Year with a Bad Idea

Lee Adler

In my last post before the holidays, I saw what I thought was the great idea of buying the lagging dogs. Based on yesterday’s market action, maybe that wasn’t such a good idea after all. It’s too soon to know for sure, but I started the review this morning with the idea that it would be prudent to place stops below key support levels, in case no rebound is coming. Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

12/20/23 As the market has melted up the screens continue to generate far more buy signals than sell signals. Over the past 3 days there have been 145 charts with a second buy signal over the prior week and just 39 with second sell signals. These buy signals mostly came in the context of charts that had already been trending upward for weeks. In some cases, the signals indicated trends that appeared to be heading for a parabolic stage.

On the long side I am not prepared to chase buy signals on stocks that are going parabolic. The exit signals are likely to come too late to snag profits. However, there were a surprising number of good traditional setups. These stocks are laggards. There are always late-stage movers in any big market move. So I chose to add 9 of these that will hopefully be in that class. I am adding these without stops as usual.

My conclusion about those lagging positive setups now looks misplaced, but I’ll give them a little rope, placing stops just below key trend support levels. I still like the structures of most of the patterns, so I’m not ready to cut and run yet. Non-subscribers click here for access.

In reviewing the screen output, I wasn’t moved by any of the longs. There are enough on the list already. Non-subscribers click here for access.

On the short side, most of the sell signals came on charts just coming off a new high. Normally I don’t like to short stocks in uptrends, but I had an urge to go top fishing here, so decided to go for limited exposure while being willing to accept a bit of short-term pain. I settled on 8 charts that I liked the most. These are listed on the table below. I decided to start the tracking based on adding a half position at the opening price and a half at the closing price, as of today January 3, 2024. Non-subscribers click here for access.

We started with 12 picks since the last update, all longs. 3 hit stops over the 12 days since the last report. The rest are open. As of Tuesday’s close, the average theoretical gain on the existing picks, including both those still open and those closed out was 9.9%, with an average holding period of 25 calendar days. That’s down from the prior report’s average gain of 16.6%, with an average holding period of 26 days, thanks to the last group of picks getting crunched yesterday. Non-subscribers click here for access.

10 picks were closed out in December. 8 were profitable. Including all closeouts during the month, the average gain was 12.8%, with an average holding period of 23 calendar days. Non-subscribers click here for access.

This was the best monthly performance since I started this exercise 3 years ago. The tweaks applied over that time have trended in the right direction despite a few bad months. Non-subscribers click here for access.

Table of picks and performance in the subscriber report. 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.

The public facing report is not the complete 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.

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Now, Take a Deep Breath

Lee Adler

No, this is not the beginning of the end. There’s more work to be done for this bull to top out, But first, a breather.  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. 

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Macro Liquidity – The Party’s Over

Lee Adler

The market has reached maximum extension versus the Composite Liquidity Indicator. The indicator remains flat despite surging bank deposits. Investors and dealers appear to be pulling cash from money market funds to buy stocks and bonds. That’s bulking up bank deposits, in a bullish self feedback loop. Non-subscribers, click here for access.

Subscribers, click here to download the report.

But that only can go so far as the Fed continues to work to blunt that via QT. QT or Quantitative Tightening is the act of the Fed shrinking its balance sheet, which in turn destroys bank deposits. Foreign central banks have also been uncooperative in supporting the bull moves in US stocks and bonds. That reduces systemic liquidity. Non-subscribers, click here for access.

In recent months animal spirits have resulted in enough private credit creation to outstrip the Fed. The US Treasury has goosed the process by stopping the issuance of more T-bills than are expiring. With a reduced supply of T-bills, investors have had more cash to play with, and play, they did. But all that will come to an end over January and February. There are already hints from these liquidity measures that a market top may be at hand. Non-subscribers, click here for access.

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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! 

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Happy Holidays to All!

Lee Adler

I wish you and yours the happiest of holidays, a Merry Christmas, and Happy New Year!

And a special thanks to you, Liquidity Traders! While 2023 has been trying, you have made it a very good year for yours truly. I thank you for your business, your confidence in my work, and for your support! Here’s to an even better 2024!

I will take a break from publishing any reports this holiday week. Regular publication will resume on January 2. Enjoy your holiday week and I’ll see you next year! 😊

From Nice, France,

Joyeux Noel!

Lee

 

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Here’s What You Can Say About Gold For Sure 12/22/23

Lee Adler

Nothing to add today. Previous comments still apply. Meanwhile, letting the 3 new mining stock picks ride, with an average gain of 4.9% on an average holding period of 11 calendar days. 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!

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. 

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Swing Trade Screen Picks – Buying The Lagging Dogs

Lee Adler

As the market has melted up the screens continue to generate far more buy signals than sell signals. Over the past 3 days there have been 145 charts with a second buy signal over the prior week and just 39 with second sell signals. These buy signals mostly came in the context of charts that had already been trending upward for weeks. In some cases, the signals indicated trends that appeared to be heading for a parabolic stage.   Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

I reviewed all of the charts from the screen results. Forget the sell signals. The chart structures simply do not look viable as shorts. Non-subscribers click here for access.

On the long side I am not prepared to chase buy signals on stocks that are going parabolic. The exit signals are likely to come too late to snag profits. However, there were a surprising number of good traditional setups. These stocks are laggards. There are always late-stage movers in any big market move. So I chose to add 9 of these that will hopefully be in that class. I am adding these without stops as usual. Non-subscribers click here for access.

We came into last week with 5 longs and 2 shorts on the list. I had stop prices on all of them. Two shorts and one long hit their stops, and I had elected in the last report to close another long as of December 11. That left just 3 longs on the list. Non-subscribers click here for access.

9 picks have been closed out in December so far. 7 were profitable. Including all 9 closeouts, the average gain was 5.3%, with an average holding period of 20 calendar days. Non-subscribers click here for access.

As of Tuesday’s close, the average theoretical gain on the existing picks, including both those still open and those closed out was 16.8%, with an average holding period of 26 calendar days. That’s up from the prior week’s average gain of 11.8%, with an average holding period of 24 days. Non-subscribers click here for access.

12/5/23 November was a good month with 10 of 12 closed picks registering gains. Closed picks had an average gain of 5% with an average holding period of 20 calendar days. Non-subscribers click here for access.

Table of picks and performance in the subscriber report. 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.

The public facing report is not the complete report. Only subscribers have access to the full report and regular tracking of the theoretical picks and closeouts made in the reports.

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Not Even the End of the Beginning.

Lee Adler

There are signs that this rally still has legs. There are also signs that the 4 year cycle is strengthening. The up phase ideally should last at least xxxx xxxxx xxxxx, interrupted only by xxx xxxxxx xxxxxx xxxxxx in 2024. Here are the new price projections and likely time frames for expecting the top.  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. 

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