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The Big One is Coming

Lee Adler

The tectonic plates of the financial sphere are heaving. The fault lines are growing. Fissures are widening. Cracks are spreading. The pressure is growing in the substrata, and magma is boiling to the surface here and there, and there, and there.

The big one is coming. A financial earthquake the likes of which the world hasn’t seen in 96 years. We know where the epicenter will be. It will be on Wall Street. We just don’t know when. But the time is growing shorter. Non-subscribers, click here for access.

Subscribers, click here to download the report.

We can study the underlying forces, but the best meters of the building pressures are the markets themselves, both bonds and stocks. As lenders become increasingly panicked, they will call in their lines. Borrowers, highly leveraged dealers, banks, and hedge funds will be forced to liquidate. The quake will be upon us in an instant. Non-subscribers, click here for access.

We saw all this developing more than a year ago. It was simply a matter of paying attention to the Fed’s Primary Dealer data and its banking system data. There was absolutely no mystery, and no doubt that it was coming. Non-subscribers, click here for access.

I pointed out in April of last year that the Fed had decided to stop publishing the banks’ unrealized losses on for sale securities. Whenever the Fed stops publishing a line of data that it could easily continue to publish there’s only one reason. They don’t want us to see it anymore. Non-subscribers, click here for access.

But it was already out there, and we used it to extrapolate the losses to the vast bulk of their securities holdings, where no mark to market is required. We recognized then that the system was insolvent, that if the banks were forced to sell their assets, they would be equally forced to recognize losses. I warned that that could result in contagion. Non-subscribers, click here for access.

If anything, at the time, I wasn’t worried enough about just how bad this could become. I wasn’t thinking about bank runs, particularly online instaruns. Now, I am. Because there’s nothing to stop these instant bank runs. Large depositors who are not covered by deposit insurance can, and do, move all their money in an instant when they smell trouble. The contagion is starting and there’s nothing the Fed or the Treasury can do to stop a serial meltdown. Non-subscribers, click here for access.

The markets have been remarkably sanguine about all this. But that that is in the process of changing. The debt ceiling is causing distortion right now as institutions shift the funds out of the durations where the greatest risk of default is perceived, and into those seen as less risky.
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Don’t Go Short if This One Thing Happens

Lee Adler

Market Bullback Was a Masterful Shakeout and Setup!

What’s a bullback? It’s a pullback where the bull herd just backs up and then charges.

A lot of traders were feeling vindicated in the pullback early last week, because the market “shouldn’t” be this high. But there are no “shoulds” in this business. There is only what “is.” And if the market xxxxxxxxx xxxx xxxxxx xxxxxx xxxxxxx , it will probably do a lot of things that most traders, particularly those of the bearish persuasion, think shouldn’t happen. So here’s what to beware of. 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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Swing Trade Chart Picks – The Future is One Word – Baking Soda

Lee Adler

For the 5 day period ended April 25, there were 73 charts with multiple buy signals as of the last two trading days of the period. There were 33 with a second sell signal. A little surprising considering the bloodbath on Tuesday. However, many of the buy signals were generated on Monday. Tuesday’s action negated many of those. Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

I would just caution that it has been months since the system has produced a string of winners, so I would not rely on these numbers as a market signal. Non-subscribers click here for access.

Rangebound markets produce a preponderance of whipsaw signals, which is why I call them  meatgrinders. Eventually the market will break out and trend for a while. Until then, the string of small losses is likely to continue. It’s a slow bleed that wears out both long and short traders. But it’s necessary to keep playing the game in order to catch the next big move when it comes. Non-subscribers click here for access.

Given the excitement of the selloff yesterday, I looked at the sell side output first. There were 4 charts early in the alphabetical order that I liked enough to put on the list starting with the opening print today. Non-subscribers click here for access.

On the buy side, while some would like more beans, Mr. Taggart thinks we’ve had enough. But there’s one stock that I’m adding for sentimental reasons. It’s CHD. Early in my career on Wall Street, in 1980, this stock was selling for the equivalent of around 20 cents a share, adjusted for splits. Over the next 45 years it gained 46,000%. In other words if you had bought $1000 worth of stock in 1980, today you’d have $4.6 million. For a company that makes baking soda, for gosh sakes. Respeck! Non-subscribers click here for access.

It’s a slow mover, but hey, maybe on the heels of this short term buy signal, this could be a core holding. What could be more defensive than baking soda? Let’s see what happens over the next 3-4 weeks. Throw in a little CLX and it could be explosive. LOL Non-subscribers click here for access.

Other than that, I’ll stay put there, with added or adjusted stops on several picks as shown on the table (subscriber version). 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.

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Gold’s Lost Luster Will Shine Again

Lee Adler

Gold’s 9-12 month cycle has topped out, which should lead to a down phase lasting until xxxxxxxxxxxxx. Long term bullish cycles should keep the down phase flat, but that could allow for a move as low as xxxx. 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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Enjoy the Market Mirage Now Because We’re Really In a Desert

Lee Adler

We did a comprehensive review of key liquidity drivers last week. It’s an important report for an overview of the forces that are at work here.

This week, I’ll just review the charts of the current data that I think is crucial to getting a grip on what to expect. For now, we’re in the midst of a mirage because markets are holding up ok. That’s due to one thing only, Treasury Bill paydowns that have pumped $120 billion into dealer and investor accounts over the past month. It’s not quite QE, because it’s not a direct injection into dealer trading accounts, but it’s enough to make the financial markets look like an oasis in the desert. Non-subscribers, click here for access.

Subscribers, click here to download the report.

It’s a mirage, and when it ends within the next xxxxx xx xxxxxx xx, the stench of death will punch us in the face. We’d better have our running shoes on. That means getting out at the first whiff that something ain’t right. Non-subscribers, click here for access.

We’re not there yet, and much depends on how the debt ceiling impasse plays out, and especially for how long it plays. Because once it is settled, that’s when reality will hit. This report explains how that will work, and when. Non-subscribers, click here for access.

Charts on US banking system data are based on data published on Friday evening for the week ended 9 days prior. In this case that’s April 12. They’re a week behind the Fed’s balance sheet data, which is posted on Thursday evening for the week just ended Wednesday. Ditto for the data on money market fund assets. Data on Treasury cash and tax receipts is virtually real time. It’s released daily, for the period ended the prior day. Fed RRPs are same day.Non-subscribers, click here for access.

Follow the charts of the real time data and stay a step ahead of everybody else.  Non-subscribers, click here for access.

Subscribers, click here to download the report.

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! 

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Why Not Get Too Excited About Bearish Proclamations… Yet

Lee Adler

Don’t get too excited about that Friday flop last week. Here’s why.

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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Swing Trade Chart Picks – Four More Buys, Four More Buys

Lee Adler

For the week ended April 19, there were 116 charts with multiple buy signals as of the last two trading days of the period. There were just 10 with a second sell signal. Again, I wasn’t impressed with the trend structures on the sell side.  So there were no picks again on that side. Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

On the buy side, I found 4 that look like they’re just getting started and I am adding those to the list, as shown on the table below. I will start tracking them as of today’s opening price. Non-subscribers click here for access.

5 existing picks hit stops over the last week. I will drop one long and one short as of the opening price today. I’ll leave the remaining longs on the list without stops. 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.

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Is Gold Still Ticking After This Licking?

Lee Adler

Gold is getting slugged this morning, confirming a downturn in the 13 week cycle. Ideally that should last until late May to late June. Here are the near term targets for this move. 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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The Fed’s Circle Jerk… Is ‘Twerking?

Lee Adler

The one thing the Fed is good at is putting out fires. They did it again this time. Stopping bank runs in their tracks, preventing what could have become an out-of-control conflagration. For now.

But it’s little more than a circle jerk. Yesterday’s firefighting will only lead to more fires down the road tomorrow. For now, it seems as though the joint action of the Fed, Treasury and FDIC has achieved the desired goal of stabilizing the banking system and the financial markets. The stock market has benefitted. And investors who had panicked into bonds are starting to see a bit of erosion of the capital they thought that they were committing to safety.

In short, here’s what happened and more importantly, what lies ahead because of it.Non-subscribers, click here for access.

Subscribers, click here to download the report.

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! 

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Here’s How This Week Will Show Whether Bulls or Bears are in Trouble

Lee Adler

The S&P 500 closed smack on the trendline drawn on daily closing prices extended from the August 2022 and February 2023 highs. An up week this week would break that trendline. The bulls would then be in charge. If the market sells off this week, bears would then have the ball. We might even consider shorting opportunities, if you can believe that.

But are there any tells that suggest which way this will break? Yes. 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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