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Swing Trade Screens – Plunging in on the Short Side

I am adding 8 shorts to the chart pick list this week.

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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.

Market Reaches Do or Die, Right Here

And that’s for both parties to the conflict. Bears could be in charge for a very long time if this breaks down. Bulls would gain only a foothold, nothing more. Here are the keys to the outlook.

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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. 

Start of Something Good for Gold

The 13 week cycle has turned up, but the 9-12 month cycle remains uncertain. Here’s what to look for to tell if this is more than another dead cat bounce.

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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. 

Look Out For the Real Fallout of Declining Withholding Tax Collections – Part 2

We track Treasury supply because Fed policy comprises only one side of the supply/demand equation. Treasury supply makes up the bulk of the other side. The information we have on Treasury supply is known, either in advance or at least in real time. Tax revenue is the primary determinant of changes in supply. We merely need to monitor the tax revenue trend, and legislation that affects the Federal Budget to get an idea where supply is headed in the near term.

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We’ve now seen xxx months of falling withholding tax collections. That’s a xxxxx, but it was mitigated in September by very strong quarterly estimated individual and corporate taxes. But those are lagging because they are based on the third quarter as a whole, not just September. Non-subscribers, click here for access.

On the other hand, excise tax collections were up, an indication of strong retail consumption. So that’s a fly in the ointment in terms of the idea that the economy is contracting. But it’s too small an item to matter to total revenue.   Non-subscribers, click here for access.

September revenues got a boost from quarterly estimated taxes, as always. We expected that. As a result, the Treasury paid down a significant amount outstanding T-bills during the month. Again, no surprise. But it certainly didn’t help the markets much. Maybe the Treasury market a little toward the end of the month. But if that’s all a “good” liquidity month can do, watch out for the next two months. Non-subscribers, click here for access.

The point is that September was as good as it gets, and as good as it will be, until xxxxxxx, when the xxxxxxxxx xxxxxxxx xxxxxxxxx xxxxxxx will again create a temporary budget surplus. That will be used to pay down T-bills again. But xxxxxxx xxxx xxxxxxxx will be a drought, with heavy Treasury supply, which would be made worse by weakening tax revenues. Non-subscribers, click here for access.

The Fed will exacerbate the problem with QT. It will tell the Treasury to redeem $60 billion a month of the Fed’s Treasury holdings. That’s an extra $60 billion a month in Treasury supply that the US government will need to issue so that it can repay the Fed. Investors and dealers will be forced to absorb that, because the Fed cavalry isn’t riding to the rescue to take up the bulk of supply.  Non-subscribers, click here for access.

The xxxx xxxxx months will be the worst supply demand imbalance we have seen so far in this bear market. I would expect both stock and bond prices to xxxx xxxxxxx xxxxxxxx xxxxxxx. Any rallies should be xxxxx xxxxx, and should xxxxx be xxxxxxxx xxxxxxxxxxx. Non-subscribers, click here for access.

Furthermore, xxxxxx the xxxxxx will continue to be a really bad idea, just as it has been all year, unless you plan on, and in fact do, xxxxxx the xxxxx. Non-subscribers, click here for access.

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Look Out For the Real Fallout of Declining Withholding Tax Collections

Federal withholding tax collections declined in September for the third straight month. Predicting the BLS jobs data is always a crapshoot, but after 3 months of real weakness in withholding taxes, this should be the month when reality catches up with the BLS.

But will the BLS report a decline, when the consensus is for a gain of 275,000 jobs? Not likely.

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But more importantly, declining revenue means more harsh reality for the Treasury market in the form of more supply than the TBAC had forecast that the Treasury would issue. We can’t project that indefinitely, but at least in the near term it means additional supply on top of already heavy forecast supply. Non-subscribers, click here for access.

And that has implications for the market, which I cover for you in these reports. Non-subscribers, click here for access.

9/3/22 But the fact is that if tax revenues are weakening, Treasury supply will only increase, regardless of what Wall Street says about the economy. Treasury supply will increase just as the Fed requires the Treasury to add $60 billion a month in new debt sales to the public to pay off the Fed. Non-subscribers, click here for access.

In addition to that extra supply from QT, and a weaker economy, the Fed is causing demand to weaken. Not only is  the Fed no longer the primary buyer and financing agent in the market, but it is also choking demand by removing the cash from the banking system that would otherwise be available to fund Treasury purchases. Non-subscribers, click here for access.

The accompanying weaker economic data will be spun as bullish, while in fact it will not be. At least at first. The bottom line is that the weaker tax revenues are not bullish. It will only be bullish when the Fed finally reverses policy. All I can say is, “xxxx xxxx xxxx!” Non-subscribers, click here for access.

Here’s how to view the data, and what it means for investment strategy and tactics. Non-subscribers, click here for access.

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Swing Trade Screens – Beware! This Swing is Old

For the week ended September 30, there were 19 charts with second or third buy signals on Thursday and Friday, and 35 with second or third sell signals. Bears still had an edge but it was slight, and turns often occur without warning, particularly as a swing ages. And this one is aged.

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On Friday on a standalone basis there were 13 buys and 9 sells. This is still nothing to get excited about for either side. Without a more lopsided advantage on both the multiple signal look, and the last day look, I want to tread lightly. This decline is already mature, and I’m concerned about a short covering spike, despite the lack of evidence. Non-subscribers click here for access.

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.

The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options. 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 July had been a narrowly rangebound meatgrinder market until last week. 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%. I would hope to continue that, but it is by no means a given. Non-subscribers click here for access.

June’s performance is not something we should expect to duplicate too often, if at all. The average weekly gain since I tweaked the methodology in mid January is just 1.29%, while trending upward lately. 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

After visually reviewing the charts of this week’s multiple buy and sell signals, I was underwhelmed on both sides. So I’ll stand pat and ride with what remains on the list after two picks hit their trailing stops last week. Non-subscribers click here for access.

The four remaining picks have gained an average of 4.7% on an average holding period of 7 calendar days as of today (Monday). The normal maximum number of picks is 12, so with 4 currently open, that implies just a 25% capital commitment with the rest assumed to be cash. Non-subscribers click here for access.

9/26/22 Would be nice to have had more shorts out, but with a schedule of only once a week, sometimes the swing trade turn gets missed, particularly when they happen on a V reversal. These are common at lows but rare at highs. Rare doesn’t mean never, however, and we got one two weeks ago. Non-subscribers click here for access.

But there’s something to be said for spending a few minutes a week on trading, rather than hours in front of a screen.  Life must be lived! Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

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.

Stocks Have Much At Stake Right Now

For example, it could be a stake in the heart depending on whether xxxx holds or breaks.

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The market is extremely weak and in some respects the technical are similar to when the Fed stepped in to save the market in March 2020. But stock prices didn’t begin to rally until 10 days after the Fed first intervened with massive cash injections. So we probably shouldn’t think about a bottom here until the Fed reverses course and pumps in enough cash to make a difference. Non subscribers click here to access.

Unlike in 2020 however, this would be a policy 180. Back then, the Fed was already in a program of “enhancing” the market with QE. It just massively expanded it. I cover these issues in the Money Trends reports. Non subscribers click here to access.

In view of that context, any  readings of extreme technical weakness might be the precursor to a xxxx xxxx xxxx xxxx rally, but there’s no reason to be xxxxxx xxxx stocks yet. On the other hand, it’s a little late in this move to be xxxxxx xxxxxxx xxxxxxxxx on a swing trade basis. For nimble scalpers, I’d call it a “maybe.” Non subscribers click here to access.

Cycles-  By one count, the 10-12 month cycle could be at a low, with a potential to turn up for a few months. However, a breakdown below xxxx would suggest that this cycle is early in a down phase, projected to last until at least next xxxx. That would imply the likelihood of much lower prices over the next xxx months. Non subscribers click here to access.

There’s a tentative 6 month cycle projection of xxxx-xxxx. Non subscribers click here to access.

A 4 week cycle low is due xxxx xxxx, at just xxxxxxx xxxxxxxx xxxxxxxx. If the market bounces early in the week, that scenario is in play. But if the 6-7 week variant is dominant, this week will get xxxxx xxxxx xxxxxxx xxxx. That cycle has a projection of xxxx, with the expected low in the last xxxx xxxxx xxxxxxx. Non subscribers click here to access.

The 13 week cycle remains in a xxxxxxxxx window, with a projected low of xxxx-xxxx. With liquidity scarce, there’s potential for a vicious bounce driven by short covering at any time. But the question is whether it will come from this xxxx-xx area, or equally likely xxxx. Non subscribers click here to access.

Third Rail To break the 2 steepest downtrend channels the SPX would need to end this week above xxxx. The top line of the third channel will be at xxxx on Friday. Non subscribers click here to access.

There’s a support convergence around xxxx at midweek. That’s a likely short term pivot area. If it breaks instead, the next target would be xxxx. And if that broke, we’d be looking for xxxx as the next likely target. Non subscribers click here to access.

Long Term Weekly Chart –  The support convergence at xxxx now looks critical. The next target would be xxxx-xxxx if that breaks. Non subscribers click here to access.

Monthly Chart –  SPX has broken long term trend support and is now targeting xxxx-xxxx either by the end of October. The xxxx range should now be resistance. Non subscribers click here to access.

Cycle Screening Measures – Cycle screening measures plunged to extremes but suggest the possibility of xxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxx ahead for at least several more weeks. 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. 

Gold Reason to Hope No Reason for Optimism

Gold rebounded after hitting trend support. There’s regularly been an 8 week cycle pattern over the past year, and this fits that bill. The 13 week cycle projection has been reached. But the burden of proof is on the bullish case until gold clears xxxx. Otherwise the downtrend will remain in force, and we can expect lower lows.

Subscribers, click here to download the report.

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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. 

Swing Trade Screens – Getting Shorter, Life Must be Lived!

As of the week ended Monday, September 26 closing prices, there was only 1 chart with second or third buy signals over the past two trading days, and 53 with second or third sell signals. That compares with 64 multiple sells at the end of the week before. For the week, the bears still had it, but that can turn on a dime. On Monday on a standalone basis there were 9 buys and 9 sells. Nothing to get excited about for either side.

Technical Trader subscribers click here to download the complete report.

Non-subscribers click here for access.

The scoreboard for September so far, excluding the two picks still open (+10.5% avg.), shows an average gain of 3.4%, on an average holding period of 15 calendar days. All of the 16 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.

After visually reviewing the charts of this week’s multiple buy and sell signals, I found the one buy signal uninteresting. Non-subscribers click here for access.

On the sell side, there were quite a few that appeared to have a little running room to the downside, but too little before reaching support. I skipped over those. Ultimately there were 4 that I liked enough to add to the list on the short side. They were xxxx, xxxx, xxxx, and xxxx. Do we notice a theme there? The charts are posted below. Non-subscribers click here for access.

With the 15% exposure that I theoretically committed on the existing picks, adding these 4 would bring me to a commitment of about 45% of my trading capital, with the other 55% in cash. Non-subscribers click here for access.

The two existing picks have gained an average of 10.5% on an average holding period of 8 calendar days as of today. Non-subscribers click here for access.

Would be nice to have had more shorts out, but with a schedule of only once a week, sometimes the swing trade turn gets missed, particularly when they happen on a V reversal. These are common at lows but rare at highs. Rare doesn’t mean never, however, and we got one two weeks ago. Non-subscribers click here for access.

But there’s something to be said for spending a few minutes a week on trading, rather than hours in front of a screen.  Life must be lived!  Non-subscribers click here for access.

For  this week, I’m adding 4 picks on the short side as of Tuesday’s opening print. I have added trailing stops to the two existing picks to take them out automatically if the stops get hit. The 4 new picks will have no stops for the first week to give them some breathing room. Diversification will provide some cushion if one of them goes haywire against us.  Non-subscribers click here for access.

The screen results come from a universe of approximately 1200-1500 stocks daily that meet the criteria of trading above $6.00, and with average volume greater than a million shares per day.  I start the weekly process by screening for daily buys and sells from the previous Friday through Thursday. I then rescreen that output, for additional signals in the progression on Thursday and Friday.

The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.

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 July had been a narrowly rangebound meatgrinder market until last week. 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%. I would hope to continue that, but it is by no means a given. Non-subscribers click here for access.

June’s performance is not something we should expect to duplicate too often, if at all. The average weekly gain since I tweaked the methodology in mid January is just 1.29%, while trending upward lately. 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.

Stock Market in Crash Mode

The market is in crash mode. That doesn’t guarantee a crash. It merely suggests that conditions are as favorable as they get for one to occur. The crash window will remain open through the xxxxxxxxxx xxxxxxxxxx. Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

Non subscribers click here to access.

Cycles-  The 4 week cycle projection of xxxx suggests as much. The 6-7 week cycle has joined the down phase, but it’s too early for a projection on that. Non subscribers click here to access.

The 13 week cycle is in a bottoming window, and its projection has been hit. I’d expect xxxxx xxxxxxxx xxxxxxxxxx xxxxxxxxxx from that. Non subscribers click here to access.

Third Rail The market is heading for support indicated around xxxx and xxxx. If those levels give way, the target could be major trend support around xxxx. Non subscribers click here to access.

Long Term Weekly Chart –  The support convergence at xxxx now looks critical. The next target would be xxxx if that breaks. Non subscribers click here to access.

Monthly Chart –  SPX has broken long term trend support and is now targeting xxxx xxxx either by the end of this month or October. The xxxx range should now be resistance. Non subscribers click here to access.

Cycle Screening Measures – Cycle screening measures plunged to extremes but suggest the possibility of additional severe weakness ahead until xxxx xxxxx .Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

Non subscribers click here to access.

 

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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