Liquidity Trader

Suddenly the whole technical picture looks bullish. It makes me think that they’ve repealed Rule Number One.

But they haven’t of course. There may be enough technical momentum to keep the rally going for a bit longer, and cycle projections point that way. But ultimately, the reality of ever tightening liquidity must prevail.

The question is when. Cycle analysis says be on the lookout at any time over the next 7 weeks.  If all goes according to Hoyle, we will be able to read it in the technical indicators.

Here are the current price and time projections for where to look for the highs to develop.

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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. 

A number of technical signs say that the bulls have the upper hand here. But those signs aren’t uniform. And I don’t trust them because they violate the First Commandment of Investing. Thou shalt not fight the Fed. Prepare to meet thy maker if thou dost.

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Cycles-  Multiple cycles look to be headed in xxxxxxx xxxxxxxxx over the next few months. xxxxxx the probability of a near term breakout xxxxxx xxxxxxx xxxxxx xxxxxx. Non subscribers click here to access.

The 10-12 month cycle has ideally entered a xxxxx phase lasting through December. Any strength this week would indicate xxxx xxxxxx xxxxxx that could carry back to the xxxxx-xxxxxx range before a xxxx in this cycle. Non subscribers click here to access.

On the other hand, any xxxxxx xxxxxxxxxxx this week would suggest that this cycle is topping out now. Non subscribers click here to access.

Meanwhile, 6 month cycle indicators are on the razor’s edge of confirming that xxxxxx xxxxx xxx x xx. Any xxxxxx this week should trigger clear xxxxxxx signals. Non subscribers click here to access.

Long Term Weekly Chart –   A weekly close above xxxx would break the 6 month cycle line, signaling an up phase in that cycle, with an initial target of around xxxx on this chart. Failure to be clear of xxxx at the end of the week would suggest that the 6 month cycle down phase remains intact. Non subscribers click here to access.

Monthly Chart –   Trend resistance will begin November at xxxx, after it appears that the SPX will end October above expected resistance around xxxx. Non subscribers click here to access.

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. Non subscribers click here to access.

Cycle Screening Measures –  The cycle screening aggregate plunged into negative territory, but it did not break the bullish short term or intermediate term patterns. The market would need to weaken further this week for that to happen. None of the negative divergences have formed that typically precede a significant downturn and moving average and cumulative versions of these indicators remain mildly bullish.  Non subscribers click here to access.

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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. 

It happens. Signals whipsaw, particularly in rangebound markets that I refer to as meat grinders. This has been one of those.

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The last set of sell signals was wrong. I went with them wholeheartedly, and digging out has proven to be problematic, with a string of losses that wiped out a month’s worth of gains. I’m still trying to right the ship here, but recovery has been elusive so far. So I am proceeding with caution in looking at this week’s output. Non-subscribers click here for access.

For the week ended October 31, there were 51 charts with second or third buy signals on Thursday, Friday and Monday, and 39 with second or third sell signals I visually reviewed the charts, in both groups, and saw mostly rangebound whipsaw signals. While some of the shorts seemed to have a little running room, the setups weren’t ideal for big moves, so I demurred on those. Non-subscribers click here for access.

There were 4 charts that I liked enough on the buy side to add to the list. I added those without stops. That will leave us with 8 picks, including 2 shorts and 6 buys. Non-subscribers click here for access.

Meanwhile I closed out 14 picks on the short side last week mostly by hitting stops with a few that I had set to trigger as of the opening price last Monday. The end result, including 3 picks left open, was an average loss of 4.9% on an average holding period of 12 calendar days. Non-subscribers click here for access.

All picks close out last week along with open and new picks picks are shown on the table below with charts following. I adjusted stops on open picks as shown. Non-subscribers click here for access.

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10/3/22 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. 

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 In July … 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%. 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. 

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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.