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The Iron Pyrite Trade

Lee Adler

Gold has lost its shine, and it looks to be dull for a while. The 10-12 month cycle projection of xxxx(subscriber version) has been hit. Another attempt to reach that level may or may not lie ahead over the next two months, but it is unlikely to be topped for many months to come. In the near term, opposed cycles are likely to lead to more xxxx xxxx xxxx.

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A weekly close below xxxx (subscriber version) would invalidate the implications of the breakout.

A long term cycle high is due in xxxx.

Swing Trade Screen Picks -Over the week ended April 4, 42 charts of the 52 mining stocks that I track had at least one buy signal. 20 had at least one sell signal. So there were several whipsaw charts with signals on both sides. This is typical of a consolidation phase.

The signals anticipate swings of 3-5 weeks. But when a market or sector is rangebound, there are lots of whipsaw signals. This is why it’s necessary to look at the charts for the overall pattern.

I rescreened the stocks that had at least one buy signal over the first 4 days of the period, for repeat buy signals on Friday and Monday. There were 29. There were 9 repeat sell signals. Overall that’s bullish for the short term outlook for the group.

However, when I looked at the charts, I was disappointed. While there were plenty of short term buy signals, the intermediate term cycle structures weren’t great. In fact, they were troubling. Try as I might, I only found one chart that liked enough to add to the list. That goes along with the one that wasn’t stopped out last week, to leave us with only two long picks. If the sector takes off, we’ll have a toe in the water, but not a full load. On the other hand, if it tanks, we won’t get hurt.

Table and charts below (subscriber version).

Subscribers, click here to download the report.

The strategy and tactics suggestions in this report are for informational and entertainment purposes, and illustrative of one approach. Nothing in this report is meant as personalized investment advice and you should not construe it as such. No representation is made that it is the best approach, will be profitable, or suitable for you.

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Holding Longs, Adding Shorts

Lee Adler

Last week’s daily screens tilted away from the buy side and toward the sell side for a second straight week. The final score for the week was 254 Sells to only 45 Buys. The previous week it was 122 to 51, Sells over Buys.   Prior to that, the balance had consistently tilted to the buy side since March 4.

3/28/22 The preponderance of sell signals last week suggests that it’s time for a consolidation, at least. However, when I reviewed the final screen of the week’s previous signals, I didn’t see anything I liked as a short sale.

This weekend was a different story. I found 4 charts that I liked enough to add to the list as short sales.

Technical Trader subscribers click here to download the complete report.

On Friday, April 1 alone, there were 10 buys and 46 sells, despite a bit of a recovery in the market averages.

The screen results come from a universe of approximately1200-1500 stocks daily that meet the criteria of trading above $6.00, and with average volume greater than a million shares per day. The final numbers show the number of stocks with at least one buy signal or sell signal during the week.

I start the weekly process by screening for daily buys and sells from Monday through Thursday. I then rescreen that output, for additional signals in the progression on Thursday and Friday. The final lists resulted in zero chart pick candidates on the buy side and 26 on the sell side.

I found that surprising, but I’ve learned not to argue with the numbers. Most of the time they foreshadow what’s coming pretty accurately.

I reviewed the charts from the final output visually. From that review, I chose 4 shorts to add to the list (subscriber version only).

Adding those picks this week leave the list with 5 open buys and 4 shorts. It suggests a transitional or mixed market without a strong trend.

Last week we started with 8 picks on the list. All were buys, no shorts. Three picks hit their stops and were closed as of the stop price. Including those and the picks still open at the end of the week gave us average gains of 3.4% with an average holding period of 10 days. That compared with an average gain of 2.0% and average holding period of one week in the previous week.

The week before saw an average gain of 5.3% with an average holding period of two weeks. This was with mostly longs. The week before that saw an average gain of 10% on an average holding period of 19 calendar days. That was with all shorts. So the screening method reversed positions right on time, in going from short to long.

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

The new picks, along with picks that remain open, and those closed out last week, are shown on the table below (subscriber version only). Charts of new and open picks are below that.

Technical Trader subscribers click here to download the complete report.

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Market Still in “Fool The Majority” Mode

Lee Adler

Cycles – The 6 month cycle has is in an up phase, ideally due to top out xxxx xxxx (subscriber version).

Short term cycles and the 13 week cycle may have peaked, but there’s no sign yet of a xxxx xxxx (subscriber version). The down phases could xxxx xxxxxxxx  xxxxxxxx xxxx in the 6 month cycle up phase. The S&P would need to drop below xxxx to turn the down phase into something more damaging.

Technical Trader subscribers click here to download the complete report.

Third Rail Chart –  Friday’s rebound may have set up a new uptrend channel. A down day Monday would invalidate that thesis, but a solid up day would confirm it.

If the verdict is down, the first place to look for support would be around xxxx. The deeper such a move would go, the more likely it would be to be a resumption of the primary downtrend.

On the other hand, a rally through xxxx would reaffirm the meltup, which would then probably target a full test of the December high.

Long Term Weekly– The February-March lows appear to have been a two year cycle low. That only tells us that an up phase is due. It does not tell us the absolute direction of that up phase. That depends on the longer cycles.

The 3-4 year cycle is in a top phase, but it still has an unmet projection of xxxx (subscriber version) that can’t be ruled out until the top breaks down. That would require a weekly close below xxxx.

A 7 year cycle top is due this year in a projection range of xxxx– xxxx. It’s not yet possible to say whether the top is complete or a new high is still on the docket.

Monthly Chart – The mid March rebound has formed another equal width uptrend channel. Its lower line is around xxxx in March and xxxx in April. Resistance is around xxxx in March and xxxx in April.

Cycle Screening Measures – The cycle screening aggregate signals weakening short term momentum, but xxxx (subscriber version) for the intermediate term. The same is true for the 6 month cycle measures, the 29 day MA, and the cumulative line.

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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. 

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Why March Withholding Taxes Showing Red Hot Economy Is Bearish

Lee Adler

Federal tax collections were exceptionally strong for the full month in March, including withholding taxes in particular. The jobs gains reported by the BLS, were, if anything, understated.

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You may think that this strong economic data is good news for the markets. But it’s not. A red hot economy will continue to feed raging inflation. The Fed will have no choice but to continue tightening policy.

The markets will get a xxxx xxxx xxxx (subscriber report) thanks to seasonal Treasury paydowns in April and May, but after that, the tightening monetary conditions should have devastating effects on xxxx xxxx xxxx. Therefore, rallies in stocks and bonds into mid May will continue to be xxxx xxxx xxxx.

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Gold Can’t Hold

Lee Adler

Short term and 13 week cycle projections point to a low around xxxx (subscriber version).  . Short term cycle lows are xxxx . The 13 week cycle low is ideally due at any time between xxxx xxxx xxxx.

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A weekly close below xxxx (subscriber version) would invalidate the implications of the breakout.

A long term cycle high is due in xxxx.

Swing Trade Screen Picks – Over the 6 trading days ended March 28, 39 charts of the 52 mining stocks that I track had at least one buy signal. 34 had at least one sell signal. So there were plenty of whipsaws. This is typical of a consolidation phase. The signals anticipate swings of 3-5 weeks.  But when a market or sector is rangebound, there are lots of whipsaw signals. This is why it’s necessary to look at the charts for the overall pattern.

I rescreened the stocks that had at least one buy signal over the first 5 days of the period, for repeat buy signals on Friday and Monday. There were 20.  There were 13 repeat sell signals. Overall that bodes well for holding the current long picks. However, when I reviewed the 20 buys, the structures were poor. I didn’t like any of them enough to add to the list. It was not encouraging for the broad view.

There’s a dynamic tension here that’s familiar to those of us who have watched markets for a long time. Rarely are the charts cut and dried. “We pays our money and takes our chances.”

Likewise the picks from last week are not off to a good start. I’ve added stops, and now it’s holdin’ and hopin’ time. There are only 3 picks, and if they hit their stops, the losses will be modest.

3/14/22: I would expect a consolidation or correction and would be less aggressive about adding buys to the list for the next couple of weeks.

Table and charts below (subscriber version).

Subscribers, click here to download the report.

See analysis, table of picks and charts (subscriber version).

The strategy and tactics suggestions in this report are for informational and entertainment purposes, and illustrative of one approach. Nothing in this report is meant as personalized investment advice and you should not construe it as such. No representation is made that it is the best approach, will be profitable, or suitable for you.

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Fragile and Dangerous Semi Blind Spot

Lee Adler

This report shows the imbalance of Fed liquidity driven demand and the coming short term liquidity boost from seasonal Treasury paydowns. However,  I’ve added something to this report that makes clear just how dangerous this market is.

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Banking data shows us the growing fragility of the system. Given that fragility, any seasonal liquidity driven rally in stocks and bonds will be a gift to those who have been holding and hoping. It will be yet another chance to get out. This report lays out the timing of that liquidity surge, and the likely impact on the markets. Non-subscribers, click here for access.  

The rally has already begun in the stock market. It could see a bit of a shake over the next week or so, but with massive Treasury paydowns on the way, I don’t expect the rally to be derailed yet. So I’m willing to give my buy side swing trade picks featured in the Technical Trader more running room here. They’re doing well. I expect that to continue.

Of course, bonds haven’t rallied in the past couple of months. Instead, they’ve crashed yet again. But the conditions will be ripe for a reaction rally in the Treasury market and related fixed income markets starting next month. This report lays out the likely timing and yield parameters of the next move in bonds. If I owned any bonds, here’s what I would do.

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Subscribers, click here to download the report.

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Screens Be Nimble, Screens Be Quick – They Were!

Lee Adler

When I ran the data the raw daily totals for last week, there was a surprise. They ended with a solid edge to the sell side. The final score for the week was 122 to 51, Sells over Buys. The week before, buys had a solid edge, 185 to 71. That compared with 187 to 146 Buys over Sells, the week before that. Buys also led three weeks ago. The balance had been consistently tilted to the buy side since March 4.

Technical Trader subscribers click here to download the complete report.

The preponderance of sell signals last week suggests that it’s time for a consolidation, at least. However, when I reviewed the final screen of the week’s previous signals, I didn’t see anything I liked as a short sale.

The screen results come from a universe of approximately1200-1500 stocks daily that meet the criteria of trading above $6.00, and with average volume greater than a million shares per day. The final numbers show the number of stocks with at least one buy signal or sell signal during the week.

On Friday, March 25 alone, there were 23 buys and 25 sells. It seems to contradict the gain in the market averages Friday, but it’s narrow enough and small enough to indicate that it’s merely a function of the fact that the buy train has left the station. It’s not a sign that the train has reached the end of the line.

I screened the lists of previous daily buys and sells from Monday through Thursday. From that ouput, I looked for additional signals in the progression on Thursday and Friday. The final lists resulted in 12 chart pick candidates on the buy side and 15 on the sell side. I reviewed those visually, and also looked at final signals triggered the week before.

After reviewing those charts, I chose 3 to add to the list (subscriber version only). All were on the buy side. This string of all buys is now 3 weeks old. That’s a shift from the prior 3 months when all picks were on the short sale side.

Adding those buys this week leave the list with no open shorts and 8 buys.

Last week we started with 7 picks on the list. There were two shorts and the rest buys. The shorts hit their stops with small losses. Including those and the picks still open at the end of the week gave the list average gains of 2.0% with an average holding period of a week.

The week before saw an average gain of 5.3% with an average holding period of two weeks. This was with mostly longs. The week before that saw an average gain of 10% on an average holding period of 19 calendar days. That was with all shorts. So the screening method reversed positions right on time, in going from short to long.

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

The new picks, along with picks that remain open, and those closed out last week, are shown on the table below. Charts of new and open picks are below that.

Technical Trader subscribers click here to download the complete report.

 

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Here’s Why This Will Be “The Rally that Fools the Majority”

Lee Adler

At the beginning of most great bear markets, there’s invariably a big rally that convinces most that the bull market is still running. Then the market tops out a little below or above the last market peak, rolls over, and proceeds to drop in a series of stairsteps that lasts from 12 to 30 months.

Those are real, grinding bear markets. We haven’t had one of this since 2007-09, because every time one threatened, the Fed intervened to re tilt the playing field. It probably can’t do that this time, because of the entrenched high inflation.

Technical Trader subscribers click here to download the complete report.

Joe Granville called that last rally, “the rally that fools the majority.” There are signs that this could turn into just that. I’ve been posting long side trades for a couple of weeks. It looks as though we can stay with them xxxx xxxx (subscriber version). Xxxx xxxx xxxx xx xxxxx reverse that strategy.

Cycles –   The 6 month cycle has clearly entered an up phase, ideally due to top out xxxx xxxx (subscriber version).

In that context, up phases in shorter cycles should continue xxxx xxx xxx xxxx (subscriber version) next few days. The 13 week cycle high is ideally due by xxxx xxx at a projection of xxxx. But its indicators are positioned for an extended up phase, so I wouldn’t marry that xxxx xx date.

6-8 week cycles are due to peak xxxx xxx xxx with a projection range of xxxx-xxxx. The 4 week cycle is ideally projected to top xxxx xx xxx  in the xxxx-xxx area.

Third Rail Chart –  The lower line of the wider meltup channel starts the week at xxx on Monday and rises to xxxx on Friday. The meltup will remain intact for as long as that line remains unbroken.

Intermediate trend downtrending resistance starts the week at xxxx and descends to xxxx on Friday. If cleared, the SPX will then target apparent resistance around xxxx.

Long Term Weekly- For now, I must assume that this is a bear market rally. But if it clears the long term trendline around xxxx this week, that view could change. That would call for a tactical adjustment in trading.

Monthly Chart – The mid March rebound has formed another equal width uptrend channel. Its lower line is around xxxx in March and xxxx in April. Resistance is around xxxx in March and xxxx in April.

Cycle Screening Measures – The cycle screening aggregate stayed pinned at a high level all week. This remains bullish for both the short term and intermediate market trend.

Technical Trader subscribers click here to download the complete report.

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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. 

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Give It To Me One More Time, Goldie

Lee Adler

Short term and intermediate cycles are in gear to the downside, but the 9-12 month cycle remains due for one more upleg to a new high of xxxx by xxxx xxxx  (subscriber version).

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The high base breakout on long term charts that we’ve been looking forward to is essentially complete, and confirmed by a breakout in long term momentum. The initial conventional measured move target is xxxx (subscriber version).

A long term cycle high is due in xxxx.

In the miners, over the  week ended March 18, 14 charts of the 52 mining stocks that I track had at least one buy signal. 42 had at least one sell signal, which means that some whipsawed. These are for swings of 3-5 weeks.

This was the second consecutive week with a majority of sell signals, indicating that the corrective phase that we expected is still under way.

I rescreened the stocks that had at least one buy signal between Monday and Thursday, for repeat buy signals on Thursday and Friday. There were 3. Call me crazy, but I liked all 3 charts enough to put them on the list. They are shown on the table below (subscriber version)..

Over the past week, we started with 2 open selections. They hit their trailing stops and were closed as of that price. The  average gain was 13% with an average holding period of 38 calendar days.  Over the past 3 months including these two, there were 12 picks. 10 were closed with a theoretical profit. Overall, the average profit of the 12 picks was 8.9% with an average holding period of 27 calendar days.

Wouldn’t it be nice if we could annualize that? But we can’t. Our picks are buy side only, and the market often goes months without giving any buys. So it’s difficult to produce consistent profits.

So this week we start anew with 3 picks. No stop prices in the first week. We pays our money and takes our chances, at least at the outset.  Table and charts below (subscriber version).

Subscribers, click here to download the report.

See analysis, table of picks and charts (subscriber version).

The strategy and tactics suggestions in this report are for informational and entertainment purposes, and illustrative of one approach. Nothing in this report is meant as personalized investment advice and you should not construe it as such. No representation is made that it is the best approach, will be profitable, or suitable for you.

Subscription Plans

Try Lee Adler’s Gold Trader risk free for 90 days!

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Screens and Picks Keep Buy Side Tilt

Lee Adler

The raw daily data for last week ended with a solid edge to the buy side. The final score for the week was 185 to 71, Buys over Sells. That compared with 187 to 146 Buys over Sells, the week before, and 188-153 in favor of Buys the week before that. The balance has been consistently tilted to the buy side since March 4. We were forewarned, but suspending disbelief was my psychological obstacle. Ideally, I would have gone with more buy picks last week, instead of just a lonely, one.

Technical Trader subscribers click here to download the complete report.

The screen results come from a universe of approximately1200-1500 stocks daily that meet the criteria of trading above $6.00, and with average volume greater than a million shares per day. The final numbers show the number of stocks with at least one buy signal or sell signal during the week.

On Friday, March 18 alone, there were 21 buys and 10 sells. This tilt supports the strategy of staying mostly on the buy side for now.

I screened the lists of previous daily buys and sells from Monday through Thursday. From that output, I looked for additional signals in the progression on Thursday and Friday. The final lists resulted in 9 chart pick candidates on the buy side and 3 on the sell side. I reviewed those visually, and also looked at final signals triggered the week before.

After reviewing those charts, I chose 4 to add to the list (subscriber version only). All were on the buy side. This is a shift from the past 3 months when all picks were on the short sale side until last week. This will leave the list with 2 open shorts, both REITs, and 5 buys.

Last week we started with 7 picks on the list. One was a buy; the rest were short sales. 4 of them hit their trailing stops, and were closed out from the list as of that print. Including those and the picks still open at the end of the week gave us average gains of 5.3% with an average holding period of two weeks. Not bad, but a bit of giveback from the record 10% on an average holding period of 19 calendar days the week before. The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.

Had I been able to suspend my disbelief that the market might be turning, I would have added more buys last week. But the psychological stumbling blocks still remain, after all these years.

The new picks, along with picks that remain open, and those closed out last week, are shown on the table below (subscriber version only).

Charts of new and open picks are below that

Technical Trader subscribers click here to download the complete report.

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.

These picks are illustrative and theoretical. Nothing in this report is meant as individual investment advice and you should not construe it as such. Trade at your own risk. 

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