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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.

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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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Dog Market Gets the Zoomies

Lee Adler

I have determined that this is no longer a bull market. But neither is it yet a bear market. It’s one of the rarest of rare markets in technical analysis. It is a dog market. And it has the zoomies. It will chase around wildly, but not really go anywhere. This could last for a couple of months.

Technical Trader subscribers click here to download the complete report.

Cycles –  The “weak” 13 week cycle up phase morphed into a meltup, but is still due to top out within  xxxx xxxx (subscriber version).. A new cycle projection points to a target of  xxxx xxxx. If it stops there, or doesn’t get there, the downtrend in the 10-12 month cycle wave would still be intact. However, short term cycle projections point to  xxxx – xxxx.

There are signs that the 10-12 month cycle has bottomed, but this cycle has been dormant, so I am not giving these signs much weight yet.

The 6 month cycle has entered an up phase. The next cycle high is due in  xxxx xxxx  (subscriber version). It’s too soon to tell what shape the up phase will take, but not too soon to say that significant downside is xxxxxx before the summer.

Third Rail Chart – The bottom of a meltup channel rises from around 4300 to 4450 this week. If the SPX stays above that, the meltup remains in force. If it breaks, then look for support between  xxxx and xxxx (subscriber version). Downtrending resistance starts the week at xxxx and descends to xxxx on Friday.

Long Term Weekly-  Parallel channel resistance is around 4460 this week. Break that, and the target would then be xxxx(subscriber version), with room to run to xxxx if that’s broken.

Monthly Chart – The mid March rebound has formed another equal width uptrend channel. Its lower line is around xxxx (subscriber version) in March and xxxx in April. Resistance is around 4650 in March and 4700 in April.

Cycle Screening Measures – The cycle screening aggregate has had a momentum thrust. These almost always mean higher prices to come. The short term and intermediate patterns are now both xxxx (subscriber version). The all-important six month cycle measures are now strongly xxxx. Smoothed measures are lagging and have not yet confirmed the turn. However, they could catch up if the rally continues early in the week.

Technical Trader subscribers click here to download the complete report.

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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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Seven and a Half Weeks of Bullish Liquidity Ahead

Lee Adler

It’s the most bullishful time of the year. The annual corporate tax windfall just hit the US Treasury cash account this week. Individual annual and quarterly estimated taxes will hit on April 18. The Treasury’s coffers will be stuffed with cash, and they will use it to pay down T-bills. They already have begun.

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Treasury supply is currently nil on a net basis thanks to big T-bill paydowns over the past week. At the same time, it’s the Fed’s MBS settlement week. Cash is pouring into Primary Dealer Accounts, to the tune of $119 billion this week. $77.5 billion of that already hit on Monday, March 14, and $14.9 billion hit on Thursday, March 17. The rest comes Monday March 21. Pump that much cash into dealer accounts in a few days, with no Treasury supply to be absorbed, and we see the results, a big pop in stock prices.

But they continue to sell bonds.

The markets should experience a hit at the end of March from the downward price pressure of Treasury coupon supply issuance, while the Fed is doing nothing, which suppresses demand. But then a real tidal wave of cash flowing into the market will start in mid April, when individual tax collections come in to the US Treasury, and that should give both the stock and bond markets a boost.

After that, things will get really bad.

This report tells you what to expect, when to expect it, and shows you exactly why (subscriber version).

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FREE REPORT – Proof of How QE Worked – Fed to Primary Dealers, to Markets, To Money will help you understand why going in reverse will be a disaster.

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Gold Holdings Consolidated

Lee Adler

Short term cycles have entered down phases and cycles up to 17 weeks are due for a down phase. A consolidation is due before a likely higher high around a projection of 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, short term cycles weakened but remained with the two longer cycles on the plus side. The 13 week and 6 month cycles are still near maximum strength. In past bull phases such conditions have lasted for weeks at times. Normally, negative divergences in these numbers would precede price peak in the sector. The weakening short term numbers suggest xxxx a xxxxxxxxxxxxx xx xxx (subscriber version).

Over the  week ended March 11, 27 charts of the 52 mining stocks that I track had at least one buy signal. 40 had at least one sell signal, which means that many swung both ways. These are for swings of 3-5 weeks.

The plurality of sell signals suggests that the rally has run out of steam and needs a rest. I would expect a consolidation or correction and would be less aggressive about adding buys to the list for the next couple of weeks.

I rescreened the stocks that had at least one buy signal from the first part of the week, for repeat buy signals on Thursday and Friday. There was only one, and I wasn’t interested. I added no new picks this week, given the increase in sell signals, plus the additional reason I noted last week. It’s time to step aside.

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

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Our Chart Picks Posted Record Gains Last Week

Lee Adler

Last week we had 8 picks on the list, all shorts. 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 10% on an average holding period of 19 calendar days. The percentage gain is based on 100% cash positions, with no margin and no use of leverage or options.

This is the best list performance since I began this experiment in 2017. The prior week saw an average gain of 3.3% on 15 picks with average holding period of 10 calendar days.

Previous “best” performances have been a sign to close out, but I will follow the discipline here of merely adjusting trailing stops on the 4 remaining picks. This week I am adding 3 new picks to the list (subscriber version only).

Technical Trader subscribers click here to download the complete report.

The raw daily data for last week ended with a slight edge to the buy side. The final score for the week was 187 to 146 Buys over Sells. That compared with the prior week’s 188-153 in favor of buys.

This is 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.

The slight edge to the buy side over the past two weeks has not yet been enough to turn the market. It will take much more of a tilt than this to get anything going on the upside. These signals suggest that a choppy rangebound trend remains in force.

On Friday, March 11 alone, there were just 23 buys and 17 sells. Those are low numbers supporting the choppy trading range thesis.

I screened the lists of previous daily buys and sells for the first part of the week, looking for additional signals in the progression on Thursday and Friday. The final lists resulted in 20 chart pick candidates on the buy side and 7 on the sell side. I reviewed those visually. Despite the plurality of buys, the trend structures were weak. There were few setups that looked like good entry points. On the other side, most of the sell candidates were extended near support.

After reviewing all 27 charts, I chose 3 to add to the list, two shorts, and one buy. This was the first buy since one lonely buy on December 6. Other than that, all picks have been on the short side since then. That will leave the list with 6 open shorts and one buy.

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.

The picks that remain open, and those closed out last week are shown on the table below  Charts of 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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Weakening Cycle Patterns in Stocks Portend Worse to Come

Lee Adler

Cycles – The 6 month cycle should be in a xxxx xxxx xxxx (subscriber version). Here’s why the next low could entail a short term crash.

The 10-12 month cycle projection now points to xxxx (subscriber version), but there’s still room for it to shift over the next 2 months. Indicators for that cycle are at new lows. A potential positive divergence from the market averages has been obliterated.

Technical Trader subscribers click here to download the complete report.

Short term cycle projections now point to xxxx-xxxx (subscriber version), with lows due between now and the end of March.

Third Rail Chart – Trend resistance begins at 4290 on Monday, descending to 4275 and/or 4240 on Friday. If they clear those, then the next resistance zone and target would be the xxxx-xxxx (subscriber version) area.

On the downside there are multiple support lines from 4200 to 4175 this week, with rising long term channel support at 4150. If xxxx (subscriber version) is broken, it’s game over for the bulls.

Long Term Weekly– Long term cycle momentum has joined 3-4 year cycle indicators in signaling a likely bear market.

Monthly Chart – The market now looks unlikely to return to the uptrend channel. Trend support is around xxxx in March. Long term momentum is on a preliminary sell signal.

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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Get Ready For Serial Market Crashes

Lee Adler

The last time we looked at the Composite Liquidity Indicator (CLI), 4 months ago, I warned that the process of flattening the indicator was beginning, and that that would lead to bad things happening. Those bad things have been under way for a couple of months, but they have barely scratched the surface of the potential of what’s to come as this line turns flat. See chart (subscriber version).

The stock market is approaching the low side of its normal band of motion from the CLI. If history is any guide, the stock market will remain vulnerable to further severe declines until a week or two after the line representing the S&P 500 penetrates the bottom of the normal range of motion from the liquidity line.

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Then we face the prospect that liquidity could be even tighter than during the period of October 2017 to September 2019 when the Yellen Fed was temporarily “normalizing” its balance sheet. See chart (subscriber version).  The Fed is again threatening to begin shrinking the balance sheet. But this time around the market must absorb a far higher amount of new Treasury supply than it did in 2017-19, when the Fed last tightened.

Shrinking the Fed’s balance sheet now would pull cash out of the banking system, causing deposits to at least turn flat, if not shrink outright. I would have to bet that the Fed will never get to that point. The effects of merely holding QE at zero will be bad enough.

As for the War in Ukraine, it’s not helping, but stocks were already down nearly 9% the day that Putin attacked. Furthermore, historically, periods of war have been bullish for stocks. That’s because central banks have typically printed reams of money during wartime. Today, the Fed doesn’t have that luxury, with the  CPI headline print almost 8%, and actual inflation at least 13%.

Wars don’t drive asset price trends. Central bank policy drives asset prices. Today, central banks simply cannot be easy during this wartime because of the devastating inflation already under way.

Under these conditions, where systemic liquidity stays flat, at best, my bet would be that we will see cataclysmic selloffs in stocks at times. Violent rallies will follow, but will inevitably result in lower highs.

Led by the Fed, the world’s biggest central banks have painted themselves, and us, into a corner. They can no longer continue to tilt the playing field in favor of the continuation of a long-running secular bubble. The consequences would simply be too dire.

On the other hand, there will be equally terrible consequences for maintaining tight policy. And I’m not talking about how much they raise interest rates. That’s a sideshow that is an effect of tight money. The market will tell the Fed what to announce about rates. It must simply rubber stamp the market, lest the public realize that the Fed doesn’t control rates the way that it wants the public to think that it does.

Now the Fed is not printing enough money to absorb virtually all new Treasury issuance, with additional cash left over to support stock prices. If it sticks to this new policy of no QE, money rates will rise. Bond prices will fall and yields rise, margin calls will go out. Stock prices will fall. More margin calls will go out. And so on.

But only when consumer prices start to fall will the Fed be able to resume QE. By then, asset prices should be much lower than they are today. Therefore, I will continue to focus on looking for good short to intermediate term stock xxxx xxxxx (subscriber version).. I would continue to xxxx xxxxx (subscriber version). the bond market xxxx xxxxx.

Even bondholders who hold to maturity will get robbed. Inflation will eat them alive.

Will gold be a long term hedge for all of it? In theory, it should be, but we all know about the difference between theory and practice. Meanwhile, the long term charts of gold and some gold mining stocks look more bullish.

I’ll continue to use technical analysis in the Gold Trader reports to try to identify when this gold bull breakout is overdone. And I’ll continue to look for good entry points for getting long the mining stocks.

Meanwhile, none of this has come as a surprise. We were forewarned.

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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!

FREE REPORT – Proof of How QE Worked – Fed to Primary Dealers, to Markets, To Money will help you understand why going in reverse will be a disaster.

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Gold Breaks Out of Massive Long Term High Base, Miners Surge

Lee Adler

Short term cycles have extended through expected peaks, thanks to the extraordinary circumstances. Projections on the 13/17 week and 9/12 month cycles  have risen and now point to xxxx  to xxxx (subscriber version) up from 2000 last week. We are in the window for highs to form on those cycles. However, given the extraordinary circumstances, I would not assume an end to the spike until we see technical evidence of it, such as trendline breaks and downturns in momentum indicators.

Subscribers, click here to download the report.

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.

The correction has ended in the mining stocks. Short term cycles rejoined the two longer cycles on the plus side. The 13 week and 6 month cycles are near maximum strength. In bull markets this is not a sign of an overextended trend.  In past bull phases such conditions have lasted for weeks at times. Normally, negative divergences in these numbers would precede price peak in the sector.

Over the  week ended March 7, 46 charts of the 52 mining stocks that I track had at least one buy signal. 30 had at least one sell signal, which means that a few swung both ways. It’s like that.

These are for swings of 3-5 weeks. For the prior two weeks there were a plurality of sell signals. The corrective phase ended with a bang last week.

I rescreened the stocks that had at least one buy signal from last Tuesday through the week, for repeat buy signals on Friday and Monday. There were 34, which is extraordinary. I inspected those charts looking for good entry setups for picks to add to the list this week.

Most had risen to, or just below major resistance. While the trends are all bullish, these are not low risk short term entry points. Then the question was whether to take a shot on a laggard or two. While these are extraordinary circumstances, my answer there was, again, to stick with the discipline. So I’m adding no new picks this week.

Over the past week there were 6 open selections. All had gains. The average gain was 21% with an average holding period of 31 calendar days. That’s up from 8.7% and average holding period of 24 calendar days the week before.

I’ve adjusted stops on all open picks. 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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Try Lee Adler’s Gold Trader risk free for 90 days!

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Fewer Picks Remain But Still 100% Short, With Gains

Lee Adler

The raw daily data for last week ended with a slight edge to the buy side. The final score for the week was 188 to 153 Buys over Sells. That compared with the prior week’s even-Steven Sells 215, Buys 216. This is 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.

The shrinking number of total stocks having signals, and the narrow spread between buys and sells, are symptomatic of a rangebound market with no thrust, and no sign of breaking into an up or down trend.

Technical Trader subscribers click here to download the complete report.

However, on Friday, March 4 alone, there were just 17 buys and 65 sells. It suggests that the market may be beginning to tilt toward the bears. A down move on Monday would solidify that.

I screened just the lists of previous daily buys and sells for final signals on Thursday and Friday, looking for a progression of signals through the week. The final lists resulted in only 8 buy signals and 8 sell signals. Another reflection of a market going nowhere.

I examined each of these 16 charts for ones to add to the chart pick list for this week. None of the buys looked interesting. Several of the sells did, mostly financials, but they were trading near major support levels. That’s usually not a propitious entry point to go short. Even if they break down, there is usually a recoil move that’s a better short sale entry.

Last week gave us gains on average on the 15 picks, all shorts, that were open to start. This was despite closing out 7 picks with losses. They were all shorts. Four of them, I had decided to close as of Monday’s open. The rest hit the stops I had suggested. That left 8 picks still open, again, all shorts.

Including both the closed picks and those still open, the list had an average gain of 3.3% on an average holding period of 10 calendar days.

There are no new picks, so we will start this week with just those 8 shorts still on the list. They all have gains. I adjusted the trailing stops that are intended to close out picks as they are hit.

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