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Constructive Signs for Gold Digging

Lee Adler

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The cycle picture is hazy. The table at left (subscriber version) is my best guess. A short term low is due, but at a lower projection. The would-be 13-17 week cycle up phase has gone nowhere, despite a new projection that points higher. If it doesn’t get out of this range soon, it would suggest the possibility of a wicked down phase ahead. If the price holds above the May-August downtrend line as shown on this chart (subscriber version), that would be constructive

HUI gold stock index has been rangebound at the lows for the past month. It still needs to clear xxx (subscriber version) to complete an intermediate term bottom. If successful, it would indicate a new 6 month cycle up phase. The measuring implication would be around xxx (subscriber version).

In the cycle screens of the mining stocks, short term cycles got crushed but the two longer time frames held up ok over the past week. That suggests a pullback in a longer up phase. It tells us to stay the course for now with any longs that haven’t been stopped out, and keep an eye out for new entries.

In the chart picks screen, today’s screen yielded 20 buy signals. There were 4 sell signals. This is a nice balance from a bullish perspective. Last week there were 43 sell signals which was a red flag, but as I wrote then, “The intermediate trend structures still hold the prospect of further gains.” Ditto this week. On reviewing the charts of the stocks with buy signals, I found a few that I liked and will add to the list as buys as of today’s opening print. They are XX, XXX, and XXX. See charts below (subscriber version).

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Lots of Sell Signals Again From Friday’s Swing Trade Screen

Lee Adler

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This Friday’s screens had just 7 buys and 42 sells. That compares with the previous Friday’s 8 buy signals and 48 sell signals. 1211 stocks met the initial screening criteria. 96% of stocks are either already moving in the direction of the most recent signal, whether up, down or sideways, mostly sideways. As was the case last week, there’s still no real sign of thrust in either direction.

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But there are hints of a downturn that suggest that it’s finally time to actively consider adding shorts to the list, something that I’ve assiduously avoided for the past 18 months.

Again this week, one of the interesting things in these signals was that 9 of them were bearish signals on fixed income ETFs. Last week it was ten. They’re not movers and not really candidates for trades, but it squares with our liquidity analysis that the bond market will be a bad place to be.

Likewise there were numerous sell signals on REITs. That’s another bearish sign for not just the group, but for fixed income and the stock market. I don’t like to trade REITs. They tend not to trend, but to jump around like rangebound Mexican jumping beans. But the bearish indications are beginning to coalesce into a theme that fits our outlook.

Healthcare was another theme that kept cropping up on the sell side.

Despite all the sell signals, I didn’t see many charts that looked like a setup for a big decline right here. I did find a couple that were interesting, however, and am taking a bite on xxx, xxx, and xxx (subscriber version only).

Maybe after the next bounce there will be more obvious shorts. I’ll put a toe in the water here, leaving the list balanced. I want to be patient until I see a clearer path to the downside before adding more shorts.

Last week was not a good week. Seven buy side picks got stopped out. Only two of them had gains. Including both those stopped out and those left open, the list had an average loss of 0.9% with an average holding period of 18 days. That wiped out the prior week’s 1.5% average gain on an average holding period of 12 calendar days.

The premature failure of buy signals is a sign that the market is probably reversing. It’s time to start looking for shorts more actively. We’ve been avoiding them until now.

Charts and table of existing picks below (subscriber version only).

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Nothing Has Happened Yet

Lee Adler

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The 10-12 month cycle has now signaled that the expected top in this time frame is forming. But with longer cycles still in strong up phases, I’ll start with the assumption that the 10-12 month cycle will stay flat. That would only suggest a decline to xxxx (subscriber version only).

The 6 month cycle down phase is also under way, but it too could stay flat. The 13 week cycle, which had been trending, is uncertain. It’s due for a xxxx (subscriber version only) this week.

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Useless Banking Indicators Except for One Giant Red Flag

Lee Adler

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I started to wonder how the banking indicators were looking lately. I’ve looked at the charts this morning. In updating this for you, I’ve again attempted to minimize the verbiage here. The charts are bad enough.

When it comes to banking indicators it’s best not to suffer paralysis by analysis. We’re seeing the same crazy insane, stuff, month after month year after year. As long as the Fed backstops this, who knows how long it can go on. Most of this data only reconfirms how historically extreme these conditions are. It tells us nothing about the timing of the next “adjustment.”

Besides, the markets will crack first and take the banking system down when they do, not the other way around.

So consider this report an interesting diversion. I post it because I did the work, so I may as well publish it (Sarcasm).

But I did come across one chart that appears to have timing implications.

Bank deposits.

The correlation with stock prices is stunning. But it gets even more interesting when expressed as a ratio of the S&P to deposits. That’s telling us that right now is a good time to at least get ready to dump stocks, if not do it now. This chart and the rest, all in the subscriber version of the report.

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Gold’s Setup Has All Kinds of Potential

Lee Adler

This report tells what the potential is, and how to spot its likely attainment.

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Lots of Sell Signals But No New Picks From Friday’s Swing Trade Screen

Lee Adler

This Friday’s screens had just 8 buy signals and 48 sell signals. Despite all the sell signals, the charts were messy and uninteresting from a swing trade perspective either way. The market has had no thrust on the upside, and still none on the downside. 1268 stocks met the initial screening criteria. 96% of stocks are either already moving in the direction of the most recent signal, whether up, down or sideways, mostly sideways.

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The only thing really interesting in these signals was that ten of them were fixed income ETFs. They’re not movers and not really candidates for trades, but that sure stinks of bear you know what.

To put things in technical parlance, Friday’s charts were a “mishmosh.” Despite all the sell signals, I didn’t see anything that looked like a setup for a big decline right here. Maybe after the next bounce, but not now. I want to be patient until I see a clearer path to the downside. Right now, there’s no path either way.

Already open picks (list and current performance in subscriber version) had an average gain of 1.5% with an average holding period of 12 days. That’s down from the prior week’s 2.5% on an average holding period of 15 calendar days.

The picks that I added a couple of weeks ago have done fine. The ones last week… not so much. I’ve added stops to all of them. With no new picks this week, there are still 13 open picks. All are again longs. Charts below (subscriber version only).

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Here’s Why “Sell Rosh Hashanah, Buy Yom Kippur” Won’t Work This Year

Lee Adler

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From a time perspective, the 10-12 month cycle ideally should be in a top phase. But it surpassed its last cycle projection of 4440 so it is probably in trending mode. Both the 6 month cycle and the 13 week cycles appear to be trending.

Short term cycles are in up phases. The 4 week cycle is currently the only one where it’s possible to make a projection. It’s xxxx (subscriber version only).

On the weekly chart, 3-4 year cycle momentum exploded to its strongest level since 2014. This is another sign that the market could trend higher for longer. In the short term, there’s a trendline convergence around xxxx (subscriber version only). that is likely to be the target of this move.

With the market beginning to create a little separation from the trendline at 4400, the long term cycle projections of xxxx-xxxx (subscriber version only) are looking more and more realistic, with highs due between now and next year.

On the monthly chart, the S&P 500 ended August at or above long term trend resistance around 4500. This suggests more upside.

The long term cycle momentum indicator remains bullish.

Cycle screening measures strengthened. This confirms the trend and suggests another extension.

Swing trade chart picks will be posted Tuesday morning.

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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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Take the Threat of this Triple Whammy Seriously Now

Lee Adler

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The stock and bond markets face a triple whammy at the end of this month. In this report I’ll show you what those three things are, why and how they will impact the market and what you should do about it (subscriber version only). These three things coming together as soon as xxxxxx (subscriber version only) will pose a grave threat to the Treasury market, to short term interest rates, and ultimately to the stock market.

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Here’s What Happens When Gold’s Cycles Are at Cross Purposes

Lee Adler

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It’s decision time for this rally as gold rests in the downtrend area around 1810. The 6-7 week cycle projection is xxxx (subscriber version only), but they would need to push through resistance around xxxx (subscriber version). Cycles remain at cross purposes, which is conducive to xxxxxxxxxxxxx (subscriber version) .

HUI needs to clear xxx (subscriber version)  to complete an intermediate term bottom. If successful, the measuring implication would be around xxx.

Today’s screen yielded only 1 short term buy signal. Yesterday’s downtick began triggering sells with 6 of the 52 stocks in the screen flipping sell side switches. The intermediate trend structures still hold the prospect of a near term upturn. So I’ll stick with the 5 charts on the list (subscriber version), but won’t add any new ones today.

This report includes the cycle projections for short to long term time frames, and swing trade mining picks. Get ready for the big move now!

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Chart Picks – 8 New Picks From Last Week’s Swing Trade Screens

Lee Adler

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This Friday’s screens had 46 buy signals and 5 sell signals. Two of the sell signals were on inverse ETFs, making the actual score 48 to 3 in favor of the bulls. This still indicates little thrust for the market as a whole. But it’s more than last week and it shows even less drag. Given that 1270 stocks met the initial screening criteria, 96% of stocks are either already moving in the direction of the most recent signal, which is to say, up.

The charts that I liked enough to add to the list on the long side as of Monday’s open are xxx, xxx, xxx, xxxx, xxxx, xxxx, (and similar but one is enough), xxxx, and xxxx (in subscriber version only). Charts below (subscriber version).

Previous picks, including those closed last week and still open on Friday, had an average gain of 2.5% with an average holding period of 15 days. That’s little changed from the prior week’s 2.3% on an average holding period of 19 calendar days.

Three picks were stopped out last week and one I set to be covered on the open last Monday. That left 5 open picks. All are again longs, after having a token short or two for a couple of weeks. All 8 new picks are also longs. After a couple of months of few picks, we’re finally getting back to the normal complement of 12-16.

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