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Stock Market on the Brink

Lee Adler

Technical Trader subscribers click here to download the complete report.

Cycle structures and conventional technical indicators are now on the cusp of intermediate term signals. The setups suggest that if those signals are forthcoming this week, they’ll be valid. This report illustrates what would be required to trigger those signals (subscriber version only).

All cycles are now in gear to the downside. Short term cycle projections have been reached, but a 13 week cycle projection points to xxxx (subscriber version only).  A weak bounce this week, or no bounce, would suggest that that target is still in play.

Multiple cycle channel support lines are clustered around xxxx (subscriber version only). That’s a likely place for an intermediate low to develop after one more tests or minor penetration, in the next 1-4 weeks.

On the third rail chart there’s a bit of air below xxxx (subscriber version only).  That next support line will be at xxxx on Monday, rising by 2.75 points per day (PPD) to around xxxx on Friday. However, if the market rebounds on Monday, it would be back within the uptrend channel that has continued the move since May. That line rises from xxxx to around xxxx this week.

On the weekly chart, the market is resting on the previously broken long term uptrend line at xxxx (subscriber version only). If the week ends below that, then a test of the support region around xxxx would become likely over the next month. If those break, it would suggest major top formation. Conversely, if either the current trendline, or the cluster below, holds, then the uptrend would still be intact.

The long term cycle projections of xxxx to xxxx (subscriber version only) are still viable, for the time being, with highs due between now and next year. That outlook could change this week.

On the monthly chart, the S&P 500 needs to break xxxx (subscriber version only) in September to signal an end to the uptrend.

The long term cycle momentum indicator remains bullish. For now.

Cycle screening measures broke the intermediate term bullish trend, setting it back to neutral. But the aggregate measure hit a line that suggests a short term bottom. If it breaks, then the bigger picture turns bearish.

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 the Coming Bond Market Bloodbath

Lee Adler

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Janet Yellen has now confirmed that the Treasury will run out of money in October, as we already knew from our tracking of the data.  Congress will be forced to raise the debt ceiling. Treasury supply will mushroom at the same time as the Fed begins to cut its market support operations. The RRP slush fund will affect the timing of the coming disaster. But we know its coming and we have a good idea of when.

Meanwhile the BLS has fomented a completely false picture of inflation. I explain that in this report. It’s blatant.

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FREE REPORT – Proof of How QE Works – Fed to Primary Dealers, to Markets, To Money

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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

Technical Trader subscribers click here to download the complete report.

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

Subscribers, click here to download the complete report.

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.

Subscribers, click here to download the complete report.

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Get the complete report, including charts, tables, analysis, and outlook. and access to all past and future reports, risk free for 90 days!

FREE REPORT – Proof of How QE Works – Fed to Primary Dealers, to Markets, To Money

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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.

Subscribers, click here to download the report.

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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.

Technical Trader subscribers click here to download the complete report. 

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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

Technical Trader subscribers click here to download the complete report.

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.

Technical Trader subscribers click here to download the complete report.

Subscription Plans

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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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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