Lee AdlerStock prices are currently right in the middle of the channel surrounding the liquidity line in the Compositite Liquidity Chart (viewable in subscriber version). By this measure the market isn’t overbought, as so many bearish pundits are bellowing. Nor is it oversold. It’s just tracking the growth of systemic liquidity. Not too hot, not too cold, but just right. Goldilocks.
Gold’s intermediate term indicators remain bullish, and mining picks are fine.
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Our mining picks held their own last week, and we’re holding on to them this week. Here’s the list, with charts.
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Cycles are still bullish, with the 6 month and 10-12 month cycles apparently in trending mode. This means that there are neither price projections nor time guesstimates for those. In these circumstances we need to resort to trend following indicators.
Cycle projections are only available for short term cycles. There are no projections for cycles from 13 weeks to 10-12 months. We’re flying blind as to likely upside targets on those. Short term projections point to xxxx-xxxx (subscriber version) during June.
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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.
2/16/21 Every week I run technical stock screens covering all NYSE and NASD stocks trading above $6 and averaging more than 1 million shares a day. This typically results in between 15 and 50 charts to review visually. I’m looking for low risk, high reward price structures, which I’m not smart enough to program into the screening process. But it’s ok. I like to look at charts.
The volatility subsided, but the range remained. 4 picks dipped below their stops. Were they too tight? Or is this the beginning of the end for the longs. Time will tell.
Meanwhile, list performance improved slightly to an average of +2.4%, up from +0.2% the week before, on an average holding period of 15 days, up from 10 days the week before. The percentage change assumes cash trades, no margin, no options.
The stopouts left just 4 picks on the list. All are longs, and all look ok to hold, with stops adjusted based on trigger lines in the charts. I added two more picks from Friday’s screen.
The balance between QE and Treasury supply will remain bullish through through xxxx (subscribers only). This should provide a boost for stocks. It should keep the Treasury selloff at bay for another month or two.
However, this is not as bullish as I first thought. It appears that around 75% of the T-bill paydowns are going to money market funds and other institutions who must hold short term instruments instead of lengthening maturities or buying stocks. So most of the cash from the paydowns is ending up in Fed RRPs.
Only about ¼ of the money has been used to buy stocks and bonds. So the effect has been muted. There’s no massive blowoff. Instead conditions lend themselves to a churning topping action lasting through xxxx (subscribers).
Short term indicators for gold have edged to the sell side. The 13-17 week cycles are due for consolidation. However, cycle projections still point higher. The 9-12 month and 15 month cycle indicators continue to signal upturns, but they need to cross their zero lines to suggest more upside.
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Our mining picks held their own last week, and we’re holding on to them this week. Here’s the list, with charts.
Try Lee Adler’s Gold Trader risk free for 90 days!
As wild short term volatility chews up swing traders and spits them out, the market averages remain in an uptrend, and look poised to move higher. But fewer stocks will lead the way. Most may not participate. Technical Trader subscribers click here to download the complete report.
But wait! There’s more! Continue reading here if you haven’t subscribed yet.
2/16/21 Every week I run technical stock screens covering all NYSE and NASD stocks trading above $6 and averaging more than 1 million shares a day. This typically results in between 15 and 50 charts to review visually. I’m looking for low risk, high reward price structures, which I’m not smart enough to program into the screening process. But it’s ok. I like to look at charts. 😊
Technical Trader subscribers click here to download the complete report.
Volatile rangebound trading is a meat grinder for swing trades. Last week lived up to that. List performance slipped to an average of +0.2%, down from +2.1% the week before, on an average holding period of 10 days, up from 8 days the week before. In trending markets this number would normally be around 13-14 days. The percentage change assumes cash trades, no margin, no options.
10 picks hit stop triggers, leaving 8 on the list. All are longs, and all look well positioned for additional gains, but I have kept stops tight, just in case. I have adjusted most stops.
Every time there’s a critical problem in the banking system due to banker malfeasance, the Fed steps in to paper it over and reward the criminals.
That’s why we focus on the Fed more than anything else. Regular review of the banking indicators was useful once upon a time. The Fed has rendered them irrelevant. But I promised to keep an eye on them, and it has been 5 months since we last looked. That’s enough time that, if anything material has changed, we need to know about it. So herein is a review, our first since last December.
In this report, I highlight the charts. Because there are so many, I’ve attempted to minimize the verbiage. I talk too much. The charts really speak for themselves.
The bottom line is that the system remains extremely vulnerable to a decline in Treasury prices that is coming in xxx (subscribers only). Likewise, the return of optimism in commercial real estate is problematic. The banks are taking no precautions. There’s no sign of recognition of the looming losses.
It means that the entire banking system could be destabilized in xxxxx (subscribers only). The Fed will have to act, massively. History shows that the Fed won’t act in time to prevent a breach of the system. History also shows that the Fed has the power to ultimately make its actions give the appearance of stabilization, leading to the return of animal spirits.
But I don’t know if it will work yet again, and we can at least expect a significant break first. So here’s what I would do (subscribers only).
Now here’s a review of the banking indicator charts.
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A 13-17 week cycle high is due for gold, with a projection of xxxx-xxxx (subscribers only), but the down phase should be benign given the apparent strengthening of the 9-12 month cycle. There’s no longer a projection on that cycle. The 6-7 week cycle projection has risen to xxxx. (subscribers only)
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In the mining stocks, short term cycles remain in up phases, and the 13 week cycle appears to have shifted into trending mode. Cycle projections have risen, with xxx-xxx (subscribers) the likely short term target. The 10-12 month cycle now projects to xxx (Subscribers) in the third quarter.
I have added 5 new miners to the chart pick list. Try Lee Adler’s Gold Trader risk free for 90 days!
