Lee AdlerDuring the week ended Thursday, July 31, out of 1650 stocks meeting institutional price and volume criteria:
Setups:
68 met major or intermediate trend buy setup criteria.
175 met major or intermediate trend sell setup criteria.
Short-term cycles topped out on schedule. They appear to be joined by the 9-12 month cycle, with the 13-week cycle now dormant.
FREE REPORT –
The S&P 500 has rallied relentlessly to all time highs for 3 months. A broad based bull? Nope. Mostly Mag 7. Or rather, Towering Two.
Here’s a graphical essay that speaks for itself.
Screen results this week finally reversed the recent string of small losses as I continued to utilize weekly charts and signals to select picks, as opposed to using triggers from only the most recent day.
The market remains in a narrow, liquidity-driven uptrend, fueled by residual cash reserves and dominated by the Mag 7.
A little oopsie. RRP slush fund falls $57 billion today as counterparties withdraw funds to buy the flood of T-bill issuance. The slush fund should be bone dry in about 10 days.
Short-term cycles are due to enter a down phase. Like last week, price continues moving sideways toward the apex of a triangle, with vague hints from the cycle and momentum indicators that the breakout will be to the upside toward a peak between xxxx and xxxx.
This is impressive. With today’s T-bill announcement of a mammoth $245 billion in gross issuance and $60 billion in net new paper, the Treasury is issuing $127 billion in net new T-bills this week. And the markets are yawning.
Something will break, soon. See this week’s Liquidity Trader Macro Liquidity update for details on what to expect.
The liquidity cliff is here. But nothing has changed. Stocks have been rallying. Bonds are rangebound.
We’re now at a critical fork.
Despite new short-term highs, the S&P’s rally remains precarious and thin. Divergences across indices, failing cycle thrust, and deteriorating cycle breadth indicate a market under internal stress. The market has arrived at the precipice of the liquidity cliff.
Gold’s technical picture shows mixed cycles as the price tests long term trend support. The latest analysis reveals key cycle confluences that should drive the next major move. Four mining picks are listed for the next swing.
All but a couple of shorts on the list were closed last week and none were added this week because the screens identified no good short-term setups.