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The Fed’s Circle Jerk… Is ‘Twerking?

Lee Adler

The one thing the Fed is good at is putting out fires. They did it again this time. Stopping bank runs in their tracks, preventing what could have become an out-of-control conflagration. For now.

But it’s little more than a circle jerk. Yesterday’s firefighting will only lead to more fires down the road tomorrow. For now, it seems as though the joint action of the Fed, Treasury and FDIC has achieved the desired goal of stabilizing the banking system and the financial markets. The stock market has benefitted. And investors who had panicked into bonds are starting to see a bit of erosion of the capital they thought that they were committing to safety.

In short, here’s what happened and more importantly, what lies ahead because of it.Non-subscribers, click here for access.

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Here’s How This Week Will Show Whether Bulls or Bears are in Trouble

Lee Adler

The S&P 500 closed smack on the trendline drawn on daily closing prices extended from the August 2022 and February 2023 highs. An up week this week would break that trendline. The bulls would then be in charge. If the market sells off this week, bears would then have the ball. We might even consider shorting opportunities, if you can believe that.

But are there any tells that suggest which way this will break? Yes. Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

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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Swing Trade Screen Picks – Still Tilt Buy

Lee Adler

For the week ended April 13, there were 66 charts with multiple buy signals as of the last two trading days. There were just 16 multiple sells. Upon visual review all I saw on the sell side were rangebound whipsaw signals – constant back and forth. I’m not about to guess which one of these might see follow through. Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

On the buy side, there were many that were moving but had limited upside in the short run. I found 4 that look like they’re just getting started and I’ve added those to the list, as shown on the table below. I will start tracking them as of today’s opening price.  Non-subscribers click here for access.

Of the 8 picks left over from last week, the longs did well, the shorts, not so much, as shown below. I’ve added stops to all of the shorts and one of the longs. The other two longs I’m letting ride.  Non-subscribers click here for access.

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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. This is a developmental and experimental exercise, for the purpose of providing experienced chart traders with ideas and concepts to use or not use as they see fit. 

Nothing in this letter is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical. The method behind these picks is experimental, and may change over time.  I may trade my own account, and may buy, sell, sell short or cover short, or have positions in any of the stocks on the list at any time, based on a particular trading style that is unique to me. My entry and close out levels are likely to differ from those published due to the exigencies of my trading style and time constraints. I post these items in good faith for informational and educational purposes, and do not take positions in opposition to those which are published. All chart picks are actively traded stocks, and I assume that no subscriber to these reports, nor the total of all subscribers taking positions, would do so in a size that would influence the market price. 

Performance tracking assumes 100% cash basis, no margin, no options. You should not assume that recent performance as reported can or will be repeated in the future. Trading involves risk of loss. In the case of options, the loss can be 100% of the amount invested. When leverage is used the loss can exceed the account equity under certain conditions.

The opinions expressed here assume that readers are experienced investors or are working with an investment advisor.

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Here’s What’s Next Now That Gold Has Reached Its Limit

Lee Adler

Here’s how we know that the rally has reached its limit. But all is not lost. We’ll just need to be very patient. Meanwhile, there’s evidence that the miners will outperform.  Non-subscribers, click here for access.

Subscribers, click here to download the report.

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The strategy and tactics suggestions in this report are informational and general in nature, and illustrative of one approach. They are not investment advice. No representation is made that it is the best approach, will be profitable, or even suitable for any particular investor.

Nothing in this letter is meant as personalized investment advice and you should not construe it as such. Trading involves risk of loss, and in the case of options, the loss can be 100% of the amount invested. Any trading that you do with reference to strategies and tactics suggested in this report should be done only after consulting with your financial adviser. Trade at your own risk. 

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Cycle Indicators Tell How to Play This Rally Now

Lee Adler

Don’t be fooled by near term weakness. Everything looks lined up for more upside after that. However, it will be challenging for both nose and stock pickers. Only the usual suspects will be guilty of driving the rally.  Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

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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Swing Trade Screen Picks – 3 Buys, 4 Shorts

Lee Adler

For the week ended April 5, there were 60 charts with multiple buy signals as of the last two trading days. There were 53 multiple sells. Plenty of charts to visually review on both sides.  Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

On the buy side, I did see lots of structural base breakouts that looked well supported. Most were in Utilities and Fixed Income. Yawn. I added one of them, and a couple of others that were more interesting in terms of beta.  Non-subscribers click here for access.

On the sell side, I found 4 charts to add as shorts.  Non-subscribers click here for access.

Of the two picks left over from last week, one hit its stop. The other is hanging out. The performance or lack thereof, of existing picks is shown on the table below (subscriber report). New picks will be tracked as of the 1 PM ET price on Thursday April 6. No stops this week.  Non-subscribers click here for access.

Technical Trader subscribers click here to download the complete report.

Subscription Plans

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. This is a developmental and experimental exercise, for the purpose of providing experienced chart traders with ideas and concepts to use or not use as they see fit. 

Nothing in this letter is meant as individual investment advice and you should not construe it as such. These picks are illustrative and theoretical. The method behind these picks is experimental, and may change over time.  I may trade my own account, and may buy, sell, sell short or cover short, or have positions in any of the stocks on the list at any time, based on a particular trading style that is unique to me. My entry and close out levels are likely to differ from those published due to the exigencies of my trading style and time constraints. I post these items in good faith for informational and educational purposes, and do not take positions in opposition to those which are published. All chart picks are actively traded stocks, and I assume that no subscriber to these reports, nor the total of all subscribers taking positions, would do so in a size that would influence the market price. 

Performance tracking assumes 100% cash basis, no margin, no options. You should not assume that recent performance as reported can or will be repeated in the future. Trading involves risk of loss. In the case of options, the loss can be 100% of the amount invested. When leverage is used the loss can exceed the account equity under certain conditions.

The opinions expressed here assume that readers are experienced investors or are working with an investment advisor.

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Here’s How We Know That Doom Has Already Arrived

Lee Adler

Tax collections for March, and the month ended April 4, were so weak that they indicate that the US economy is now in recession. Non-subscribers, click here for access.

Subscribers, click here to download the report.

If the BLS were tied to reality, that would mean a very bad Nonfarm Payrolls report coming up Friday. Yes, the report is scheduled for the first Friday as usual, even though the markets are closed. Non-subscribers, click here for access.

The bottom line is that the report should be a shocker, which I explain below. And that will be xxxxxxxx for bonds, and xxxxxxx for stocks. Non-subscribers, click here for access.

However, the usual seasonal tax bulge in April funds Treasury paydowns which stuff cash back into the pockets of dealers and investors. That could temporarily xxxxxx xxxxxxxx xxxxxxxx xxx effects of a weak jobs report on stocks. Non-subscribers, click here for access.

The consensus median forecast of the priesthood of Economism is for a gain of 238,000 jobs in March. If reality mattered, which it does not in the initial release, then the number would be negative. That won’t happen, but if the weakness in tax collections persists this month, then the BLS will be forced to catch up in the months ahead. Non-subscribers, click here for access.

We’ve seen that they can do that in one of two ways. They can revise previous months, or they can use their screwed up X13 Arima moving average to adjust the current month. X-13 ARIMA is like a paint brush that uses 5 years of imaginary future data to paint a picture of current reality. The BLS uses that to apply often absurd assumptions to adjust the current month to refit what happened in the past. It’s why the BLS Nonfarm Payrolls report is something more akin to impressionistic art than actual economic data. Non-subscribers, click here for access.

Eventually, they do fit the curve to what actually happened, but the process includes two monthly revisions and a once a year benchmark to real data. So it usually takes a year to adjust the current month to reality. Then there are additional annual benchmark tweaks for 4 years after that to account for the imaginary X13 ARIMA smoothing data that was initially applied. So the chart lines you see for nonfarm payrolls from traditional sources are actually fit to reality AFTER THE FACT. Non-subscribers, click here for access.

Withholding tax data has no such shortcomings. It’s real. It’s real time. And it is raw, unadjusted fact. We just smooth it so that we can make meaningful comparisons year to year and month to month. The easiest way to interpret it is to simply put it on a chart and look at it with our own two eyes. We don’t need no damn fool Wall Street egonomists to tell us what it means. We can see it for ourselves. And the chart is ugly (subscriber report). Non-subscribers, click here for access.

Again about the jobs report, I’ve observed that the new BLS reports tend to correlate more with the withholding data from two months before, not the previous month. That stands to reason because the BLS surveys employers on the 12th of the month. So the report for March is based on an employer survey as of March 12. That would mostly tend to represent February payrolls, not March. And therefore it would correlate more with February’s tax data. Non-subscribers, click here for access.

February’s withholding tax collections were way below January’s collections on a year to year change basis. And March was even worse, in fact, negative. So there should be a couple of shockingly bad jobs reports ahead. xxxxxxx for the bond market, and therefore for the idea of a potentially xxxxxxxxxxxxxxxx banking crisis. The scarier it gets, the more the market turns toward buying bonds, pushing yields down and prices up. xxxx xxxxxxxxx xxxxxx xxxxxxxxxx xxxxxxxxx xxxxxxxx problem of massive hidden losses on bank balance sheets. Non-subscribers, click here for access.

In that regard, weak jobs numbers would be just what the doctor ordered in the current environment. For bulls or bears? Find out in this report. Non-subscribers, click here for access.

Subscribers, click here to download the report.

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Macro Liquidity Says No Way Jerray!

Lee Adler

Bulletin: The US Treasury just announced another T-bill paydown. That brings the one week total, April 4-11, to $55 billion. That’s more than enough in the short term to offset negative macro liquidity drivers. This is the April tax season effect on steroids already, and it isn’t even April 15 yet. Non-subscribers, click here for access.

Subscribers, click here to download the report.

New game, new rules. In this report, I want to attempt to show you in more pictures and fewer words (hard for me), where things stand in terms of macroliquidity, as we embark on this new journey into the unknown. Unknown not just to us, but especially to clueless policymakers. After all, they’re the ones who created this mess in the first place. Yet, Wall Street thinks that they know how to fix it. Non-subscribers, click here for access.

Since we no longer have the benefit of them knowing, and telling us, the full scope of policy in advance, we now have to pay even closer attention to the liquidity flows. Our hope is that that is good enough. Non-subscribers, click here for access.

As we know, money talks. Central Bank BS walks. Talk is cheap. Markets can’t and don’t anticipate the future. Money moves the markets. Follow the money. Read and react. That’s the name of the new game. Non-subscribers, click here for access.

So here are my readings on what I believe are critical measures that will help to give us a bit of clarity on where we are now and where this mess might be headed. Non-subscribers, click here for access.

Where we’re headed in liquidity is still xxx xxxxxxx. The stock and bond market rallies are xxxing that. That is xxxxxxxxxxx over the long haul. Non-subscribers, click here for access.

Yes, we know there are xxxxxxx that will promote xxxxxxx at xxxxxxxxxx. That’s particularly true now with the effect of April Treasury paydowns. But once that cash has run through the system, usually around the end of May, xxxxxxxx xxxxxx. Non-subscribers, click here for access.

Will it even last that long? While the liquidity measures in the weeks ahead will help us to understand the context, we must rely on the Technical Analysis for shorter term timing. In terms of the big picture, the forces of liquidity aren’t xxxxxxxxx xxx. The hope that the Fed either will pivot, or already has, are xxxx the fumes that the markets are running on right now. Non-subscribers, click here for access.

Again, this xxxxxxx sustainable. I might be a little xxxxx under the circumstances, but with a trigger finger. I’m not xxxxx anything, and not ready to get xxxx. Non-subscribers, click here for access.

Subscribers, click here to download the report.

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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! 

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First, the Rally, Then …

Lee Adler

Broadly speaking, not so much yet. I’m avoiding shorting for sure, but here’s what else we need to put more than a few long toes in the water. Non subscribers click here to access.

Technical Trader subscribers click here to download the complete report.

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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Play By Play On the New Rules of the Game

Lee Adler

The game has changed and there’s not even a pitch clock. But there is a bond market loss clock. Right now, it’s on a timeout. The Fed has given it a lifeline and the Treasury will stepping up with its usual seasonal help in April.   Non-subscribers, click here for access.

Subscribers, click here to download the report.

Money is the Fed’s game, but not even the Fed knows what’s coming next. It used to be that it kind of knew, and so did we. Rule Number One, “Don’t fight the Fed,” was easy to follow because the Fed told us in advance exactly what it would do, week in and week out, month in and month out. For 12 years, following QE to ever higher asset prices was a no-brainer. Non-subscribers, click here for access.

No more. The Fed is flummoxed, a victim of its own blind hubris. So now it’s making up willy-nilly firefighting tactics on the fly. Under the circumstances, how do we predict what’s coming? How do we trade that which isn’t known. Do we just guess? Non-subscribers, click here for access.

Now, because it’s always about following the money. While we know less now about how that will look in the months ahead, it’s ditto for everybody else. The market will not be able to anticipate policy correctly. Non-subscribers, click here for access.

Not that it ever did. I’ve observed through the last two decades especially, that the market follows the money. It doesn’t lead it. The market responds most forcefully and persistently to actual changes in the level of liquidity, not to speculation about what the Fed will do and when will it do it. Money talks and Wall Street BS walks. Non-subscribers, click here for access.

So, in theory, if we follow the money in a timely way, we should still be able to stay on top of the game, to react correctly in time, if not in advance of what’s coming.  Non-subscribers, click here for access.

As a result, I’ve been thinking about and experimenting with better ways to get critical information out to you. I want it to be faster, shorter, and more on point. In the bad old days of QE, things were different because the Fed telegraphed what was coming for weeks and months in advance. Now, they don’t know, so neither do we. So, like the Fed, we need to be reactive, because the unknowns coming at us are greater than the knowns. Non-subscribers, click here for access.

The trick will be to react quickly and correctly when we see actual changes in liquidity flows. One of the most important ways to do that, will be, as it was before, tracking the Fed’s weekly balance sheet statement.  Non-subscribers, click here for access.

Looking at the data we have now, we know that for the next 6 weeks, the markets should xxxxx xxxxxx xxxxxxx xx xxxxx, and that’s bxxxxish. But sell in xxxxxxx xxxxx xxxx xxxxxxx. Non-subscribers, click here for access.

Here’s why, and what that means for investors. Non-subscribers, click here for access.

Subscribers, click here to download the report.

Subscription Plans

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! 

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