Lee AdlerThe Fed is doing just enough. Repo growth has flattened, leverage may be unwinding, and long term liquidity/sentiment measures remain historically extended. Yet nothing has broken. The bull is on life support, and the next 60 days will tell us whether the seasonal liquidity tailwind buys it another leg or the exits start getting crowded.
Cycle based screening methodology struggles with rangebound markets where wave frequencies go hyper, amplitudes are large, and/or the market is whipped around by news. The idea is to survive those periods, and then be well positioned for the next sustained trend. We’re in survival mode now. The list has been mostly minimally positive during this rangebound period, but the meatgrinder effect finally appeared last week. The market chewed us up and spit us out.
The S&P 500 is currently testing key support levels within a short-term downtrend channel following the US attack on Iran over the weekend. While short-term cycles suggest a possible bottom, long-term momentum is weakening, placing the market in a high-risk window. We need wait and see for one or two sessions, to estimate whether this action deflects the market to a lower trajectory, or merely creates temporary distortion.
Gold’s 13-week cycle lower wave band rises to xxxx over the next week. Short cycle projections have risen to xxxx but there’s no 13-week cycle projection yet.
The list currently has an average gain 2.7% on an average holding period of 17 calendar days, including open picks and those closed out last week. 6 new picks will be added this week and 5 will be closed.
Short-term indicators suggest a potential minor rally toward April. However, this strength is expected to be temporary as the broader trend faces exhaustion and long-term cycles enter a high-risk phase.
Here are the support and resistance levels, cycle projections, and indicators to watch to determine the direction of the next big move.
Short term cycles have turned up, with projections pointing to xxxx-xxxx between xxxxxx and xxxxxx. A daily close below xxxx would break the short-term uptrend, and suggest that a big top is forming.
The Fed’s ~$50–55B/month in outright T-bill and T-bill buys to replace MBS prepayments has been sufficient to offset the withdrawal of the hedge fund Treasury basis trade. Hedge funds have cut short Treasury futures positions by 600,000 contracts since September in the 10 year Treasury futures alone. So far the Fed is winning the battle to hold the line.
The list currently has an average gain 2.7% on an average holding period of 17 calendar days, including open picks and those closed out last week. 6 new picks will be added this week and 5 will be closed.
The market remains within a trading range, showing signs of a concurrent down phase across multiple cycles but without downward thrust, suggesting that xxxxxxxx xxxxxxxx xxxxxxxxxx 2-3 xxxxxx months.
Short term cycles are due to consolidate while intermediate cycles remain in up phases. Projections now point to xxxx in the short run, and xxxx in Q1 of 2026. The price would need to end this week below xxxx, or below xxxx at year end to break the uptrend.
I’m having cataract surgery Tuesday afternoon. Since I’ll be out of commission for a few days, I wanted to give a quick overview of the Treasury supply outlook for the next 3 months.
February is normally a month of big supply because taxpayers expecting big refunds are motivated to file early, resulting in heavy cash demands on the Treasury. That normally means more debt issuance, with resulting pressure on bond and stock prices.