Lee Adler

I’ve been publishing The Wall Street Examiner and its predecessor since October 2000. I also provide analysis and charts for David Stockman's Contra Corner which I developed for Mr. Stockman. I’ve had a wide variety of finance related jobs in the past 44 years, including a stint on Wall Street in both analytical and sales capacities. Prior to starting the Wall Street Examiner I worked as a commercial real estate appraiser in Florida for 15 years. I also worked in the residential mortgage and real estate businesses in parts of the 1970s and 80s. I have been charting stocks and markets and doing analytical work since I was a teenager. My perspective is not of the Ivory Tower. It is from having my boots on the ground and in the trenches of the industries that I analyze and write about today.

Bulls Have the Edge, But This “Meat Grinder” Market Is Very High Risk

The volatility we have seen in the markets since early February is enough to put bears and bulls alike at unease. Prior to early February, the markets were climbing up and up, making it worth maintaining a long position and buying each and every dip.

Just have a look here at the SPX:

But early February was the warning shot across the bow for the bear market that I expect. If you had been following the advice that I published throughout the third and fourth quarters of last year and into January, you would have converted to 60-70% cash and saved yourself from the headache and loss, which that shot would have inflicted.

Since February, the markets have been up and down. There are times when the market gets locked into a trading range and the market chops and churns, and the past 6 months have been a case in point.  I call these periods “meat grinder” markets, because they tend to chew traders up.

Nevertheless, I’ve been on record saying that a bear market will arrive soon – and I had anticipated that it would arrive even sooner. But when things go against our expectations it’s critical not to panic. We must continue to watch the charts, and stick to our analysis and conclusions about what is fueling the larger emerging trend.

So I harken back to three ideas that I’ve been harping on, all of which point to increased market risk.

The post Bulls Have the Edge, But This “Meat Grinder” Market Is Very High Risk appeared first on Lee Adler’s Sure Money.

My Crucial Bearish Indicators, Plus a Critical Bullish One I Missed

Based on both my cyclical/technical analysis and liquidity analysis, I had a July 10 deadline for the end of the strong period for stocks. We’re now a week past that point and the market remains a tad higher than it was on July 10, and higher overall than I anticipated. When the market misaligns with the projected timeframe of my analysis, it’s time to ask whether I’m wrong or just early. As I do my research, that question is never far from my mind.

It’s important to always do a little post mortem when things don’t go as expected. In doing so, I try to figure out what happened and what I missed that caused the market to operate outside my expectations. That can help me make a course correction in my current forecast. At times, it can even help me recognize a new or different indicator that provides me with a deeper understanding of what’s driving the market, and where it’s ultimately headed.

While I cannot possibly account for every fluctuating input influencing the market direction, I try to recognize those that are most important.

That’s why I’ve organized a handful of the most important indicators that I’ve been using, as well as a couple that perhaps I should have given more consideration.

The post My Crucial Bearish Indicators, Plus a Critical Bullish One I Missed appeared first on Lee Adler’s Sure Money.

The WSJ Sounds Bullish Here. But They’re Ignoring Half the Equation

An article in the Wall Street Journal this week reported that private equity firms are sitting on a trillion in cash. That, of course is supposed to be bullish for stocks.

But that’s only half the story. Or less than half. It’s about the demand side of the equation for one investor sector out of many.

Let’s look at some of the factors on the other side of the ledger that show why this bullish WSJ piece is misleading and what we actually need to do…

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Here’s Why It’s Important That Stocks and Bonds Rallied Despite Tightening Liquidity

Monthly deficits have exploded since passage of the tax cut and Congressional Budget Busting Agreement. However, June was a tax collection month, padding the Treasury’s cash account. That allowed the Treasury to pay down a few T-bills in June. But there was still a big year to year increase in supply. Despite that, stocks and…

My Deadline Has Arrived. But There’s Still Hope for All You Bears

Back on June 22, my post ran with the headline, You Have Until July 10 to Prepare for The Collapse – Here’s What to Do.

Since then the S&P 500 has rallied from 2754 to 2794, a gain of 1.1%. It seems like a lot more doesn’t it?  That’s because it dipped a bit early in the period. Since closing just below 2700 on June 28 the SPX has risen a hearty 3.5%. The rally has been relentless, casting a pall over bears, and further cementing the complacency of bulls.

But despite these rallies, I’ve put together a variety of reasons why we probably shouldn’t be losing sleep over it… Although that’s easier said than done!

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