Today’s Market Comments:
Something is up. Something big is coming. We cannot be sure precisely when or what, but there are warnings from the technical indicators and patterns from the market this weekend that tell us the stock market is in an extremely dangerous place. Caution is warranted. We look for the Plunge Protection Team to be active at this time. Whether they succeed or not is to be determined.
Stocks were flat Friday, September 14th. The stock market generated its 11th Hindenburg Omen observation Friday for the official H.O. from August, and has now triggered 9 H.O. observations in nine consecutive days! This has not happened in the past 40 years we have tracked Hindenburg Omens. This tells us the market is in an extreme unhealthy condition, is fragile, and could plunge given a trigger event.
This does not mean a plunge is coming for certain, however every stock market crash (declines greater than 15 percent) over the past 40 years have been preceded by a Hindenburg Omen. There are large and growing Bearish divergences evident this weekend between the major U.S. stock averages and their 10 day average Advance/Decline Line Indicators, their Demand Power measures, and there is a Bearish divergence between the S&P 500 and our intermediate term Secondary Trend Indicator. Rising Bearish Wedge patterns are completing in the major averages. Downside price targets suggest a plunge will follow. We show charts for all of these patterns in this report.
Mining stocks and precious metals are bottoming, completing major corrective patterns since the 2016 top. The HUI Daily, Weekly and Monthly Full Stochastics are oversold. Once our HUI key trend-finder indicators generate new Buy signals, we will have confidence the next major Bull market is starting, wave 3-up.
Our Blue Chip key trend-finder indicators moved to a Sell signal September 6th, 2018 and remain there Friday, September 14th. The Purchasing Power Indicator component triggered a Sell signal Thursday, September 6th. The 14-day Stochastic Indicator generated a Sell on August 31st, and the 30 Day Stochastic Indicator generated a Sell on August 23rd, 2018. When these three indicators agree, it is a short-term (1 week to 3 months’ time horizon) key trend-finder directional signal. When these three indicators are in conflict with one another, it is a Neutral (Sideways) key trend-finder indicator signal.
Our intermediate term Secondary Trend Indicator generated a Buy signal Tuesday, July 3rd, and remains there Friday, September 14th, flat at (out of a possible 9 points), positive + 16, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power was flat at 378 Friday while Supply Pressure was flat at 367, telling us Friday’s move in Blue Chips was weak. This DP/SP Indicator moved to an Enter Long Signal Thursday, September 13th, and remains there Friday, September 14th, 2018.
The Plunge Protection Team Indicator moved back to an “OFF” signal on March 21st, which means the PPT is not as likely to support the markets while this indicator remains on an “OFF.” This means there is not likely to be significant government intervention at this time, or if there is it will not be effective. This indicator is designed to identify high probability periods where the PPT will be supporting, or buying the stock market (when it is on an “On” signal) and when it moves to a Neutral or Off signal (formerly called Sell), it does not mean the stock market will decline, it means the PPT’s interest in buying the market is off rather than on, and market forces outside the PPT are more likely to determine stock trends up or down. In other words, a Neutral or Off signal means the odds are higher that the PPT stands down or has little influence on price trends.
Caution: I would not bet the farm on a Crash. Crashes are rare and maybe the pattern will morph into something we presently do not see that is less ominous. Risk must be managed. Maybe the Fed buys the entire stock market, who knows given their track record. Maybe a black swan event is postponed several months.
Gold, Silver and Mining stocks fell slightly Friday. They generated a Sell signal Friday, July 13th, as the HUI 30 Day Stochastic triggered a Sell signal July 13th, and our HUI Purchasing Power Indicator generated a Sell on June 15th. When these two indicators agree, it is a directional signal, and when at odds with one another, it is a combination neutral signal. On May 29th, the HUI Demand Power / Supply Pressure Indicator moved to a Short signal. On Friday, September 14th, Demand Power fell 1 to 384 while Supply Pressure was flat at 416, telling us Friday’s HUI move was weak.
DJIA PPI Flat at + 87.45, on a Sell
DJIA 30 Day Stochastic Fast 73.33 Slow 72.00 On a Sell
DJIA 14 Day Stochastic Fast 63.33 Slow 61.11 On a Sell
DJIA % Above 30 Day Average 73.33
DJIA % Above 10 Day Average 63.33
DJIA % Above 5 Day Average 66.67
Secondary Trend Indicator Flat at Positive + 16, On a Buy
Demand Power Flat at 378, Supply Pressure Flat at 367 Buy
McClellan Oscillator Rose to Negative – 26.43
McClellan Osc Summation Index + 2085.66
Plunge Protection Team Indicator – 0.34, on an “OFF”
DJIA 10 Day Advance/Decline Indicator – 91.6 on a Sell
NYSE New Highs 108 New Lows 91
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated aSideways signal Tuesday, September 4th, 2018, and remain there September 14th, 2018. The NDX Purchasing Power Indicator generated a Buy on September 13th, the NDX 14 Day Stochastic triggered a Sell signal on September 4th, 2018 and the 30 Day Stochastic triggered a Buy signal on July 6th. When all three component indicators are in agreement on signals, it is a consensus directional signal. When they differ, it is a sideways signal.
The NDX Demand Power / Supply Pressure Indicator moved to anExit Long positions signal Thursday, September 6th and remains there September 14th. On Friday September 14th, Demand Power fell 2 to 411, while Supply Pressure was flat at 410, telling us Friday’s decline was weak.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal September 11th, 2018, and needs to rise above positive + 5.0 for a new Buy. It fell to zero (0.0) on Friday, September 14th.
NDX PPI Fell 1 to + 271.74 On a Sell
NDX 30 Day Stochastic Fast 54.76 Slow 57.38 On a Buy
NDX 14 Day Stochastic Fast 48.81 Slow 50.00 On a Sell
NDX 10 Day Advance/Decline Line Indicator + 0.0 On a Sell
NDX Demand Power Fell 2 to 411, Supply Pressure Flat at 410 Buy
RUT PPI Rose 1 to 195.59 on a Sell
RUT 10 Day Advance/Decline Line Indicator – 99.90 On a Buy
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Sell signal July 13th, 2018.
HUI PPI Flat at + 152.34, on a Sell, Needs 154.78 for a new Buy.
HUI 30 Day Stochastic Fast 15.00, Slow 13.33 on a Sell
HUI Demand Power Fell 1 to 384; Supply Pressure Flat at 416, Sell