Today’s Market Comments:
Stocks rose sharply Thursday, September 20th, whipsawing our key indicators back to Buy signals. The Blue Chip and Tech Purchasing Power Indicators, 30 day and 14 day stochastics are now on Buy signals. The Industrials and S&P 500 hit new all-time highs Thursday.
The short-term market forecast is challenging tonight, because we have conflicting evidence. The Elliott Wave mapping has been waiting for new all-time highs in the Industrials and S&P 500 since they are inside large degree wave v-up rallies to complete the Bull market from 2015. So, today’s new highs fit the wave mapping which is looking for a top, perhaps an imminent top. The reason we say imminent is because since July 2018, these indices have been forming Rising Bearish Wedge patterns, and they needed another rally leg to finish the patterns. If so, the rally this week is the final subwave e-up for these Bearish Wedges, which are termination top patterns.
If the stock market is topping, then our key indicators will be whipsawed soon back to Sells. Whipsawing of signals is not unusual for triangles and wedges of large degree. The Industrials closed about 200 points above its two standard deviation upper Bollinger Band, which is an outlier overbought measure, supporting that a top is close at hand.
The stock market also generated its 15th Hindenburg Omen observation Thursday for the official H.O. from August 14th, the 13th consecutive day for an observation, in spite of the strong rally, with New Lows uncharacteristically high at a time when the stock market is hitting a new all-time price high. This warns us the stock market is in a fragile condition at this time, susceptible to a strong reversal decline should a black swan event occur.
Our HUI Mining stock key trend-finder indicators remain on a Buy signal Thursday, suggesting a new Bull market may be starting in Metals and Miners.
Our Blue Chip key trend-finder indicators moved to a Buy signal September 20th, 2018 and remain there Thursday, September 20th. The Purchasing Power Indicator component triggered a Buy signal Wednesday, September 19th. The 14-day Stochastic Indicator generated a Buy on September 20th, and the 30 Day Stochastic Indicator generated a Buy on September 20th, 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 Thursday, September 20th, rising 7 points (out of a possible 9 points), to positive + 23, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power rose 6 to 384 Thursday while Supply Pressure fell 4 to 367, telling us Thursday’s rise in Blue Chips was moderate with short-covering about a third of the Buying. This DP/SP Indicator moved to an Enter Long Signal Thursday, September 13th, and remains there Thursday, September 20th, 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 were flatThursday. They generated a Buy signal Wednesday, September 19th, as the HUI 30 Day Stochastic triggered a Buy signal September 18th, and our HUI Purchasing Power Indicator generated a Buy on September 19th. 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 Exit Short signal Wednesday, September 19th. On Thursday, September 20th, Demand Power rose 1 to 401 while Supply Pressure fell 1 to 399, telling us Thursday’s HUI move was weak.
DJIA PPI Rose 5 to + 92.89, on a Buy
DJIA 30 Day Stochastic Fast 90.00 Slow 78.67 On a Sell
DJIA 14 Day Stochastic Fast 86.67 Slow 70.00 On a Sell
DJIA % Above 30 Day Average 90.00
DJIA % Above 10 Day Average 90.00
DJIA % Above 5 Day Average 96.67
Secondary Trend Indicator Flat at Positive + 23, On a Buy
Demand Power Up 6 to 384, Supply Pressure Fell 4 to 367 Buy
McClellan Oscillator Rose to Negative – 1.02
McClellan Osc Summation Index + 1929.32
Plunge Protection Team Indicator – 0.10, on an “OFF”
DJIA 10 Day Advance/Decline Indicator + 95.8 on a Sell
NYSE New Highs 90 New Lows 94
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated a Buy signal Thursday, September 20th, 2018, and remain there September 20th, 2018. The NDX Purchasing Power Indicator generated a Buy on September 20th, the NDX 14 Day Stochastic triggered a Buy signal on September 20th, 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 Short positions signal Thursday, September 20th and remains there September 20th. On Thursday September 20th, Demand Power rose 5 to 416, while Supply Pressure fell 5 to 410, telling us Thursday’s rise was moderate.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal September 20th, 2018, and needs to fall below negative – 5.0 for a new Sell. It rose to positive + 14.4 on Thursday, September 20th.
NDX PPI Rose 9 to + 276.10 On a Buy
NDX 30 Day Stochastic Fast 60.71 Slow 54.52 On a Buy
NDX 14 Day Stochastic Fast 65.48 Slow 47.86 On a Buy
NDX 10 Day Advance/Decline Line Indicator + 14.4 On a Buy
NDX Demand Power Up 5 to 416, Supply Pressure Fell 5 to 410 Neutral
RUT PPI Up 4 to 195.86 on a Sell
RUT 10 Day Advance/Decline Line Indicator + 9.1 On a Sell
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Buy signal September 19th, 2018.
HUI PPI Flat at + 156.44, on a Buy
HUI 30 Day Stochastic Fast 55.00, Slow 28.33 on a Buy
HUI Demand Power Up 1 to 401; Supply Pressure Fell 1 to 399, Neutral