Today’s Market Comments:
Stocks were mixed Thursday, September 6th, the Industrials up, everything else down, with techs down hard. Our Blue Chip key trend-finder indicators generated a new Sell signal Thursday, including a new Sell from our important Purchasing Power Indicator.
The market generated another Hindenburg Observation Thursday, the fifth for the “official” potential stock market crash signal from August 2018. The stock market sits in an extremely vulnerable position at this time, as Elliott Wave mappings can consider that wave v-up may have topped. If so, a plunge is a possibility starting soon. If this developing declining trend is merely a corrective decline within wave v-up, then stocks should drop in an orderly and shallow move over the coming weeks. The speed and intensity of selling next week should tell us which of the two scenarios is occurring.
If the Fed raises short-term interest rates this month, it is likely the stock market will not accept this as prudent and appropriate policy. Real Estate is slowing, employment growth is slowing, global stock markets are plunging, natural disasters (fire, draught, earthquakes, increasing solar heat intensity) and pestilences (Deadly Red Tide contamination of waters in Florida and the Arctic to name just one) are increasing, family supporting income growth is falling behind hyperinflation costs), Washington’s political civil war is escalating, etc. . . All this just scratching the surface. The Fed needs to pull its head up out of the sand, or wherever it parks it these days, take a deep breath of smoggy air, and get real.
As the stock market sinks, we should see precious metals and mining stocks bottom and start their next Bull market. New Buy signals in our HUI key trend-finder indicators would be the evidence we are waiting for to have strong conviction the Bull market has started.
Our Blue Chip key trend-finder indicators moved to a Sell signal September 6th, 2018 and remain there Thursday, September 6th. 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 Thursday, September 6th, falling 4 points (out of a possible 9 points), positive + 6, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power fell 2 to 377 Thursday while Supply Pressure rose 3 to 370, telling us Thursday’s move in Blue Chips was mild. This DP/SP Indicator moved to an Enter Long Signal Friday, August 17th, and remains there Thursday, September 6th, 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 Miners were essenti ally Flat Thursday . 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 Thursday, September 6th, Demand Power fell 1 to 378 while Supply Pressure fell 2 to 426, telling us Thursday’s HUI decline was weak.
DJIA PPI Fell 2 to + 83.04, on a Sell
DJIA 30 Day Stochastic Fast 73.33 Slow 70.00 On a Sell
DJIA 14 Day Stochastic Fast 56.67 Slow 65.56 On a Sell
DJIA % Above 30 Day Average 73.33
DJIA % Above 10 Day Average 60.00
DJIA % Above 5 Day Average 53.33
Secondary Trend Indicator Fell 4 to Positive + 6, On a Buy
Demand Power Fell 1 to 378, Supply Pressure Up 3 to 370 Buy
McClellan Oscillator Fell to Negative -82.5
McClellan Osc Summation Index + 2478.51
Plunge Protection Team Indicator – 2.64, on an “OFF”
DJIA 10 Day Advance/Decline Indicator -98.9 on a Buy
NYSE New Highs 99 New Lows 109
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 6th, 2018. The NDX Purchasing Power Indicator generated a Sell on September 5th, 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 6th. On Thursday September 6th, Demand Power fell 3 to 410, while Supply Pressure rose 6 to 414, telling us Thursday’s decline was moderate.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal August 6th, 2018, and needs to fall below negative – 5.0 for a new Sell. It fell to positive + 3.2 on Thursday, September 6th.
NDX PPI Fell 7 to + 263.37 On a Sell
NDX 30 Day Stochastic Fast 53.57 Slow 58.81 On a Buy
NDX 14 Day Stochastic Fast 45.24 Slow 61.43 On a Sell
NDX 10 Day Advance/Decline Line Indicator -98.9 On a Buy
NDX Demand Power Fell 3 to 410, Supply Pressure Up 6 to 414 Buy
RUT PPI Fell 3 to + 194.43 on a Buy
RUT 10 Day Advance/Decline Line Indicator -92.9 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 149.67, on a Sell, Needs 155.67 for a new Buy.
HUI 30 Day Stochastic Fast 10.00, Slow 10.00 on a Sell
HUI Demand Power Fell 1 to 378; Supply Pressure Fell 2 to 426, Sell