Today’s Market Comments:

 

Stocks plunged early Tuesday, October 23rd, then rebounded, retracing a large portion of the gap down move, but finished down for the day. Tuesday’s plunge was the large price move the small change in the McClellan Oscillator Monday suggested was coming. There were no changes to our key trend-finder indicators from Tuesday’s decline. They remain on neutral signals. The Purchasing Power Indicator for Blue Chips, techs, and small caps remain on Sells. It is possible the decline Tuesday was part of small degree wave {1} down of larger degree 3-down. If so, the bounce is corrective, and more decline is coming.

 

Interestingly, Tuesday’s sharp decline completed a Head & Shoulders top Bearish Pattern for both the Industrials and the NASDAQ 100. These patterns have downside price targets of 23,000 and 6,300 respectively. We show those in charts tonight.

 

New NYSE Lows have run above 79 for 36 consecutive trading days, which is an astonishing and dangerous condition. 

 

Precious metals and Mining stocks rose Tuesday, remaining on a Buy signal. Precious metals and Mining stocks could rally sharply as wave 3-down takes stocks sharply lower.

Our Blue Chip key trend-finder indicators moved to a Neutral signal October 18th, 2018 and remain there Tuesday, October 23rd. The Purchasing Power Indicator component triggered a Sell signal Thursday, October 18th. The 14-day Stochastic Indicator generated a Buy on October 17th, and the 30 Day Stochastic Indicator generated a Buy on October 17th, 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 Sell signal Wednesday, October 10th, and remains there Tuesday, October 23rd, falling 8 points (out of a possible 9 points), to negative -19. It will need to rise above positive + 5 for a new Buy signal.

Demand Power fell 4 to 369 Tuesday while Supply Pressure rose 5 to 440, telling us Tuesday’s decline in Blue Chips was moderate to strong. This DP/SP Indicator moved to an Enter Short Signal October 4th, and remains there Tuesday, October 23rd, 2018.

The Plunge Protection Team Indicator moved to an “ON” signal on October 11th, which means the PPT is likely to support the markets while this indicator remains on an “ON.” This means there is likely to be significant government intervention at this time. 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 rose Tuesday . They generated a Buy signal Thursday, October 11th, as the HUI 30 Day Stochastic triggered a Buy signal October 11th, 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. The HUI Demand Power / Supply Pressure Indicator moved to an Enter Long signal Thursday, October 11th. On Tuesday, October 23rd, Demand Power rose 2 to 407 while Supply Pressure fell 2 to 410, telling us Tuesday’s HUI rise was mild.

DJIA PPI fell 4 to 32.88, on a Sell

DJIA 30 Day Stochastic Fast 36.67 Slow 32.67 On a Buy

DJIA 14 Day Stochastic Fast 33.33 Slow 31.67 On a Buy

DJIA % Above 30 Day Average 36.67

DJIA % Above 10 Day Average 53.33

DJIA % Above 5 Day Average 33.33

Secondary Trend Indicator Fell 8 to Negative -19, On a Sell

Demand Power fell 4 to 367, Supply Pressure rose 5 to 440 Sell

McClellan Oscillator Fell to Negative – 134.10

McClellan Osc Summation Index -797.43

Plunge Protection Team Indicator + 30.1, on an “ON”  

DJIA 10 Day Advance/Decline Indicator – 506.6 on a Sell

NYSE New Highs 8 New Lows 496

Today’s Technology NDX Market Comments:

The NDX Short-term key Trend-finder Indicators generated aSideways signal Thursday, October 18th, 2018, and remain there October 23rd, 2018. The NDX Purchasing Power Indicator generated a Sell on October 18th, the NDX 14 Day Stochastic triggered a Buy signal on October 16th, 2018 and the 30 Day Stochastic triggered a Buy signal on October 16th. 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 anEnter Short positions signal Thursday, October 4th and remains there October 23rd. On Tuesday October 23rd, Demand Power fell 3 to 409, while Supply Pressure rose 2 to 464, telling us the decline was mild.

 

The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal October 4th, 2018, and needs to rise above positive + 5.0 for a new Buy. It fell to negative -16.8 on Tuesday, October 23rd. 

NDX PPI Fell 2 to 198.30 On a Sell

NDX 30 Day Stochastic Fast 9.52 Slow 11.90 On a Buy

NDX 14 Day Stochastic Fast 20.24 Slow 19.05 On a Buy

NDX 10 Day Advance/Decline Line Indicator -16.8 On a Sell

NDX Demand Power Fell 3 to 409, Supply Pressure Up 2 to 464 Sell

RUT PPI Fell 3 to 147.34 on a Sell

RUT 10 Day Advance/Decline Line Indicator – 440.2 On a Sell

Today’s Mining Stocks and Precious Metals Market Comments:

Our HUI key trend-finder indicators moved to a Buy signal October 11th, 2018.

HUI PPI Flat at + 168.85, on a Buy

HUI 30 Day Stochastic Fast 70.00, Slow 81.67 on a Buy

HUI Demand Power Up 2 to 407; Supply Pressure Fell 2 at 410, Buy