Today’s Market Comments:
Stocks fell hard Friday, July 27th, with Techs and small caps leading the way lower in spite of a strong GDP number. The decline followed early warning Bearish Divergences between the major indices and their 10 day average Advance/Decline Line Indicator. Our Blue Chip key trend-finder indicators remain on a Buy signal this weekend. Techs are on a Sideways signal, and small caps a Sell. The decline looks to be corrective inside larger degree wave v-up rising trends to complete the Bull market from 2015, rising inside a well defined trend-channel, which we show in charts this weekend. The pattern for most of 2018 was a sideways wave iv down triangle that looks complete in all the indices. As wave v-up continues, breadth should weaken, rallies should weaken, and corrections could be strong. This is typical of an ending major Bull market.
While the HUI Mining stocks key trend-finder indicator remains on a Sell signal this weekend, we are seeing the start of Bullish divergences between the Index and both its 10 day average Advance/Decline Line Indicator, and its Demand Power measure, which serve as an early indication that the corrective decline from 2016 is approaching a bottom. Once we get a new Buy signal in our HUI Purchasing Power Indicator and our HUI 30 day Stochastic, we will have strong evidence that a new Bull market is starting in Miners and precious metals.
The U.S. Dollar has completed a Bullish Inverse Head & Shoulders Bottom with an upside price target of 102ish. We show this chart in tonight’s report.
Our Blue Chip key trend-finder indicators moved to a Buy signal July 9th, 2018 and remain there Friday, July 27th. The Purchasing Power Indicator component triggered a Buy signal Thursday, July 5th. The 14-day Stochastic Indicator generated a Buy on June 14th, and the 30 Day Stochastic Indicator generated a Buy on July 9th, 2018. When these three indicators are in agreement, 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, July 27th, dropping 6 (out of a possible 9 points), positive + 18, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power fell 4 to 390 Friday while Supply Pressure rose 6 to 378, telling us Friday’s decline in Blue Chips was moderate. This DP/SP Indicator moved to an Enter Long Signal Friday, July 6th, and remains there Friday, July 27th, 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 flat to slightly lower Friday, July 27th. 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 are in agreement, 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, July 27th, Demand Power rose 1 to 384 while Supply Pressure was flat at 412, telling us Friday’s HUI move was weak.
DJIA PPI Fell 4 to + 72.41, on a Buy
DJIA 30 Day Stochastic Fast 60.00 Slow 56.67 On a Buy
DJIA 14 Day Stochastic Fast 76.67 Slow 75.00 On a Buy
DJIA % Above 30 Day Average 60.00
DJIA % Above 10 Day Average 76.67
DJIA % Above 5 Day Average 66.67
Secondary Trend Indicator Fell 6 to Positive + 18, On a Buy
Demand Power Fell 4 to 390, Supply Pressure Rose 6 to 378 Buy
McClellan Oscillator Rose to negative – 63.53
McClellan Osc Summation Index + 2729.80
Plunge Protection Team Indicator -1.12, on an “OFF”
DJIA 10 Day Advance/Decline Indicator -32.2 on a Buy
NYSE New Highs 71 New Lows 40
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicatorsgenerated a Sideways signal Tuesday, July 24th, 2018, and remain there July 27th, 2018. The NDX Purchasing Power Indicator generated a Sell on July 26th, the NDX 14 Day Stochastic triggered aSell signal on July 24th, 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 an Enter Buy positions signalFriday, July 6th and remains there July 27th. On Friday July 27th, Demand Power fell 4 to 422, while Supply Pressure rose 8 to 415, telling us Friday’s decline was strong with deep pockets intervention supporting prices.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal July 27th, 2018, and needs to fall below negative – 5.0 for a new Sell. It fell to negative -7.6 on Friday, July 27th.
NDX PPI Fell 13 to + 262.81 On a Sell
NDX 30 Day Stochastic Fast 66.67 Slow 65.71 On a Buy
NDX 14 Day Stochastic Fast 51.19 Slow 61.43 On a Sell
NDX 10 Day Advance/Decline Line Indicator -7.6 On a Sell
NDX Demand Power Fell 4 to 422, Supply Pressure Rose 8 to 415 Buy
RUT PPI Fell 10 to + 184.89 on a Sell
RUT 10 Day Advance/Decline Line Indicator – 134.3 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 173.48, on a Sell
HUI 30 Day Stochastic Fast 20.00, Slow 21.11 on a Sell
HUI Demand Power Up 1 to 384; Supply Pressure Flat at 412, Sell