Today’s Market Comments:
Stocks fell modestly Friday, November 10th. Our key trend-finder indicators remain on a Sideways (Neutral) signal this weekend. Stocks are very close to finishing the Bull Market from 2009, and will soon begin the next great Bear market. With the typical Bullish seasonal period starting now, we cannot confirm the top is yet in. Once we get new Sell signals in our key indicators, we will have strong evidence the next bear market in stocks has started. If we look at the charts on pages 16, 17, and 22 in this weekend’s report we see large and huge Bearish divergences between major stock indices and their 10 day average Advance/Decline Line Indicators. On page 33 we see an important Bearish divergence between the NYSE Cumulative Advance/Decline Line Indicator and the Dow Industrials. This is important because before most major stock market tops and the start of major declines, we usually see such a divergence. We have that now. Breadth is not following stock index prices. Other early warnings are in place. There are two official Hindenburg Omens on the clock at the same time right now. This indicator identifies a set of conditions in the stock market that often point to coming major sell-offs. It identifies when the stock market is in a particularly fragile place, susceptible to sharp declines. There are large stock market patterns that are either complete, of very nearly so, another early warning of an approaching serious sell-off. But until we get new Sell signals in the key indicators, more upside is possible.
Our Blue Chip key trend-finder indicators moved to a Sideways signal Wednesday, October 25th, 2017 and remain there Friday, November 10th. The Purchasing Power Indicator component triggered a Buy signal Wednesday, August 30th. The 14-day Stochastic Indicator generated a Sell on October 25th, and the 30 Day Stochastic Indicator generated a Buy on October 2nd. 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 Wednesday, August 30th, and remains there Friday, November 10th, falling 3 points Friday (out of a possible 9 points), to positive + 26, needing to drop below negative -5 threshold for a new Sell.
Demand Power fell 2 to 374 Friday while Supply Pressure rose 1 to 381, telling us Friday’s decline in Blue Chips was mild. This DP/SP Indicator moved to an Exit Long Signal Wednesday, October 18th, and remains there Friday, November 10th, 2017.
The Plunge Protection Team Indicator moved back to an “Off” signal on August 23rd, which means the PPT is likely to stand down from supporting the markets while this indicator remains on an “Off.” This does not mean stocks cannot rally, it just means there is not 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 a Buy signal) and when it moves to a Neutral of 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 and Miners fell Friday, November 10th. They generated a Sell signal Friday, September 15th, as the HUI 30 Day Stochastic triggered a Sell signal September 15th, and our HUI Purchasing Power Indicator generated a Sell on September 11th. 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 September 18th, the HUI Demand Power / Supply Pressure Indicator triggered an Enter Short signal. On Friday, November 10th, Demand Power fell 4 to 374 while Supply Pressure rose 5 to 416, telling us Friday’s HUI decline was moderate.
DJIA PPI Flat at + 70.14 on a Buy
DJIA 30 Day Stochastic Fast 60.00 Slow 65.33 On a Buy
DJIA 14 Day Stochastic Fast 40.00 Slow 56.67 On a Sell
DJIA % Above 30 Day Average 60.00
DJIA % Above 10 Day Average 33.33
DJIA % Above 5 Day Average 30.00
Secondary Trend Indicator Fell 3 to Positive + 26, On a Buy
Demand Power Fell 2 to 374, Supply Pressure Up 1 to 381 Neutral
McClellan Oscillator fell to negative -110.50 from -96.52
McClellan Osc Summation Index + 2414.80
Plunge Protection Team Indicator positive + 2.91, on an “Off”
DJIA 10 Day Advance/Decline Indicator – 83.6 on a Sell
NYSE New Highs 77 New Lows 61
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated aSideways signal Wednesday, October 25th, 2017, and remain there November 10th, 2017. The NDX Purchasing Power Indicator generated a Buy on October 27th, the NDX 14 Day Stochastic triggered a Sell signal on October 25th, 2017 and the 30 Day Stochastic triggered a Buy signal on August 30th. 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 Exit Long positions signal Wednesday, October 18th and remains there November 10th. On Friday November 10th, Demand Power fell 1 to 417, while Supply Pressure fell 1 to 417, telling us Friday’s decline was weak.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal November 8th, needing to rise above positive + 5.0 for a new Buy. It fell to positive + 2.2 on Friday, November 10th, 2017.
NDX PPI Flat at + 207.88 On a Buy
NDX 30 Day Stochastic Fast 48.00 Slow 48.00 On a Buy
NDX 14 Day Stochastic Fast 47.00 Slow 48.40 On a Sell
NDX 10 Day Advance/Decline Line Indicator + 2.2 On a Buy
NDX Demand Power Fell 1 to 417, Supply Pressure Fell 1 to 417 Neutral
RUT PPI Flat at 165.27 on a Sell
RUT 10 Day Advance/Decline Line Indicator – 150.6 On a Buy
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Sell signal September 15th, 2017.
HUI PPI Fell 1 to 181.94, on a Sell
HUI 30 Day Stochastic Fast 40.00, Slow 33.33 on a Buy
HUI Demand Power Fell 4 to 374; Supply Pressure Up 5 to 416, Sell