Today’s Market Comments:
Stocks were flat to slightly lower Friday, May 18th. Our Blue Chip and NASDAQ 100 key trend-finder indicators are on a Sideways signal this weekend. Our small cap Russell 2000 Purchasing Power Indicator remains on a Buy signal. Stocks are completing large degree triangle patterns from January 2018. We are watching for a breakout up or down from this pattern to start the next major vertical trend. We are leaning toward the scenario where stocks break higher from these triangles as they are most likely continuation patterns within a large rising trend-channel from August 2015. If so, these triangles are wave iv down and next is wave v-up. We show charts for these triangles and the trend-channel on pages 34 through 39. The Russell 2000 has formed and likely completed an Ascending Bullish Triangle, and small caps look to have broken out to the upside above this pattern’s horizontal upper boundary line. This supports the thesis that the coming breakout in the stock market will be up.
We also show in the chart on page 33 that the NYSE Cumulative Advance/Decline Line has continued to rise over the past four months as these triangles formed, which is a Bullish divergence. If stocks were about to end a major top and begin a new major decline next, we should be seeing the opposite, a Bearish divergence. This supports the possibility that stocks are about to begin wave v-up. Now wave v-up should bring about the conclusion of the Bull market from 2009. If so, we should see a Bearish divergence between this NYAD and the major market averages as wave v-up matures.
There is a phi mate turn date ideally scheduled for May 22nd, 2018, and a Bradley model turn date due June 1st. Since these cycle turn dates can vary by as much as a week from their scheduled dates, it is possible they are both pointing to the same trend turn. This should be the vertical breakout trend from the triangle patterns that have dominated the stock market for most of 2018.
Gold and Silver are finishing sideways triangle patterns that should lead to an upside breakout. The U.S. Dollar may have completed its initial rising trend and may be about to correct lower. Oil is inside a large degree rising trend. U.S. Bonds are close to bottoming, and a rally back toward 150 could soon start. We show charts for all these markets in this weekend’s newsletter.
Our Blue Chip key trend-finder indicators moved to a Sideways signal May 18th, 2018 and remain there Friday, May 18th. The Purchasing Power Indicator component triggered a Buy signal Friday, May 4th. The 14-day Stochastic Indicator generated a Sell on May 18th, and the 30 Day Stochastic Indicator generated a Buy on May 7th, 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 Wednesday, August 30th, and remains there Friday, May 18th, falling 3 points (out of a possible 9 points), at positive + 16, needing to drop below negative -5 threshold for a new Sell.
Demand Power fell 2 to 395 Friday while Supply Pressure was flat at 374, telling us Friday’s move in Blue Chips was weak. This DP/SP Indicator moved to an Enter Long Signal Wednesday, May 2nd, and remains there Friday, May 18th, 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, Silve r and Miners were flat Friday, May 18th, working through the final moves they need to complete Bullish triangles. Silver’s triangle may be complete. They moved to a Sideways signal Monday, April 30th, as the HUI 30 Day Stochastic triggered a Sell signal April 30th, and our HUI Purchasing Power Indicator generated a Buy on March 26th. 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 16th, the HUI Demand Power / Supply Pressure Indicator moved to an Enter Short signal. On Friday, May 18th, Demand Power was flat at 391 while Supply Pressure fell 2 to 399, telling us Friday’s HUI move was weak.
DJIA PPI Fell 1 to + 53.87, on a Buy
DJIA 30 Day Stochastic Fast 60.00 Slow 64.67 On a Buy
DJIA 14 Day Stochastic Fast 70.00 Slow 81.67 On a Sell
DJIA % Above 30 Day Average 60.00
DJIA % Above 10 Day Average 56.67
DJIA % Above 5 Day Average 33.33
Secondary Trend Indicator Fell 3 to Positive + 16, On a Buy
Demand Power Fell 2 to 395 Supply Pressure Flat at 374 Buy
McClellan Oscillator fell to positive + 51.54
McClellan Osc Summation Index + 2265.83
Plunge Protection Team Indicator – 5.93, on an “OFF”
DJIA 10 Day Advance/Decline Indicator + 343.4 on a Buy
NYSE New Highs 112 New Lows 72
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicatorsgenerated a Sideways signal Thursday, April 26th, 2018, and remain there May 18th, 2018. The NDX Purchasing Power Indicator generated a Sell on May 17th, the NDX 14 Day Stochastic triggered a Buy signal on May 4th, 2018 and the 30 Day Stochastic triggered a Sell signal on April 24th. 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 Long positions signal Monday, May 7th and remains there May 18th. On Friday May 18th, Demand Power fell 4 to 424, while Supply Pressure rose 1 to 407, telling us Friday’s rise was mild and due more to a lack of selling interest rather than a strong urge to buy.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal May 7th, 2018, and needs to fall below negative – 5.0 for a new Sell. It fell to positive + 14.8 on Friday, May 18th.
NDX PPI Fell 2 to + 220.38 On a Sell
NDX 30 Day Stochastic Fast 54.00 Slow 57.00 On a Sell
NDX 14 Day Stochastic Fast 55.00 Slow 60.40 On a Buy
NDX 10 Day Advance/Decline Line Indicator + 14.8 On a Buy
NDX Demand Power Fell 4 to 420, Supply Pressure Up 2 to 409 Buy
RUT PPI Flat at +186.10 on a Buy
RUT 10 Day Advance/Decline Line Indicator + 343.7 On a Buy
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Sideways signal February 27th, 2018.
HUI PPI Flat at 182.94, on a Buy
HUI 30 Day Stochastic Fast 40.00, Slow 48.33 on a Sell
HUI Demand Power Flat at 391; Supply Pressure Fell 2 to 399, Sell