Today’s Market Comments:
Stocks fell sharply Friday, November 9th, on rising volume. The decline generated new Sell signals in our Blue Chip, tech, and small cap Purchasing Power Indicators. It is possible that this means corrective wave 2-up, the partial retracement of the October plunge is complete, or nearly so. If this is the case, the stock market could be on the brink of a greater plunge than what occurred in October. Deeper and longer. I have been getting emails asking what are the troubles that the stock market could be seeing, what could happen that would destroy the economy and bring on the next Bear market? Will the next Bear market be worse than 2007 through 2009’s? The stock market is a predictor of future economic prosperity or deficit. What was the October 2018 plunge seeing?
While it is impossible to fully understand the political and economic events coming that could cause the next Bear market, or occur coincident with it, we are now seeing several events that are not positives, and quite frankly are bizarre, perhaps never seen before.
The Federal Reserve is irresponsibly tightening the money supply with its $80 billion per month Quantitative Tightening program, where it sucks $80 billion from the economy in exchange for securities on its $4.0 trillion bloated balance sheet. This is occurring at the same time it is aggressively raising interest rates, while the housing market heads into the tank. Too far, too fast.
There is political civil war brewing. It is evident everywhere. Florida is a powder keg waiting to explode with bitter election recounts for the Governor and U.S. Senate. Arizona and Georgia also are in bitter disputes over who won their Senate and Governor races. How is this possible in 2018 with all the technology available? It is not about technology. It is political civil war.
Environmentally, California fires are devastating once bountiful habitations. These are bizarre fires, not like irresponsible campfire negligence, not like natural lightening strike incendiaries. Houses and automobiles are burning and melting, while adjacent trees and greenery remain untouched. Microwave lasers are new weaponry that fit this description. Throw grass into your microwave at home, it wil not burn. Put metal in it, and sparks fly. Has war started? Who is the enemy?
Are you following this story? Red Tide annihilation of coastal fish along the Gulf coast of Florida, which has now spread around Miami and up toward Fort Lauderdale, being pegged as “algae,” has a similar characteristic as World War I mustard gas. The dead fish are toxic, and it is hazardous for humans to touch them. Backhoes are scooping them up off the beaches. Let’s hope they are not ending up in our restaurants, markets, or pet foods. Let’s hope they are being discarded safely in a contained hazardous waste environment. The spin is it is fertilizer from a lake, or it is normal algae. But, it is worsening, spreading, going on now for nine months. Not only are beaches packed with dead fish, not only are huge sea creatures such as Manatees dying, but breathing the air is troublesome to humans, lung conditions evident among those near beaches. The diagnosis for these ailments? Pneumonia. Tourism is being affected drastically. Is this War? Or Terrorism? Who is the enemy here?
Has anyone noticed the Chem trails in the sky? And how they turn a blue sky into a cloudy day within hours? These are not normal clouds. Streaks of white that thicken and turn gray. You can watch the airplanes dusting the skies. Crisscrossing patterns, not dissipating over time, but thickening. Toxic waste being dropped from the skies? 5G towers are popping up all over the place, raised in what seems to be secret, polluting the landscapes. More frequent than the occasional cellphone towers, shorter, eyes sores. The 5G technology airwaves that are coming with this wireless technology have frequencies that some experts are claiming could be harmful to humans.
Technology pollution is here, like some science fiction movie from the eighties. The major question is, will the benefits exceed the dangers? How will all of this affect the stock market? October’s plunge meant something. The market is communicating to us. Is the stock market telling us that it sees trouble ahead, troubles we could not have imagined two decades ago? This is a Grand Supercycle degree wave IV Bear market starting. Correcting a multi-century Bull market. It will be worse than anything we have seen previously in our lifetimes. It may be starting now.
Metals and Mining stocks fell Friday, and our HUI key trend-finder indicators remain on a Sell signal. Once wave 3 down’s plunge starts in stocks, Metals and Miners should rise sharply.
Our Blue Chip key trend-finder indicators moved to a Sideways signal November 9th, 2018 and remain there Friday, November 9th. The Purchasing Power Indicator component triggered a Sell signal Friday, November 9th. The 14-day Stochastic Indicator generated a Buy on October 30th, and the 30 Day Stochastic Indicator generated a Buy on October 30th, 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 Friday, November 9th, losing 8 points (out of a possible 9 points), to negative -11. It will need to rise above positive + 5 for a new Buy signal.
Demand Power fell 5 to 422 Friday while Supply Pressure rose 6 to 422, telling us Friday’s decline in Blue Chips was moderate to strong. This DP/SP Indicator moved to an Exit Long Signal November 9th, and remains there Friday, November 9th, 2018. The previous Sell signal identified the start of the October plunge.
The Plunge Protection Team Indicator moved to an “OFF” signal on October 25th, which means the PPT is not 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. 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 fell Friday . They generated a Sell signal Thursday, October 25th, as the HUI 30 Day Stochastic triggered a Sell signal October 24th, and our HUI Purchasing Power Indicator generated a Sell on October 25th. 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 Short signal Wednesday, October 24th. On Friday, November 9th, Demand Power fell 5 to 391 while Supply Pressure rose 5 to 431, telling us Friday’s HUI decline was moderate.
DJIA PPI fell 5 to 36.44, on a Sell
DJIA 30 Day Stochastic Fast 80.00 Slow 69.33 On a Buy
DJIA 14 Day Stochastic Fast 96.67 Slow 90.00 On a Buy
DJIA % Above 30 Day Average 80.00
DJIA % Above 10 Day Average 93.33
DJIA % Above 5 Day Average 66.67
Secondary Trend Indicator Fell 8 to Negative -11, On a Sell
Demand Power Fell 5 to 422, Supply Pressure rose 6 to 422 Neutral
McClellan Oscillator Fell to Positive + 111.20
McClellan Osc Summation Index – 384.82
Plunge Protection Team Indicator – 9.35, on an “OFF”
DJIA 10 Day Advance/Decline Indicator + 377.6 on a Buy
NYSE New Highs 60 New Lows 109
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicatorsgenerated a Sideways signal Friday, November 9th, 2018, and remain there November 9th, 2018. The NDX Purchasing Power Indicator generated a Sell on November 9th, the NDX 14 Day Stochastic triggered aBuy signal on October 30th, 2018 and the 30 Day Stochastic triggered a Buy signal on November 1st. 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 Short positions signal Wednesday, November 7th and remains there November 9th. On Friday November 9th, Demand Power fell 6 to 457, while Supply Pressure rose 5 to 464, telling us the rise was moderate.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal November 1st, 2018, and needs to rise above positive + 5.0 for a new Buy. It fell to positive + 18.0 on Friday, November 9th.
NDX PPI Fell 11 to 182.47 On a Sell
NDX 30 Day Stochastic Fast 54.76 Slow 50.24 On a Buy
NDX 14 Day Stochastic Fast 65.48 Slow 74.29 On a Buy
NDX 10 Day Advance/Decline Line Indicator + 18.0 On a Buy
NDX Demand Power Fell 6 to 457, Supply Pressure Up 5 to 464 Neutral
RUT PPI Fell 7 to 152.18 on a Sell
RUT 10 Day Advance/Decline Line Indicator + 283.3 On a Buy
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Sell signal October 25th, 2018.
HUI PPI Fell 1 to + 160.11, on a Sell
HUI 30 Day Stochastic Fast 30.00, Slow 37.22 on a Sell
HUI Demand Power Fell 5 to 391; Supply Pressure Up 5 to 431, Sell