Today’s Market Comments:

Stocks plunged Friday, December 14th, struggling to find the typical December rally, the Industrials down 496, the S&P 500 down 50, and the NDX down 173 points. The Industrials, S&P 500 and NASDAQ are all down over 10 percent from their 2018 highs. They better bounce soon if subwave {c}-up of{2} up is coming. This would give investors one more chance to get out before wave {3}down of large degree 3-down starts in earnest.

 

If stocks continue to fall from here, then we must conclude they have started wave {3}down, subwave {i} down of {3} down now underway. The stock market is sitting on the precipice of a market crash if this mapping is correct, and wave {3} down of 3-down is next. Perhaps stocks bounce around through the end of this month, before the acceleration phase of the coming decline., perhaps in January 2019.

 

The Federal Reserve meets this week and will announce its latest decision on short-term interest rates. There is considerable asset depreciation occurring at this time, and the Fed is already wiping out $80 billion of money from the economy each month as they unload their unwanted securities held on their balance sheet on the economy. This is a massive tightening in the face of commodity, stock, and housing contraction. This is a massive tightening in the face of slowing jobs growth and major corporate layoff announcements. But it is more important to Fed Chairman Powell that he clean up the Fed’s balance sheet, and raise rates so he can lower them as a tool to stimulate the economy during the next Recession, than to face the fact the seeds of the next Great Recession are right before his eyes. If he raises rates this week, it will be dereliction of duties. He will go down as a key causal factor for the Great Recession / Depression of 2019 to 2024. This Fed action happened back in 1930 and led to the Great Depression.

 

Precious Metals and Mining stocks fell Friday. They remain on a Buy signal this weekend.

Our Blue Chip key trend-finder indicators moved to a Sell signal December 4th, 2018 and remain there Friday, December 14th. The Purchasing Power Indicator component triggered a Sell signal Tuesday, December 4th. The 14-day Stochastic Indicator generated a Sell on December 4th, and the 30 Day Stochastic Indicator generated a Sell on December 4th, 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, December 14th, falling 7 points (out of a possible 9 points), to negative -25. It will need to rise above positive + 5 for a new Buy signal.

Demand Power fell 8 to 385 Friday while Supply Pressure rose 11 to 442, telling us Friday’s move in Blue Chips was mild. This DP/SP Indicator moved to an Enter Short Signal December 6th, and remains there Friday, December 14th, 2018. 

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 Buy signal Friday, December 7th, as the HUI 30 Day Stochastic triggered a Buy signal December 7th, and our HUI Purchasing Power Indicator generated a Buy on November 16th. 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 Wednesday, December 12th. On Friday, December 14th, Demand Power rose 6 to 417 while Supply Pressure fell 4 to 397, telling us Friday’s HUI rise was moderate.

DJIA PPI Fell 12 to negative -11.68, on a Sell

DJIA 30 Day Stochastic Fast 10.00 Slow 24.00 On a Sell

DJIA 14 Day Stochastic Fast 3.33 Slow 15.56 On a Sell

DJIA % Above 30 Day Average 10.00

DJIA % Above 10 Day Average 3.33

DJIA % Above 5 Day Average 10.00

Secondary Trend Indicator Fell 7 to Negative -25, On a Sell

Demand Power Fell 8 to 385, Supply Pressure Up 11 to 442 Sell

McClellan Oscillator Fell to Negative – 123.25

McClellan Osc Summation Index – 509.7

Plunge Protection Team Indicator + 8.9, on an “OFF”  

DJIA 10 Day Advance/Decline Indicator – 509.7 on a Sell

NYSE New Highs 16 New Lows 616

Today’s Technology NDX Market Comments:

The NDX Short-term key Trend-finder Indicators generated a Sell signal Friday, December 14th, 2018, and remain there December 14th, 2018. The NDX Purchasing Power Indicator generated a Sell on December 14th, the NDX 14 Day Stochastic triggered aSell signal on December 4th, 2018 and the 30 Day Stochastic triggered a Sell signal on December 4th. 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 Sell positions signal Friday, December 14th and remains there December 14th. On Friday December 14th, Demand Power fell 8 to 435, while Supply Pressure rose 13 to 452, telling us the decline was powerful with deep pockets intervention supporting prices.

 

The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal December 14th, 2018, and needs to rise above positive + 5.0 for a new Buy. It fell to – 8.6 on Friday, December 14th.

 

NDX PPI Fell 14 to 125.21 On a Sell

NDX 30 Day Stochastic Fast 11.90 Slow 26.43 On a Sell

NDX 14 Day Stochastic Fast 8.33 Slow 21.67 On a Sell

NDX 10 Day Advance/Decline Line Indicator – 8.6 On a Sell

NDX Demand Power Fell 8 to 435, Supply Pressure Up 13 to 452 Sell

 

RUT PPI Fell 5 to 114.00 on a Sell

RUT 10 Day Advance/Decline Line Indicator – 418.0 On a Sell

 

Today’s Mining Stocks and Precious Metals Market Comments:

Our HUI key trend-finder indicators moved to a Buy signal December 7th, 2018.

HUI PPI Fell 2 to + 169.29, on a Buy

HUI 30 Day Stochastic Fast 60.00, Slow 60.00 on a Buy

HUI Demand Power Fell 4 to 413; Supply Pressure Up 8 to 405, Buy