Today’s Market Comments:

Stocks exploded higher Friday, January 4th,  2018. The rally had very strong internals, upside volume, advancing issues, and points all above 90 percent. A significant source of buying came from shorts covering. The rise was strong enough to generate new Buy signals in our short-term key trend-finder indicators for Blue Chips and Techs, as well as our Blue Chip 10 day average Advance/Decline Line Indicator. The net gain for the Industrials this past Holiday week was 1.61 percent, after the significant volatility both down and up.

 

The Bureau of Labor Statistics reported that 312,000 non-farm payroll jobs were created by the U.S. economy in December. If this number is correct, it gives the Fed ammunition to continue to tighten money and raise short-term interest rates in 2019.

 

The rally was likely part of subwave c-up of {ii} up. There is an alternate Elliott Wave mapping shown on page 35 that considers the current rally wave {4} up. In either case, once this rally phase completes, more downside is likely. If wave {ii} up is underway, then the next decline could be significant. But at this point, we have to pay attention to our Purchasing Power Indicator for short-term guidance. It will return to a Sell once the next downleg begins. We show updated charts on pages 33 through 46 for stocks, metals, currencies, oil and Bonds.   

 

Precious Metals and Mining stocks fell Friday, moving inversely to stocks at this time. A powerful rising trend is expected in 2019 for precious metals and Mining stocks, large degree wave 3-up. 

 

Our Blue Chip key trend-finder indicators moved to a Buy signal January 4th, 2019 and remain there Friday, January 4th, 2019. The Purchasing Power Indicator component triggered a Buy signal Friday, January 4th. The 14-day Stochastic Indicator generated a Buy on January 4th, and the 30 Day Stochastic Indicator generated a Buy on January 4th, 2019. 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, January 4th, rising 8 points (out of a possible 9 points), to negative -15. It will need to rise above positive + 5 for a new Buy signal.

Demand Power rose 23 to 421 Friday while Supply Pressure fell 14 to 448, telling us Friday’s rise in Blue Chips was powerful with substantial short covering boosting prices. This DP/SP Indicator moved to an Enter Short Signal December 6th, and remains there Friday, January 4th, 2019. 

The Plunge Protection Team Indicator moved to an “OFF” signal on January 2nd, 2019, which means the PPT is not as likely to support the markets while this indicator remains on an “OFF.” This means there is n 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. Maybe a massive short-covering rally is induced by the PPT that causes a violent rally just when market participants are expecting more selling.

Gold, Silver and Miners fell Friday. The HUI generated a key trend-finder indicator Sideways (Neutral) signal Wednesday, January 2nd, as the HUI 30 Day Stochastic triggered a Buy signal January 2nd, 2019, and our HUI Purchasing Power Indicator generated a Sell on December 19th. 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, January 4th, Demand Power fell 1 to 425 while Supply Pressure fell 1 to 417, telling us Friday’s HUI decline was weak.

DJIA PPI rose 23 to negative -26.39, on a Buy

DJIA 30 Day Stochastic Fast 30.00 Slow 12.67 On a Buy

DJIA 14 Day Stochastic Fast 83.33 Slow 41.67 On a Buy

DJIA % Above 30 Day Average 30.00

DJIA % Above 10 Day Average 93.33

DJIA % Above 5 Day Average 93.33

Secondary Trend Indicator Rose 8 to Negative -15, On a Sell

Demand Power Rose 23 to 421, Supply Pressure Fell 14 to 448 Sell

McClellan Oscillator Rose to Positive + 220.01

McClellan Osc Summation Index – 1767.79

Plunge Protection Team Indicator + 9.48, an “OFF” signal

DJIA 10 Day Advance/Decline Indicator + 254.9 on a Buy

NYSE New Highs 6 New Lows 11

Today’s Technology NDX Market Comments:

The NDX Short-term key Trend-finder Indicators generated a Buy signal Friday, January 4th, 2019, and remain there January 4th, 2019. The NDX Purchasing Power Indicator generated a Buy on January 4th, the NDX 14 Day Stochastic triggered a Buy signal on December 27th, 2018 and the 30 Day Stochastic triggered a Buysignal of January 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 anEnter Sell positions signal Friday, December 14th and remains there January 4th. On Friday January 4th, Demand Power rose 21 to 447, while Supply Pressure fell 10 to 454, telling us the rally was powerful with over half the buying coming from shorts covering.

 

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 rose to + 2.2 on Friday, January 4th.

 

NDX PPI Rose 28 to 91.61, On a Buy

NDX 30 Day Stochastic Fast 28.05 Slow 13.66 On a Buy

NDX 14 Day Stochastic Fast 82.14 Slow 41.90 On a Buy

NDX 10 Day Advance/Decline Line Indicator + 2.2, On a Sell

NDX Demand Power Up 21 to 447, Supply Pressure Fell 10 to 454 Sell

 

RUT PPI Rose 14 to 104.50, on a Buy

RUT 10 Day Advance/Decline Line Indicator + 123.7 On a Sell

 

Today’s Mining Stocks and Precious Metals Market Comments:

Our HUI key trend-finder indicators moved to a Sideways (Neutral) signal January 2nd, 2019.

HUI PPI Flat at + 170.33, on a Sell

HUI 30 Day Stochastic Fast 90.00, Slow 76.11 on a Buy

HUI Demand Power Fell 1 to 425; Supply Pressure Fell 1 to 417, Buy