Today’s Market Comments:
Stocks rose Monday, August 20th. The Industrials rose to the highest level since February 2018 and came within 10 points of its highest level since its all-time high in January 2018. The Industrials are inside wave v-up. There is a possibility it has formed a small Megaphone top pattern over the past few weeks, which is so, means a short-term top is imminent, possibly ready to correct within wave v-up which could have further to go. The S&P 500 rose Monday, and may be inside the final subwave of a five subwave Rising Bearish Wedge shown in chart on page 26. If so, the upside price target for this pattern is 2925ish. Small caps rose above the upper boundary of a possible Sideways symmetrical triangle, which supports a bullish breakout. A rise above 1,709 would add strong evidence that wave v-up is underway. See chart on page 28. The upside price target for v-up would be 1780ish. There were no changes to our key indicators Monday. The Blue Chip and small cap key indicators remain on a Buy signal.
Gold rose 10 points Monday, and charts and sentiment are telling us a bottom is imminent of has occurred that will lead to a strong rally. The minimum upside price target for Gold is 1360ish, with eventual upside potential toward 1,600ish. Mining stocks should also be close to a major bottom. What we want to see is a new Buy signal in our HUI key trend-finder indicators to confirm a new major Bull market has started. Not there yet.
Our Blue Chip key trend-finder indicators moved to a Buy signal August 17th, 2018 and remain there Monday, August 20th. The Purchasing Power Indicator component triggered a Buy signal Friday, August 17th. The 14-day Stochastic Indicator generated a Buy on August 17th, and the 30 Day Stochastic Indicator generated a Buy on July 9th, 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 Buy signal Tuesday, July 3rd, and remains there Monday, August 20th, rising 3 points (out of a possible 9 points), positive + 25, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power rose 3 to 389 Monday while Supply Pressure fell 4 to 371, telling us Monday’s rise in Blue Chips was moderate. This DP/SP Indicator moved to an Enter Long Signal Friday, August 17th, and remains there Monday, August 20th, 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 rose, and Silver and Miners wer e Flat Monday. They generated a Sell signal Friday, July 13th, as the HUI 30 Day Stochastic triggered a Sell signal July 13th, and our HUI Purchasing Power Indicator generated a Sell on June 15th. 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 29th, the HUI Demand Power / Supply Pressure Indicator moved to a Short signal. On Monday, August 20th, Demand Power rose 2 to 373 while Supply Pressure fell 2 to 439, telling us Monday’s HUI rise was mild.
DJIA PPI Rose 1 to + 79.94, on a Buy
DJIA 30 Day Stochastic Fast 80.00 Slow 72.00 On a Buy
DJIA 14 Day Stochastic Fast 80.00 Slow 56.67 On a Buy
DJIA % Above 30 Day Average 80.00
DJIA % Above 10 Day Average 80.00
DJIA % Above 5 Day Average 86.67
Secondary Trend Indicator Rose 3 to Positive + 25, On a Buy
Demand Power Rose 3 to 389, Supply Pressure Fell 4 to 371 Buy
McClellan Oscillator Rose to Positive + 90.51
McClellan Osc Summation Index + 2065.44
Plunge Protection Team Indicator + 8.28, on an “OFF”
DJIA 10 Day Advance/Decline Indicator + 216.5 on a Buy
NYSE New Highs 147 New Lows 27
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicatorsgenerated a Neutral signal Friday, August 10th, 2018, and remain there August 20th, 2018. The NDX Purchasing Power Indicator generated a Sell on August 15th, the NDX 14 Day Stochastic triggered a Sell signal on August 10th, 2018 and the 30 Day Stochastic triggered a Buy signal on July 6th. 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 Short positions signal Wednesday, August 15th and remains there August 20th. On Monday August 20th, Demand Power was flat at 410, while Supply Pressure fell 3 to 416, telling us Monday’s move was weak.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal August 6th, 2018, and needs to fall below negative – 5.0 for a new Sell. It was flat at negative -0.4 on Monday, August 20th.
NDX PPI Flat at + 261.25 On a Sell
NDX 30 Day Stochastic Fast 50.00 Slow 50.71 On a Buy
NDX 14 Day Stochastic Fast 52.38 Slow 46.19 On a Sell
NDX 10 Day Advance/Decline Line Indicator -0.8 On a Buy
NDX Demand Power Flat at 410, Supply Pressure Fell 3 to 416 Sell
RUT PPI Rose 1 to 192.23 on a Buy
RUT 10 Day Advance/Decline Line Indicator + 131.9 On a Buy
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Sell signal July 13th, 2018.
HUI PPI Flat at 155.20, on a Sell
HUI 30 Day Stochastic Fast 0.00, Slow 11.11 on a Sell
HUI Demand Power Up 2 to 373; Supply Pressure Fell 2 to 439, Sell