Today’s Market Comments:

Stocks plunged again Thursday, December 27th, then orchestrated an historic reversal, ending in moderate positive territory at the close. The Industrials were down over 600 points at their low, then ended up 260 points. This came after a plunge Monday, December 24th, the worst Christmas Eve drop ever, and on the heels of December 26’s largest daily price gain ever. How is that for volatility! The Plunge Protection Team is very active at this time, as our PPT indicator predicted they would be when it moved from “Off” to “On” December 21st. It remains “On” tonight. This type of volatility is normal during major Bear markets, and is typically coincident with crashes underway and coming. In 1987, leading up to that crash, we saw a couple of weeks of 3 to 4 percent daily moves, both up and down. If our wave mapping is correct, more crash is coming in 2019.

 

On page 25, we show a close-up short-term chart. The moves this week give a pretty clear Elliott Wave mapping. Noted is that the Industrials are inside an a-up, b-down, c-up corrective rally. The mega rally December 26th was wave a-up, and the three-wave decline December 27th, was all of wave b-down. The 850 point end of day mega reversal rally December 27th was part of, or all of subwave c-up of {ii} up. Once wave {ii} up completes, a powerful decline, wave {iii} down will follow.

 

We have a Phi mate turn date that was ideally scheduled for December 27th, which may have occurred a day early, at December 26th’s opening intraday low.

Our key trend-finder indicators remain on a Sideways signal December 27th. The NDX and Dow Industrials’ 14 day stochastics joined the Purchasing Power Indicators on a Buy, however the 30 day stochastics remain on Sells.

Precious metals rose again Thursday, as did Mining stocks. Their key trend-finder indicators remain on Sell signals tonight. We updated charts for them in tonight’s report.

Our Blue Chip key trend-finder indicators moved to a Sideways signal December 26th, 2018 and remain there Thursday, December 27th. The Purchasing Power Indicator component triggered a Buy signal Wednesday, December 26th. The 14-day Stochastic Indicator generated a Buy on December 27th, 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 Thursday, December 27th, rising 5 points (out of a possible 9 points), to negative -37. It will need to rise above positive + 5 for a new Buy signal.

Demand Power rose 5 to 384 Thursday while Supply Pressure fell 9 to 477, telling us Thursday’s rise in Blue Chips was strong, with deep pockets intervention supporting prices, and kicking off the late day rally. This DP/SP Indicator moved to an Enter Short Signal December 6th, and remains there Thursday, December 27th, 2018. 

The Plunge Protection Team Indicator moved to an “ON” signal on December 21st, which means the PPT is likely to support the markets while this indicator remains on an “ON.” This means there is 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 rose Thursday. The HUI generated a Sell signal Wednesday, December 19th, as the HUI 30 Day Stochastic triggered a Sell signal December 19th, 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 Thursday, December 27th, Demand Power rose 1 to 431 while Supply Pressure fell 2 to 416, telling us Thursday’s HUI rise was mild.

DJIA PPI rose 3 to negative -43.31, on a Buy

DJIA 30 Day Stochastic Fast 6.67 Slow 1.33 On a Sell

DJIA 14 Day Stochastic Fast 20.00 Slow 4.44 On a Buy

DJIA % Above 30 Day Average 6.67

DJIA % Above 10 Day Average 43.33

DJIA % Above 5 Day Average 96.67

Secondary Trend Indicator Rose 5 to Negative -37, On a Sell

Demand Power Up 5 to 384, Supply Pressure Fell 9 to 477 Sell

McClellan Oscillator Rose to Negative – 103.59

McClellan Osc Summation Index – 2234.37

Plunge Protection Team Indicator + 18.95, an “ON” signal

DJIA 10 Day Advance/Decline Indicator – 909.1 on a Sell

NYSE New Highs 6 New Lows 219

Today’s Technology NDX Market Comments:

The NDX Short-term key Trend-finder Indicators generated aSideways signal Wednesday, December 26th, 2018, and remain there December 27th, 2018. The NDX Purchasing Power Indicator generated a Buy on December 26th, the NDX 14 Day Stochastic triggered a Buy signal on December 27th, 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 anEnter Sell positions signal Friday, December 14th and remains there December 27th. On Thursday December 27th, Demand Power rose 1 to 431, while Supply Pressure fell 7 to 477, telling us the rise was moderate with deep pockets intervention igniting buying and short-covering adding to Demand to trigger the reversal Thursday.

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 – 38.6 on Thursday, December 27th. 

NDX PPI Rose 2 to 81.11, On a Buy

NDX 30 Day Stochastic Fast 7.32 Slow 3.61 On a Sell

NDX 14 Day Stochastic Fast 16.67 Slow 5.71 On a Buy

NDX 10 Day Advance/Decline Line Indicator – 38.6, On a Sell

NDX Demand Power Up 1 to 431, Supply Pressure Fell 7 to 477 Sell

 

RUT PPI Flat at 91.49, on a Buy

RUT 10 Day Advance/Decline Line Indicator – 668.7 On a Sell

 

Today’s Mining Stocks and Precious Metals Market Comments:

Our HUI key trend-finder indicators moved to a Sell signal December 19th, 2018.

HUI PPI Flat at + 170.64, on a Sell

HUI 30 Day Stochastic Fast 70.00, Slow 68.33 on a Sell

HUI Demand Power Up 1 to 431; Supply Pressure Fell 2 to 416, Buy