Today’s Market Comments:

 

Stocks rose sharply Thursday, July 5th, on mild holiday-week volume. The rally moved our Blue Chip and Russell 2000 Purchasing Power Indicators to Buy signals. The Purchasing Power Indicator Buy signals come as Symmetrical Sideways continuation small triangle patterns may have completed Thursday. This sets up a dichotomy. The sideways triangles (shown in charts on pages 26 and 28) are pauses in a declining trend from the June highs. Typically, the direction prices entered the triangle will be the direction they leave, which in present case would be down. So either the PPI is going to be wrong or the pattern will fail. Sometimes we see our PPI whipsaw during triangle patterns. So, with the employment report for June coming out tomorrow, it will be interesting which technical analysis indicator wins out. Because wave e-down requires a three subwave move, and the second move from the June highs is a triangle (normally seen only in wave b’s or 4’s, and not wave 2’s), we lean toward expecting the triangle to be subwave {b} up of e-down, with {c} down ofe-down next to complete large degree wave ivtriangle patterns from January 2018.

 

Mining stocks and precious metals are looking better, are ready to rally from deep oversold levels, with negative sentiment a good contrary indicator supporting a coming strong rally. The HUI PPI did not generate a confirming Buy signal Thursday, but is close to doing that. Maybe tomorrow.     

 

Our Blue Chip key trend-finder indicators moved to a Sideways signal July 2nd, 2018 and remain there Thursday, July 5th. The Purchasing Power Indicator component triggered a Buy signal Thursday, July 5th. The 14-day Stochastic Indicator generated a Buy on June 14th, and the 30 Day Stochastic Indicator generated a Sell on June 15th, 2018. When these three indicators are in agreement, 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 Thursday, July 5th, rising 7 points (out of a possible 9 points), to positive + 13, needing to fall below the negative – 5 threshold for the new Sell.

Demand Power rose 6 to 384 Thursday while Supply Pressure fell 6 to 384, telling us Thursday’s rise in Blue Chips was moderate. This DP/SP Indicator moved to an Exit Short Signal Thursday, July 5th, and remains there Thursday, July 5th, 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, Silve r and Mining stocks rose Thursday, July 5th. They moved to a Sideways signal Tuesday, July 3rd, as the HUI 30 Day Stochastic triggered a Buy signal July 3rd, 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 Thursday, July 5th, Demand Power rose 3 to 390 while Supply Pressure fell 3 to 398, telling us Thursday’s HUI rise was mild.

DJIA PPI Rose 4 to + 57.75, on a Buy

DJIA 30 Day Stochastic Fast 40.00 Slow 32.00 On a Sell

DJIA 14 Day Stochastic Fast 36.67 Slow 26.11 On a Buy

DJIA % Above 30 Day Average 40.00

DJIA % Above 10 Day Average 66.67

DJIA % Above 5 Day Average 76.67

Secondary Trend Indicator Rose 7 to Positive + 13, On a Buy

Demand Power Rose 6 to 384, Supply Pressure Fell 6 to 384 Neutral

McClellan Oscillator Rose to positive + 54.14

McClellan Osc Summation Index + 2605.95

Plunge Protection Team Indicator – 0.32, on an “OFF”  

DJIA 10 Day Advance/Decline Indicator + 119.8 on a Sell

NYSE New Highs 78 New Lows 37

Today’s Technology NDX Market Comments:

The NDX Short-term key Trend-finder Indicatorsgenerated a Sideways signal Monday, July 2nd, 2018, and remain there July 5th, 2018. The NDX Purchasing Power Indicator generated a Buy on July 2nd, the NDX 14 Day Stochastic triggered aBuy signal on July 2nd, 2018 and the 30 Day Stochastic triggered a Sell signal on April 24th. 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 Monday, June 25th and remains there July 5th. On Thursday July 5th, Demand Power rose 5 to 412, while Supply Pressure fell 6 to 418, telling us Thursday’s rise was moderate to strong.

 

The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal June 25th, 2018, and needs to fall below negative – 5.0 for a new Sell. It rose to negative -8.6 on Thursday, July 5th. 

NDX PPI Rose 4 to + 238.57 On a Buy

NDX 30 Day Stochastic Fast 45.00 Slow 35.40 On a Sell

NDX 14 Day Stochastic Fast 41.00 Slow 25.20 On a Buy

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

NDX Demand Power Up 5 to 412, Supply Pressure Fell 6 to 418 Sell

 

RUT PPI Rose 4 + 194.40 on a Buy

RUT 10 Day Advance/Decline Line Indicator – 42.30 On a Buy

 

Today’s Mining Stocks and Precious Metals Market Comments:

 

Our HUI key trend-finder indicators moved to a Sideways signal July 3rd, 2018.

HUI PPI Rose 1 to 182.64, on a Sell

HUI 30 Day Stochastic Fast 70.00, Slow 33.33 on a Buy

HUI Demand Power Up 3 to 390; Supply Pressure Fell 3 to 398, Sell