Today’s Market Comments:
Note to our Platinum members: We took our fifth profitable trade this week on Thursday, October 11th. Details are available at our Current Trade button.
Stocks Plunged across the board again Thursday, October 11th. They topped on our recent Phi mate turn date October 3rd, and have declined sharply since, the Industrials down almost 2,000 points. This plunge is a small degree wave 3 down move, or part of 3-down. The Bull market from 2015 looks complete, as its wave v-up move looks complete. That wave formed Rising Bearish Wedge patterns to identify the end, as they are termination top patterns. These patterns give downside price targets, which will be the initial downside price targets for the new Bear market. Those downside price targets are 24,000 in the Industrials, 2,600 in the S&P 500 and 6,400 in the NASDAQ 100.
There will be short-term rallies as this Bear market continues, and some of those rallies could be explosive. Our Plunge Protection Team Indicator moved to an “On” signal which means the odds are high that the PPT is buying the market hard and could force a short-covering countertrend rally at any time. Several indicators are showing the stock market is approaching a short-term oversold level. While more downside is possible over the short-run, we must be watchful for a short-covering corrective rally.
Our HUI key trend-finder indicators generated a new Buy signal Thursday, October 11th, as Mining stocks rose sharply. Gold and Silver also rose sharply. These markets could have completed wave 2-down and are now starting wave 3-up. If so, this could be a dramatic Bull market starting. The HUI Demand Power / Supply Pressure Indicator also triggered a new Buy signal Thursday.
Our intermediate degree Secondary Trend Indicator generated a new Sell signal Wednesday, October 10th. It had triggered a Buy signal on our Phi mate turn date back on July 3rd, 2018, which led to a 212 point rise in the S&P 500. This indicator tracks multi-month trends, and is resistant to the noise of short-term trends. Not good.
This stock market plunge is coming after a 19 observation Hindenburg Omen potential stock market crash signals was generated in August. The observations were continuous over the weeks since, and warned that this stock market is in a fragile condition. New NYSE Lows have run above 79 for 28 consecutive trading days, which is a dangerous condition.
Our Blue Chip key trend-finder indicators moved to a Sell signal October 5th, 2018 and remain there Thursday, October 11th. The Purchasing Power Indicator component triggered a Sell signal Thursday, October 4th. The 14-day Stochastic Indicator generated a Sell on October 5th, and the 30 Day Stochastic Indicator generated a Sell on September 25th, 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, October 11th, dropping 6 points (out of a possible 9 points), to negative – 16. It will need to rise above positive + 5 for a new Buy signal.
Demand Power fell 6 to 352 Wednesday while Supply Pressure rose 16 to 438, telling us Thursday’s decline in Blue Chips was powerful with deep pockets intervention, the Plunge Protection Team, buying the market as bids were scarce and they wanted to prevent an all-out collapse in prices. This DP/SP Indicator moved to an Enter Short Signal October 4th, and remains there Thursday, October 11th, 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, Silver and Miners exploded hig her Thursday. They generated a Buy signal Thurday, October 11th, as the HUI 30 Day Stochastic triggered a Buy signal October 11th, and our HUI Purchasing Power Indicator generated a Buy on September 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 Thursday, October 11th. On Thursday, October 11th, Demand Power rose 18 to 416 while Supply Pressure fell 5 to 402, telling us Thursday’s HUI rise was powerful.
DJIA PPI fell a whopping 19 to 28.10, on a Sell
DJIA 30 Day Stochastic Fast 0.00 Slow 42.67 On a Sell
DJIA 14 Day Stochastic Fast 0.00 Slow 33.89 On a Sell
DJIA % Above 30 Day Average 0.00
DJIA % Above 10 Day Average 0.00
DJIA % Above 5 Day Average 0.00
Secondary Trend Indicator Fell 6 to Negative -16, On a Sell
Demand Power fell 6 to 352, Supply Pressure up 16 to 438 Sell
McClellan Oscillator Fell to Negative – 290.73
McClellan Osc Summation Index + 99.55
Plunge Protection Team Indicator + 24.0, on an “ON”
DJIA 10 Day Advance/Decline Indicator – 794.5 on a Sell
NYSE New Highs 9 New Lows 526
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated a Sell signal Thursday, October 4th, 2018, and remain there October 11th, 2018. The NDX Purchasing Power Indicator generated a Sellon October 4th, the NDX 14 Day Stochastic triggered a Sell signal on October 4th, 2018 and the 30 Day Stochastic triggered a Sellsignal on October 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 Short positions signal Thursday, October 4th and remains there October 11th. On Thursday October 11th, Demand Power fell 2 to 388, while Supply Pressure rose 7 to 466, telling us the decline was strong with deep pockets intervention supporting prices.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal October 4th, 2018, and needs to rise above positive + 5.0 for a new Buy. It fell to negative -34.0 on Thursday, October 11th.
NDX PPI Fell 12 to 175.93 On a Sell
NDX 30 Day Stochastic Fast 2.38 Slow 15.71 On a Sell
NDX 14 Day Stochastic Fast 2.38 Slow 10.24 On a Sell
NDX 10 Day Advance/Decline Line Indicator -34.0 On a Sell
NDX Demand Power Fell 2 to 388, Supply Pressure Up 7 to 466 Sell
RUT PPI Fell 8 to 149.97 on a Sell
RUT 10 Day Advance/Decline Line Indicator – 554.7 On a Sell
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Buy signal October 11th, 2018.
HUI PPI Rose 13 to + 168.05, on a Buy
HUI 30 Day Stochastic Fast 85.00, Slow 45.56 on a Buy
HUI Demand Power Up 18 to 416; Supply Pressure Fell 5 to 402, Sell