Today’s Market Comments:
Stocks rose Tuesday, July 31st, on strong end-of-month volume. Breadth was solid. There were no changes to our key indicators. The Blue Chip, Tech, and small cap Purchasing Power Indicators remain on Sell signals. Our three-component Blue Chip and NASDAQ 100 key indicators remain on a Sideways signal. Stocks are likely inside the final large degree wave v-up move for the Bull market trend-channel from 2015. There are two near term scenarios for stocks shown in two charts on page 27. The first possibility is stocks are inside an a-down, b-up, c-down corrective decline for the July rally. This would be the second of five subwaves for large degree v-up. In this case, stocks are inside the middle wave b-up, with c-down to follow. The second scenario considers that this second wave corrective decline is complete and the next wave up for v-up has started.
While the HUI Mining stocks key trend-finder indicator remains on a Sell signal Tuesday, the HUI 30 day Stochastic Fast measure rose to 30 Tuesday, up from 15 last Thursday, which is a positive development just short of a new Buy signal. We are also seeing the start of Bullish divergences between the Index and both its 10 day average Advance/Decline Line Indicator, and its Demand Power measure, which serve as an early indication that the corrective decline from 2016 is approaching a bottom. Once we get a new Buy signal in our HUI Purchasing Power Indicator and our HUI 30 day Stochastic, we will have strong evidence that a new Bull market is starting in Miners and precious metals.
Our Blue Chip key trend-finder indicators moved to a Sideways signal July 30th, 2018 and remain there Tuesday, July 31st. The Purchasing Power Indicator component triggered a Sell signal Monday, July 30th. The 14-day Stochastic Indicator generated a Sell on July 30th, and the 30 Day Stochastic Indicator generated a Buy on July 9th, 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 Tuesday, July 31st, rising 7 (out of a possible 9 points), positive + 21, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power rose 6 to 394 Tuesday while Supply Pressure fell 3 to 379, telling us Tuesday’s rise in Blue Chips was moderate with short-covering contributing to the rise. This DP/SP Indicator moved to an Enter Long Signal Friday, July 6th, and remains there Tuesday, July 31st, 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 Mining stocks rose Tuesday, July 31st. 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 Tuesday, July 31st, Demand Power rose 3 to 387 while Supply Pressure fell 4 to 408, telling us Tuesday’s HUI rise was mild.
DJIA PPI Rose 3 to + 72.89, on a Sell
DJIA 30 Day Stochastic Fast 56.67 Slow 60.00 On a Buy
DJIA 14 Day Stochastic Fast 60.00 Slow 77.22 On a Sell
DJIA % Above 30 Day Average 56.67
DJIA % Above 10 Day Average 60.00
DJIA % Above 5 Day Average 43.33
Secondary Trend Indicator Rose 7 to Positive + 21, On a Buy
Demand Power Rose 6 to 394, Supply Pressure Fell 3 to 379 Buy
McClellan Oscillator Rose to negative – 68.78
McClellan Osc Summation Index + 2529.45
Plunge Protection Team Indicator + 0.36, on an “OFF”
DJIA 10 Day Advance/Decline Indicator -101.3 on a Buy
NYSE New Highs 76 New Lows 36
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicatorsgenerated a Sideways signal Tuesday, July 24th, 2018, and remain there July 31st, 2018. The NDX Purchasing Power Indicator generated a Sell on July 26th, the NDX 14 Day Stochastic triggered a Sell signal on July 24th, 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 Exit Buy positions signal Monday, July 30th and remains there July 31st. On Tuesday July 30th, Demand Power rose 3 to 421, while Supply Pressure fell 4 to 420, telling us Tuesday’s rise was moderate.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal July 27th, 2018, and needs to rise above positive + 5.0 for a new Buy. It fell to negative -9.0 on Tuesday, July 31st.
NDX PPI Rose 4 to + 255.35 On a Sell
NDX 30 Day Stochastic Fast 59.52 Slow 64.52 On a Buy
NDX 14 Day Stochastic Fast 45.24 Slow 55.00 On a Sell
NDX 10 Day Advance/Decline Line Indicator -9.0 On a Sell
NDX Demand Power Up 3 to 421, Supply Pressure Fell 4 to 420 Buy
RUT PPI Rose 5 to + 187.76 on a Sell
RUT 10 Day Advance/Decline Line Indicator – 63.1 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 173.77, on a Sell
HUI 30 Day Stochastic Fast 30.00, Slow 21.11 on a Sell
HUI Demand Power Up 3 to 387; Supply Pressure Fell 4 to 408, Sell