Today’s Market Comments:
Stocks fell hard Tuesday, May 29th, especially Blue Chips and Trannies. Techs fell modestly and small caps mildly. The decline was strong enough to trigger a new Sell signal in our Blue Chip key trend-finder indicators, including our Purchasing Power Indicator. The new Sell signal suggests stocks are now inside the final wave e-down of their triangle patterns from January 2018. Major Global averages fell hard Tuesday, as the charts in our International Market reports have been warning is coming.
We updated charts for the Industrials, S&P 500, NASDAQ 100 and Russell 2000 in charts on pages 25 through 28 in tonight’s report. The Russell 2000 looks to have already completed its triangle from January 2018, and has likely broken out higher in wave v-up. It looks like subwave 1-up of v-up has finished and small caps are now in corrective wave 2-down. This is an interesting divergence from Blue Chips and Techs, as investors move money from the major averages to small caps, which are less dependent upon a strong European economy. There was fear Tuesday that Italy may leave the EU, and that put pressure on the Euro. The Dollar benefitted. U.S. Bonds rose sharply in a flight to safety, as our weekend chart showed was coming. As this trend continues, we will be witnessing a flattening of the yield curve. If it inverts, that would be an early sign of a coming economic recession.
Our Blue Chip key trend-finder indicators moved to a Sell signal May 29th, 2018 and remain there Tuesday, May 29th. The Purchasing Power Indicator component triggered a Sell signal Tuesday, May 29th. The 14-day Stochastic Indicator generated a Sell on May 18th, and the 30 Day Stochastic Indicator generated a Sell on May 29th, 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 Wednesday, August 30th, and remains there Tuesday, May 29th, dropping 9 points (out of a possible 9 points), to positive + 0, needing to drop below negative -5 threshold for a new Sell.
Demand Power fell 6 to 384 Tuesday while Supply Pressure rose 7 to 381, telling us Tuesday’s decline in Blue Chips was strong. This DP/SP Indicator moved to an Enter Long Signal Wednesday, May 2nd, and remains there Tuesday, May 29th, 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 Miners fell slightly Tuesday, May 29th, and are finishing their Bullish triangles. They moved to a Buy signal Thursday, May 24th, as the HUI 30 Day Stochastic triggered a Buy signal May 24th, and our HUI Purchasing Power Indicator generated a Buy on March 26th. 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 aShort signal. On Tuesday, May 29th, Demand Power fell 3 to 386 while Supply Pressure rose 3 to 399, telling us Tuesday’s HUI decline was moderate.
DJIA PPI Fell 6 to + 49.43, on a Sell
DJIA 30 Day Stochastic Fast 40.00 Slow 59.33 On a Sell
DJIA 14 Day Stochastic Fast 33.33 Slow 62.22 On a Sell
DJIA % Above 30 Day Average 40.00
DJIA % Above 10 Day Average 16.67
DJIA % Above 5 Day Average 6.67
Secondary Trend Indicator Fell 9 to Positive + 0, On a Buy
Demand Power Fell 6 to 394, Supply Pressure Rose 7 to 381 Buy
McClellan Oscillator fell to negative -29.45
McClellan Osc Summation Index + 2448.84
Plunge Protection Team Indicator – 12.41, on an “OFF”
DJIA 10 Day Advance/Decline Indicator + 39.3 on a Buy
NYSE New Highs 50 New Lows 87
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated aSideways signal Thursday, April 26th, 2018, and remain there May 29th, 2018. The NDX Purchasing Power Indicator generated a Buyon May 23rd, the NDX 14 Day Stochastic triggered a Sell signal on May 29th, 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 anEnter Long positions signal Monday, May 7th and remains there May 29th. On Tuesday May 29th, Demand Power fell 6 to 412, while Supply Pressure rose 3 to 404, telling us Tuesday’s decline was moderate.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal May 7th, 2018, and needs to fall below negative – 5.0 for a new Sell. It fell to negative -3.6 on Tuesday, May 29th.
NDX PPI Fell 4 to + 224.45 On a Buy
NDX 30 Day Stochastic Fast 48.00 Slow 54.60 On a Sell
NDX 14 Day Stochastic Fast 38.00 Slow 50.40 On a Sell
NDX 10 Day Advance/Decline Line Indicator -3.6 On a Buy
NDX Demand Power Fell 6 to 412, Supply Pressure Up 3 to 404 Buy
RUT PPI Fell 1 to +185.53 on a Buy
RUT 10 Day Advance/Decline Line Indicator + 230.2 On a Buy
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Buy signal May 24th, 2018.
HUI PPI Fell 1 to 183.96, on a Buy
HUI 30 Day Stochastic Fast 40.00, Slow 41.67 on a Buy
HUI Demand Power Fell 3 to 386; Supply Pressure Up 3 to 399, Sell