Today’s Market Comments:

Stocks rose sharply Tuesday, October 16th, and have retraced a small portion of the recent plunge. The rally since last Thursday looks like a wave zigzag formation. It may have further to go, possibly taking stocks up toward their 50 day moving averages. Most of Tuesday’s rally came from shorts covering. The PPT Indicator has been on a Buy signal since last Thursday. All of our Purchasing Power Indicators are now on Buy signals. The Blue Chip key trend-finder indicators remain on a Neutral signal tonight. The NASDAQ 100 key trend-finder indicator moved to a Buy signal for techs.

 

Precious metals were flat Tuesday, which was impressive given the strong rally in stocks. Money did not flow from metals to stocks. Money did flow from stocks to metals during the recent plunge.        

 

New NYSE Lows have run above 79 for 31 consecutive trading days, which is an astonishing and dangerous condition. 

Our Blue Chip key trend-finder indicators moved to a Sideways signal October 5th, 2018 and remain there Tuesday, October 16th. The Purchasing Power Indicator component triggered a Buy signal Friday, October 12th. 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 Tuesday, October 16th, rising 8 points (out of a possible 9 points), to positive + 1. It will need to rise above positive + 5 for a new Buy signal.

Demand Power rose 17 to 381 Tuesday while Supply Pressure fell 9 to 422, telling us Tuesday’s rise in Blue Chips was powerful, but was substantially boosted by shorts covering, by those most pessimistic about the market forced to buy. This DP/SP Indicator moved to an Enter Short Signal October 4th, and remains there Tuesday, October 16th, 2018.

The Plunge Protection Team Indicator moved to an “ON” signal on October 11th, 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.

Gold, Silver and Miners were flat Tu esday. They generated a Buy signal Thursday, 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 Tuesday, October 16th, Demand Power fell 2 to 415 while Supply Pressure rose 2 to 406, telling us Tuesday’s HUI move was mild.

DJIA PPI rose 15 to 48.01, on a Buy

DJIA 30 Day Stochastic Fast 23.33 Slow 14.00 On a Sell

DJIA 14 Day Stochastic Fast 16.67 Slow 14.44 On a Sell

DJIA % Above 30 Day Average 23.33

DJIA % Above 10 Day Average 26.67

DJIA % Above 5 Day Average 83.33

Secondary Trend Indicator Rose 8 to Positive +1, On a Sell

Demand Power rose 17 to 381, Supply Pressure fell 9 to 422 Sell

McClellan Oscillator Rose to Negative – 22.18

McClellan Osc Summation Index -305.6

Plunge Protection Team Indicator + 32.94, on an “ON”  

DJIA 10 Day Advance/Decline Indicator – 399.6 on a Sell

NYSE New Highs 14 New Lows 95

Today’s Technology NDX Market Comments:

The NDX Short-term key Trend-finder Indicators generated a Buy signal Tuesday, October 16th, 2018, and remain there October 16th, 2018. The NDX Purchasing Power Indicator generated a Buyon October 16th, the NDX 14 Day Stochastic triggered a Buysignal on October 16th, 2018 and the 30 Day Stochastic triggered a Buy signal on October 16th. 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 16th. On Tuesday October 16th, Demand Power rose 17 to 419, while Supply Pressure fell 9 to 453, telling us the rally was powerful, and due to substantial short-covering.

 

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 rose to negative -18.4 on Tuesday, October 16th.

NDX PPI Rose 23 to 218.02 On a Buy

NDX 30 Day Stochastic Fast 21.43 Slow 8.81 On a Buy

NDX 14 Day Stochastic Fast 27.38 Slow 9.52 On a Buy

NDX 10 Day Advance/Decline Line Indicator -18.4 On a Sell

NDX Demand Power Up 17 to 419, Supply Pressure Fell 9 to 453 Sell

RUT PPI Up 12 to 163.09 on a Buy

RUT 10 Day Advance/Decline Line Indicator – 188.8 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 Flat at + 168.92, on a Buy

HUI 30 Day Stochastic Fast 85.00, Slow 60.00 on a Buy

HUI Demand Power Fell 2 to 415; Supply Pressure Up 2 to 406, Buy