Today’s Market Comments:
Stocks were flat on weak volume Tuesday, August 29th, as the Labor Day weekend approaches. There were no changes to our key trend-finder indicators Tuesday. Our important Purchasing Power Indicators for Blue Chips, Techs and small caps remain on a Buy signal Tuesday. Stocks are inside wave v-up, which is the concluding rising wave for the Bull market from 2015, and likely also for the larger degree Bull market from 2009. Mining stocks and Precious metals may be starting a new Bull market, with an upside acceleration coming once we get new Buy signals in our HUI key trend-finder indicators.
The economy is starting to show some cracks. The Housing market is weakening rapidly. Prices are dropping. The National Association of Realtors recently reported that Existing Home Sales fell for the fourth consecutive month. The Commerce Department just reported that New Home Sales fell for the last two months in a row. Construction fell 1.1 percent in the latest reporting month. But here is the rub: Housing and Construction account for 20 percent of our economy, 20 percent of GDP. The Fed is tightening too hard, too fast, with both its aggressive Quantitative Tightening policy and its open market operations policy to raise short term interest rates aggressively. The tax law redistribution of money from the Middle class to large corporations and low income families has failed to ignite sustainable growth in real wages, real employment, and consumer spending for large ticket items. This economy is headed for a smashup once wave v-up finishes.
Our Blue Chip key trend-finder indicators moved to a Neutral signal August 17th, 2018 and remain there Tuesday, August 28th. The Purchasing Power Indicator component triggered a Buy signal Friday, August 17th. The 14-day Stochastic Indicator generated a Buy on August 17th, and the 30 Day Stochastic Indicator generated a Sell on August 23rd, 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 Buy signal Tuesday, July 3rd, and remains there Tuesday, August 28th, dropping 6 points (out of a possible 9 points), positive + 24, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power fell 3 to 388 Tuesday while Supply Pressure was flat at 361, telling us Tuesday’s move in Blue Chips was weak. This DP/SP Indicator moved to an Enter Long Signal Friday, August 17th, and remains there Tuesday, August 28th, 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 fell slightl y Tuesday. 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 agree, 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, August 28th, Demand Power fell 4 to 385 while Supply Pressure rose 4 to 425, telling us Tuesday’s HUI decline was moderate.
DJIA PPI was Fat at + 87.33, on a Buy
DJIA 30 Day Stochastic Fast 83.33 Slow 77.33 On a Sell
DJIA 14 Day Stochastic Fast 93.33 Slow 76.67 On a Buy
DJIA % Above 30 Day Average 83.33
DJIA % Above 10 Day Average 83.33
DJIA % Above 5 Day Average 80.00
Secondary Trend Indicator Fell 6 to Positive + 24, On a Buy
Demand Power Fell 3 to 388, Supply Pressure Flat at 361 Buy
McClellan Oscillator Rose to Positive + 65.50
McClellan Osc Summation Index + 2548.28
Plunge Protection Team Indicator + 5.30, on an “OFF”
DJIA 10 Day Advance/Decline Indicator + 443.3 on a Buy
NYSE New Highs 114 New Lows 31
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated a Buy signal Wednesday, August 22nd, 2018, and remain there August 28th, 2018. The NDX Purchasing Power Indicator generated a Buyon August 22nd, the NDX 14 Day Stochastic triggered a Buy signal on August 21st, 2018 and the 30 Day Stochastic triggered a Buysignal 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 anEnter Long positions signal Tuesday, August 28th and remains there August 28th. On Tuesday August 28th, Demand Power fell 1 to 417, while Supply Pressure fell 2 to 399, telling us Tuesday’s rise was weak.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal August 6th, 2018, and needs to fall below negative – 5.0 for a new Sell. It fell to positive + 20.2 on Tuesday, August 28th.
NDX PPI Rose 1 to + 278.61 On a Buy
NDX 30 Day Stochastic Fast 66.67 Slow 59.05 On a Buy
NDX 14 Day Stochastic Fast 77.38 Slow 68.10 On a Buy
NDX 10 Day Advance/Decline Line Indicator + 20.2 On a Buy
NDX Demand Power Fell 1 to 417, Supply Pressure Fell 2 to 399 Buy
RUT PPI Flat at 197.83 on a Buy
RUT 10 Day Advance/Decline Line Indicator + 190.2 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 Fell 1 to 156.19, on a Sell, Needs 158.04 for a new Buy.
HUI 30 Day Stochastic Fast 10.00, Slow 4.44 on a Sell
HUI Demand Power Fell 4 to 385; Supply Pressure Up 4 to 425, Sell