Today’s Market Comments:
Stocks were mixed Wednesday, August 1st. The Industrials and Trannies fell, the S&P and Russell 2000 were flat, and Techs rose. There were no changes to our key indicators. The Purchasing Power Indicator for Blue Chips, Techs, and Small Caps remain on a Sell. Our Blue Chip combination key trend-finder indicator remains on a Sideways signal. The 50 day moving average has become strong support for Techs (see chart on page 28). In the charts on page 25 we show two very short-term scenarios for the S&P 500. One suggests the next leg up for wave v-up has started, the other suggests that a corrective decline after the recent June rally needs more downside to complete before wave v-up resumes. Wave v-up is the fifth and final wave for a Bull market from 2015, a rally that has tracked nicely inside a well-defined rising trend-channel we showed in our last weekend report.
The Fed announced they are leaving short-term interest rates flat for the moment. Long Bonds fell three quarters of a point on the decision.
Our Blue Chip key trend-finder indicators moved to a Sideways signal July 30th, 2018 and remain there Wednesday, August 1st. 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 Wednesday, August 1st, falling 6 (out of a possible 9 points), positive + 15, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power fell 4 to 390 Wednesday while Supply Pressure rose 4 to 383, telling us Wednesday’s decline in Blue Chips was moderate. This DP/SP Indicator moved to an Enter Long Signal Friday, July 6th, and remains there Wednesday, August 1st, 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 fell Wednesday, August 1st. 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 Wednesday, August 1st, Demand Power fell 4 to 383 while Supply Pressure rose 5 to 413, telling us Wednesday’s HUI decline was moderate.
DJIA PPI Flat at + 72.31, on a Sell
DJIA 30 Day Stochastic Fast 53.33 Slow 58.00 On a Buy
DJIA 14 Day Stochastic Fast 60.00 Slow 74.44 On a Sell
DJIA % Above 30 Day Average 56.67
DJIA % Above 10 Day Average 30.00
DJIA % Above 5 Day Average 30.00
Secondary Trend Indicator Fell 6 to Positive + 15, On a Buy
Demand Power Fell 4 to 390, Supply Pressure Up 4 to 383 Buy
McClellan Oscillator Rose to negative – 103.70
McClellan Osc Summation Index + 2425.75
Plunge Protection Team Indicator + 0.59, on an “OFF”
DJIA 10 Day Advance/Decline Indicator + 1.7 on a Buy
NYSE New Highs 74 New Lows 56
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicatorsgenerated a Sideways signal Tuesday, July 24th, 2018, and remain there August 1st, 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 August 1st. On Wednesday August 1st, Demand Power fell 1 to 420, while Supply Pressure rose 1 to 421, telling us Wednesday’s rise was mild.
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 -9.4 on Wednesday, August 1st.
NDX PPI Rose 2 to + 257.98 On a Sell
NDX 30 Day Stochastic Fast 57.14 Slow 61.90 On a Buy
NDX 14 Day Stochastic Fast 41.67 Slow 50.00 On a Sell
NDX 10 Day Advance/Decline Line Indicator -9.4 On a Sell
NDX Demand Power Fell 1 to 420, Supply Pressure Up 1 to 421 Buy
RUT PPI Flat at + 187.46 on a Sell
RUT 10 Day Advance/Decline Line Indicator – 109.2 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 172.89, on a Sell
HUI 30 Day Stochastic Fast 25.00, Slow 21.67 on a Sell
HUI Demand Power Fell 4 to 383; Supply Pressure Up 5 to 413, Sell