Today’s Market Comments:
Stocks broke out sharply Wednesday, July 25th, on rising volume but once again less than stellar breadth. The lack of breadth does not mean the trend cannot continue higher, but it is an early warning sign of a coming significant top to be followed by a lengthy and strong decline. At this point we believe stocks are inside wave v-up, which could be a strong rally, within a larger degree rising trend from 2015. Once v-up tops, the next Bear market in stocks should begin. Narrowing breadth is an attribute of concluding Bull markets.
The Industrials rose above their June highs Wednesday, which supports that they are now inside wave v-up, joining the S&P 500 and NASDAQ 100. The NASDAQ 100 and Composite both hit new closing all-time highs Wednesday. Our Blue Chip key trend-finder indicators remain on a Buy signal, the NDX on a Sideways signal. Small caps are lagging, however there does appear to be a small Ascending Bullish triangle forming since June 2018, which once complete, has an upside price target of 1,775ish.
Gold, Silver and Mining stocks are putting the final touches on a corrective decline within a large degree rising trend. Our key indicators for Metals and Miners remain on a Sell. Once they turn to Buys, we could see a new major Bull market begin in these markets. This Bull market should be underway by the autumn 2018. This should offer an excellent trading and market timing investing opportunity.
Our Blue Chip key trend-finder indicators moved to a Buy signal July 9th, 2018 and remain there Wednesday, July 25th. The Purchasing Power Indicator component triggered a Buy signal Thursday, July 5th. The 14-day Stochastic Indicator generated a Buy on June 14th, 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, July 25th, rising 6 points (out of a possible 9 points), to positive + 24, needing to fall below the negative – 5 threshold for the new Sell.
Demand Power rose 6 to 391 Wednesday while Supply Pressure fell 4 to 373, telling us Wednesday’s rise in Blue Chips was moderate to strong. This DP/SP Indicator moved to an Enter Long Signal Friday, July 6th, and remains there Wednesday, July 25th, 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 Wednesday, July 25th. 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, July 25th, Demand Power rose 2 to 385 while Supply Pressure fell 1 to 404, telling us Wednesday’s HUI rise was mild.
DJIA PPI Rose 6 to + 77.86, on a Buy
DJIA 30 Day Stochastic Fast 63.33 Slow 52.00 On a Buy
DJIA 14 Day Stochastic Fast 96.67 Slow 63.89 On a Buy
DJIA % Above 30 Day Average 63.33
DJIA % Above 10 Day Average 93.33
DJIA % Above 5 Day Average 90.00
Secondary Trend Indicator Rose 6 to Positive + 24, On a Buy
Demand Power Rose 6 to 391, Supply Pressure Fell 4 to 373 Buy
McClellan Oscillator Rose to negative -22.65
McClellan Osc Summation Index + 2795.62
Plunge Protection Team Indicator -2.68, on an “OFF”
DJIA 10 Day Advance/Decline Indicator + 85.4 on a Buy
NYSE New Highs 91 New Lows 57
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 25th, 2018. The NDX Purchasing Power Indicator generated a Buy on July 2nd, the NDX 14 Day Stochastic triggered aSell 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 Enter Buy positions signalFriday, July 6th and remains there July 25th. On Wednesday July 25th, Demand Power rose 7 to 426, while Supply Pressure fell 5 to 402, telling us Wednesday’s rise was strong with modest short-covering.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal July 6th, 2018, and needs to fall below negative – 5.0 for a new Sell. It rose to positive + 9.4 on Wednesday, July 25th.
NDX PPI Rose 12 to + 283.57 On a Buy
NDX 30 Day Stochastic Fast 70.24 Slow 64.29 On a Buy
NDX 14 Day Stochastic Fast 66.67 Slow 65.48 On a Sell
NDX 10 Day Advance/Decline Line Indicator + 9.4 On a Buy
NDX Demand Power Up 7 to 426, Supply Pressure Fell 5 to 402 Buy
RUT PPI Rose 1 to + 192.64 on a Sell
RUT 10 Day Advance/Decline Line Indicator – 66.60 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 Rose 1 to 177.59, on a Sell
HUI 30 Day Stochastic Fast 15.00, Slow 22.22 on a Sell
HUI Demand Power Rose 2 to 385; Supply Pressure Fell 1 to 404, Sell