Today’s Market Comments:
The stock market shook off the terrorist tragedy in Los Vegas Monday, October 2nd, as it has been shrugging off all domestic tragedies over the past six weeks. Prices rose sharply Monday, however our Demand Power / Supply Pressure Indicators tell us the power behind Monday’s rise was weak. This would be normal for a final leg of a long Bull market, rising prices on weakening internals. This supports the wave mapping that stocks are finishing the fifth and final waves of several degrees of patterns. They are completing the final lap of the large degree Rising Bearish Wedge from August 2015. If they want to hit the top boundary line for the converging pattern, that would suggest the Industrials could pop toward 22,800 to 23,000ish. But here is the thing, once this level is reached, once this pattern finishes, it will be 2007/2008 all over again. That doesn’t sound realistic right now as we see perpetual upside crawl no matter what the news, but technical analysis measures the psychological state of the market, and predicts when that psychological mood is about to change. It is about to change. Check out the chart on page 25. Our Secondary Trend Indicator has risen to an outlier level, an extreme overbought level. See chart on page 7. The chart on page 28 shows the S&P 500 is in its landing approach. The top is fast approaching.
Metals and Mining stocks are inside declining trends within a larger degree rising trend-channel.
The U.S. Dollar is bottoming, and once it rises above 94, we will have high confidence the next multi-month rising trend is starting.
Our Blue Chip key trend-finder indicators moved to a Sideways signal Friday, September 22nd, 2017 and remain there Monday, October 2nd. The Purchasing Power Indicator component triggered a Buy signal Wednesday, August 30th. The 14-day Stochastic Indicator generated a Sell on September 22nd, and the 30 Day Stochastic Indicator generated a Buy on October 2nd. 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 Monday, October 2nd, rising 7 points Monday (out of a possible 9 points), to positive + 32, needing to drop below negative -5 threshold for a new Sell.
Demand Power Rose 3 to 396 Monday while Supply Pressure fell 1 to 356, telling us Monday’s rise in Blue Chips was weak. This DP/SP Indicator moved to an Enter Long Signal Monday, September 11th, and remains there Monday, October 2nd, 2017.
The Plunge Protection Team Indicator moved back to an “Off” signal on August 23rd, which means the PPT is likely to stand down from supporting the markets while this indicator remains on an “Off.” This does not mean stocks cannot rally, it just means there is not 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 a Buy signal) and when it moves to a Neutral of 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 fell and Mining stocks were flat Monday, October 2nd. They generated a Sell signal Friday, September 15th, as the HUI 30 Day Stochastic triggered a Sell signal September 15th, and our HUI Purchasing Power Indicator generated a Sell on September 11th. 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 September 18th, the HUI Demand Power / Supply Pressure Indicator triggered an Enter Short signal. On Monday, October 2nd, Demand Power fell 1 to 389 while Supply Pressure fell 2 to 413, telling us Monday’s HUI move was weak.
DJIA PPI Rose 2 to + 61.25 on a Buy
DJIA 30 Day Stochastic Fast 76.67 Slow 66.00 On a Buy
DJIA 14 Day Stochastic Fast 70.00 Slow 60.56 On a Sell
DJIA % Above 30 Day Average 76.67
DJIA % Above 10 Day Average 66.67
DJIA % Above 5 Day Average 76.67
Secondary Trend Indicator Up 7 to Positive + 32, On a Buy
Demand Power Up 3 to 396, Supply Pressure Fell 1 to 356 Buy
McClellan Oscillator rose to positive + 99.74
McClellan Osc Summation Index + 3456.80
Plunge Protection Team Indicator -1.51, on an “Off”
DJIA 10 Day Advance/Decline Indicator + 411.3 on a Buy
NYSE New Highs 264 New Lows 19
Today’s Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated a Buy signal Thursday, September 21st, 2017, and remain there October 2nd, 2017. The NDX Purchasing Power Indicator generated a Buy on September 27th, the NDX 14 Day Stochastic triggered a Buy signal on October 2nd, 2017 and the 30 Day Stochastic triggered a Buy signal on August 30th. 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 Short positions signal Monday, September 25th and remains there October 2nd. On Monday October 2nd, Demand Power rose 1 to 413, while Supply Pressure rose 1 to 415, telling us Monday’s rise was weak.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal October 2nd, needing to fall below negative – 5.0 for a new Sell. It rose to positive + 6.6 on Monday, October 2nd, 2017.
NDX PPI Flat at 175.22 On a Buy
NDX 30 Day Stochastic Fast 63.00 Slow 59.40 On a Buy
NDX 14 Day Stochastic Fast 63.00 Slow 50.00 On a Buy
NDX 10 Day Advance/Decline Line Indicator + 6.6 On a Buy
NDX Demand Power Up 1 to 413, Supply Pressure Up 1 to 415 Sell
RUT PPI Rose 5 to 172.24 on a Buy
RUT 10 Day Advance/Decline Line Indicator + 560.0 On a Buy
Today’s Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Sell signal September 15th, 2017.
HUI PPI Flat at 189.67, on a Sell
HUI 30 Day Stochastic Fast 15.00, Slow 23.89 on a Sell
HUI Demand Power Fell 1 to 389; Supply Pressure Fell 2 to 413, Sell