Today’s Market Comments:

 

Stocks catapulted higher Wednesday, November, 7th, helped by short-covering, after the results of the U.S. Mid-term elections. The rally moved our Blue Chip Demand Power / Supply Pressure Indicator to a Buy signal. Our key trend-finder for techs moved to a new Buy, joining Blue Chips and small caps. Other than volume being a bit light, the internals for the rally were strong. Prices rose to our initial targets for the final subwave {c} up of 2-up, correcting the October plunge.

 

With control of Congress split between Democrats (the House) and Republicans (the Senate), we can expect legislative gridlock. The question becomes, does political divisiveness degrade into political Civil War, or will some semblance of bipartisan cooperation be accomplished. If the charts are correct, and wave 3-down is coming after this wave 2-up rally completes, then political Civil War may be on the horizon. It will be interesting to see if a rollback of the corporate tax cuts happens, and if so, will tax cuts be shifted to the middle class and small businesses? The October plunge told us the stock market is worried about the future.

 

Tomorrow we get the latest Fed announcement on their policy for interest rates. With an economic slowdown evident, especially in housing and new jobs creation, much further tightening from the Fed could push the economy over the edge. October’s plunge suggests the stock market is expecting economic trouble.  

 

 

Metals rose slightly and Mining stocks fell Wednesday, and our HUI key trend-finder indicators remain on a Sell signal. Once wave 3 down’s plunge starts in stocks, Metals and Miners should rise sharply.

There was a Phi mate turn date ideally scheduled for Wednesday, November 7th. Phi mate turns can be off a few days from their ideal scheduled date. This may be pointing to the top for wave 2 over the coming days.

Our Blue Chip key trend-finder indicators moved to a Buy signal October 30th, 2018 and remain there Wednesday, November 7th. The Purchasing Power Indicator component triggered a Buy signal Tuesday, October 30th. The 14-day Stochastic Indicator generated a Buy on October 30th, and the 30 Day Stochastic Indicator generated a Buy on October 30th, 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 Wednesday, November 7th, rising 8 points (out of a possible 9 points), to positive + 2. It will need to rise above positive + 5 for a new Buy signal.

Demand Power rose 15 to 430 Wednesday while Supply Pressure fell 10 to 418, telling us Wednesday’s rise in Blue Chips was powerful with significant short-covering boosting prices. This DP/SP Indicator moved to an Enter Long Signal November 7th, and remains there Wednesday, November 7th, 2018. The previous Sell signal identified the start of the October plunge.

The Plunge Protection Team Indicator moved to an “OFF” signal on October 25th, which means the PPT is not 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. 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 and Silver rose slightly, and M iners fell Wednesday . They generated a Sell signal Thursday, October 25th, as the HUI 30 Day Stochastic triggered a Sell signal October 24th, and our HUI Purchasing Power Indicator generated a Sell on October 25th. 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 Short signal Wednesday, October 24th. On Wednesday, November 7th, Demand Power fell 4 to 396 while Supply Pressure rose 3 to 427, telling us Wednesday’s HUI decline was moderate.

DJIA PPI rose 12 to 42.93, on a Buy

DJIA 30 Day Stochastic Fast 83.33 Slow 51.33 On a Buy

DJIA 14 Day Stochastic Fast 96.67 Slow 79.44 On a Buy

DJIA % Above 30 Day Average 83.33

DJIA % Above 10 Day Average 96.67

DJIA % Above 5 Day Average 100.00

Secondary Trend Indicator Rose 8 to Positive +2, On a Sell

Demand Power Up 15 to 430, Supply Pressure fell 10 to 418 Buy

McClellan Oscillator Rose to Positive + 214.10

McClellan Osc Summation Index -678.10

Plunge Protection Team Indicator + 1.41, on an “OFF”  

DJIA 10 Day Advance/Decline Indicator + 561.9 on a Buy

NYSE New Highs 80 New Lows 51

Today’s Technology NDX Market Comments:

The NDX Short-term key Trend-finder Indicators generated a Buysignal Wednesday, November 7th, 2018, and remain there November 7th, 2018. The NDX Purchasing Power Indicator generated a Buy on November 7th, the NDX 14 Day Stochastic triggered a Buy signal on October 30th, 2018 and the 30 Day Stochastic triggered a Buy signal on November 1st. 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 November 7th. On Wednesday November 7th, Demand Power rose 16 to 466, while Supply Pressure fell 9 to 459, telling us the rise was strong with significant short-covering.

 

The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal November 1st, 2018, and needs to rise above positive + 5.0 for a new Buy. It rose to positive + 30.6 on Wednesday, November 7th.

 

NDX PPI Rose 21 to 196.63 On a Buy

NDX 30 Day Stochastic Fast 64.29 Slow 38.57 On a Buy

NDX 14 Day Stochastic Fast 86.90 Slow 70.95 On a Buy

NDX 10 Day Advance/Decline Line Indicator + 30.6 On a Buy

NDX Demand Power Up 16 to 466, Supply Pressure Fell 9 to 459 Sell

RUT PPI Up 6 to 159.99 on a Buy

RUT 10 Day Advance/Decline Line Indicator + 465.2 On a Buy

 

Today’s Mining Stocks and Precious Metals Market Comments:

Our HUI key trend-finder indicators moved to a Sell signal October 25th, 2018.

HUI PPI Fell 1 to + 161.38, on a Sell

HUI 30 Day Stochastic Fast 30.00, Slow 36.67 on a Sell

HUI Demand Power Fell 4 to 396; Supply Pressure Up 3 to 427, Sell