Way-point calibration. My first-read conclusion, the so-far crashette is going to hurt, given its ferocity, and that
(i) it is not a man-made trade-war that can be negotiated away, and even surrendering would not do, for the supply-chain savagery allows for no prisoners, and
(ii) it is not a liquidity event that can be papered over by the Fed unless it is a Paper WMD that destroys much more than it saves (that does not mean 'they' would not try it, along w/ the kitchen sink, per Battle of Stalingrad
Date: 28 February 2020 at 14:09:26 GMT+7
Subject: Worst Market Day Ever! McHugh's Thursday Market Forecast Newsletter, February 27th
Dear Subscribers,
...
For those of you with busy schedules, here is an executive summary (for a more intense detailed report, with charts, more statistics, trend analysis, and extraordinary developments, click on the U.S. Weekend and Daily Market Forecast Reports at the website):
Note to Platinum and Silver Members: We conducted four trades today, and took $39,000 in profits from two options positions and one ETF position. We entered a new Platinum position later in the day. So far in 2020, we have generated over $60,000 in profits from 16 trades. 14 winners, 2 losers at this point.
Today's Market Comments:
Stocks continued their crash Thursday, February 27th, as we warned was coming in Wednesday's newsletter. Thursday saw the largest one-day point decline for the Industrials in the history of the stock market. The Industrials have now lost 3,750 points in the opening of this Bear Market. More downside is coming. Stocks closed Thursday at bottom tick. Bottoms do not happen at bottom tick. The Industrials have now see all their gains from last August 2019 get wiped out in four days. 28% of the S&P 500 stocks are now crashing, with declines greater than 20 percent so far. Our Intermediate term Secondary Trend Indicator triggered a Sell signal Thursday.
We would not be surprised if by the end of next Monday, this will be an official stock market crash. This is all happening with two official Hindenburg Omen stock market crash indicators on the clock. This is exactly what one would expect from the opening of Grand Supercycle degree wave {IV} down, which could be a Bear market for the ages. Charts have been warning about this for a while now, giving folks time to prepare. If stocks are inside wave 3-down of iii down, then the next day or two will be nasty, not gentle like this past week has been. If this is wave v-down underway, we could see capitulation and a temporary bottom in the next day or so, wave 1-down, with 2-up next.
Among the concerns affecting the markets at this time, in addition to health and life risks from the Coronavirus, are supply issues. Without parts, supplies, and labor or materials resources, there is no product that can be sold to make money. But the next concern to come will be demand concerns. As profits dive, as wages are lost, consumer and business demand for goods and services will slow.
At some point if stocks get hammered enough, corporations will be tempted to dump this year's earnings and clean up balance sheets thinking this is an opportunity to do so. All of the above means earnings estimates are going to get crushed, and to normalize Price to earnings ratios, stock prices must fall much further than we see now. This will be evident as wave 3-down hits mid-year 2020.
Mining stocks are getting caught in this downdraft as they are a hybrid of precious metals underground and an operating company that is facing all the same logistical risks and disruptions the major corporations are with global trade shutting down or inhibited, so are selling off now. Gold is holding up as a safe haven. U.S. Bonds and Treasuries are hitting all-time highs as they march toward negative interest rates, which we will likely see as this Bear Market Recession deepens.
Our Blue Chip key trend-finder indicators generated a Sell signal February 24th, 2020 and remain there Thursday, February 27th, 2020. The Purchasing Power Indicator component triggered a Sell signal Friday, February 21st. The 14-day Stochastic Indicator generated a Sell on February 18th, 2020, and the 30 Day Stochastic Indicator generated a Sell on February 24th, 2020. 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 Thursday, February 27th, and remains there Thursday, February 27th, down 9 points (out of a possible 9 points), to negative -8. It will need to rise above positive + 5 for a new Buy signal.
Demand Power fell 9 to 367 Thursday while Supply Pressure rose 32 to 487 telling us Thursday's Blue Chip decline was powerful with serious deep pockets Plunge Protection Team buying to provide bids for this falling knife that not many want to buy. Given the volume we are seeing, the PPT is using a ton of money to support this market. This DP/SP Indicator moved to an Enter Short Signal February 24th, and remains there Thursday, February 27th, 2020.
The HUI generated a key trend-finder indicator Neutral signal February 27th, as the HUI 30 Day Stochastic triggered a Buy signal February 18th, 2020, and our HUI Purchasing Power Indicator generated a Sell on February 27th, 2020. 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 February 27th. On Thursday, February 27th, Demand Power fell 7 to 425 while Supply Pressure rose 19 to 446, telling us Thursday's HUI decline was powerful.
DJIA PPI Fell 61 to negative - 31.35, on a Sell
DJIA 30 Day Stochastic Fast 0.00 Slow 12.67 On a Sell
DJIA 14 Day Stochastic Fast 0.00 Slow 13.33 On a Sell
DJIA % Above 30 Day Average 0.00
DJIA % Above 10 Day Average 0.00
DJIA % Above 5 Day Average 0.00
Secondary Trend Indicator Fell 9 to Negative -8, On a Sell
Demand Power Fell 9 to 367, Supply Pressure Up 32 to 487 Sell
McClellan Oscillator Fell to negative - 379.97
McClellan Osc Summation Index + 1757.55
Plunge Protection Team Indicator + 26.00, an "ON" signal
DJIA 10 Day Advance/Decline Indicator - 889.8 on a Sell
NYSE New Highs 22 New Lows 696
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated a Sell signal Friday, February 21st, 2020, and remain there February 27th, 2020. The NDX Purchasing Power Indicator generated a Sell on February 21st, 2020, the NDX 14 Day Stochastic triggered a Sell signal on February 21st, 2020 and the 30 Day Stochastic triggered a Sell signal on February 21st, 2020. 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, February 24th and remains there February 27th. On Thursday, February 27th, Demand Power was Fell 7 to 413, while Supply Pressure Rose 25 to 489, telling us Thursday's plunge was powerful with deep pockets PPT intervention throwing a ton of money at the market with bids, but overwhelmed by selling. The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal February 25th, 2020, and needs to fall below negative - 5.0 for a new Sell. It fell to negative -38.2 on Thursday, February 27th.
NDX PPI Fell 52 to 152.70, On a Sell
NDX 30 Day Stochastic Fast 8.54 Slow 23.41 On a Sell
NDX 14 Day Stochastic Fast 1.19 Slow 12.86 On a Sell
NDX 10 Day Advance/Decline Line Indicator - 38.2 On a Sell
NDX Demand Power Fell 7 to 413, Supply Pressure Rose 25 to 489 Sell
RUT PPI Fell 22 to + 108.93, on a Sell
RUT 10 Day Advance/Decline Line Indicator -604.6, On a Sell
Today's Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Neutral signal February 18th, 2020.
HUI PPI Fell 13 to + 222.15 on a Sell .
HUI 30 Day Stochastic Fast 40.00, Slow 59.44 on a Buy
HUI Demand Power Fell 7 to 425; Supply Pressure Up 19 to 446 Sell
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