| | | Might be too early to <<deploy cheap puts>> for the timing service I rely upon for the technicals w/i which my ultra overarching macro plays has not given the Hindenburg Omen of the Jaws of Death etc etc
I never understood technicals but know they sport sufficient merit to warrant deference
“ What is interesting is that regardless of which large degree wave mapping scenario is occurring, both suggest stocks will top in the coming weeks, to be followed by a massive plunge.“
In any case, fwiw,
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Today's Market Comments:
Stocks rose Monday, on mild volume, with the exception of small caps that fell slightly. There were no changes to our key indicators. Our three-component Blue Chip key trend-finder indicator remains on a Neutral signal. Our NASDAQ 100 key trend-finder indicator remains on a Neutral signal. There was a small change in the McClellan Oscillator Monday, which suggests a large price move is likely over the coming days.
The stock market continues to oscillate up and down in choppy modest price action, in search of a trend. This weak price action will end in early 2021. All this price action is a topping process. The stock market is concluding rising trends, and looks ready to top over the coming weeks. This should be a major top. Bullish sentiment is near all-time highs, which is a contrarian indication of a major top close at hand.
Tonight we continue to see worsening large and growing Bearish Divergences between prices for the major averages and their 10-day average Advance/Decline Line Indicators, as well as their Demand Power measures, telling us a top is approaching that will lead to a declining trend of some significance. We also see a huge Bearish divergence between our Secondary Trend Indicator and the S&P 500. Divergences have excellent correlation with coming trend turns of significance. These are pointing to a significant decline starting in early 2021. This is a dangerous development for the stock market. Another plunge event is likely in 2021. Major negative news will accompany this plunge. This will provide an excellent opportunity for traders.
There is a Jaws of Death Megaphone Topping pattern from 2017, that is a finishing component, completing a massive Rising Bearish Wedge pattern from 1986, which suggests that Grand Supercycle degree wave {III} is ending now. The coming plunge in 2021 would commence Grand Supercycle degree wave {IV} down. In this scenario, the 2020 March crash did not start {IV} down, but was a key tentpole in the Jaws of Death pattern, with the rally since March 2020 as the final wave (E ) up to complete Grand Supercycle degree wave {III}. We have updated charts in this weekend's report.
The other possibility is that Grand Supercycle degree wave {IV} down started with the February/March 2020 crash, as shown in the chart on page 34. In this case, stocks look to be inside wave (C ) up, which is the end of a double zig zag pattern for Cycle degree wave B-up.
Once that tops, a massive Cycle degree wave C-down should crash the stock market again. This coming wave C-down suggests some fearful news will accompany it in 2021. This is all inside Grand Supercycle degree wave {IV} down, which is a massive Bear market that we find ourselves in at this time. Inside this Bear market will be several huge overlapping waves, as we have seen so far in 2020. We annotate a possibility for the Bear market price path in chart on page 35. So far, prices are closely tracking this projection pattern.
Once this rising trend completes, possibly in early 2021, the next wave down, C-down of (A) down, will likely be another crash. But to reiterate, we would need to see a new Hindenburg Omen Crash signal for that to occur, and there is no H.O. on the clock at this time. Over the past 35 years, there have been no stock market crashes unless an H.O. was on the clock. The wave mapping warns 2021 could be unkind to stocks.
What is interesting is that regardless of which large degree wave mapping scenario is occurring, both suggest stocks will top in the coming weeks, to be followed by a massive plunge.
On Monday, Gold fell, Silver rose sharply, and Mining stocks fell modestly. These markets also are looking for a definitive trend, and have been oscillating aimlessly for weeks. Our HUI key trend-finder indicators remain on a Neutral signal, as the HUI Purchasing Power Indicator is on a Sell signal, at odds with the HUI 30 day Stochastic. Gold and Silver often track this indicator. There are two scenarios for the short-term path for Gold. Once Gold rises above 1,975, we will have strong evidence that a powerful new rising trend has started, with substantially greater upside potential.
Our Blue Chip key trend-finder indicators generated a Neutral signal December 10th, 2020 and remain there Monday, December 28th, 2020. The Purchasing Power Indicator component triggered a Buy signal Tuesday, December 15th. The 14-day Stochastic Indicator generated a Sell on December 10th, 2020, and the 30 Day Stochastic Indicator generated a Sell on December 21st, 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 Buy signal Wednesday, May 20th, and remains there Monday, December 28th, up 3 point (out of a possible 9 points), to positive + 13. It will need to fall below negative - 5 for a new Sell signal.
Demand Power was flat at 424 on Monday, while Supply Pressure fell 2 to 399, telling us Monday's Blue Chip rise was milder than the price move suggests. This DP/SP Indicator moved to an Enter Long Signal November 4th, and remains there Monday, December 28th, 2020.
The HUI generated a key trend-finder indicator Neutral signal December 18th, as the HUI 30 Day Stochastic triggered a Buy signal December 2nd, 2020, and our HUI Purchasing Power Indicator generated a Sell on December 18th, 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 Exit Short signal December 17th. On Monday, December 28th, Demand Power fell 3 to 385 while Supply Pressure was flat at 390, telling us Monday's HUI decline was mild.
DJIA/SPY PPI Rose 4 to Positive + 0.63, on a Buy
DJIA 30 Day Stochastic Fast 60.00 Slow 54.67 On a Sell
DJIA 14 Day Stochastic Fast 53.33 Slow 51.67 On a Sell
DJIA % Above 30 Day Average 60.00
DJIA % Above 10 Day Average 60.00
DJIA % Above 5 Day Average 66.67
Secondary Trend Indicator Rose 3 to Positive + 13, On a Buy
Demand Power Flat at 424, Supply Pressure Fell 2 to 399 Buy
McClellan Oscillator Fell slightly to Negative - 22.36 from -16.77
McClellan Osc Summation Index + 4071.41
Plunge Protection Team Indicator -1.23, an "OFF" signal
DJIA 10 Day Advance/Decline Indicator + 188.7 on a Buy
NYSE New Highs 300 New Lows 6
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated a Neutral signal Tuesday, December 15th, 2020, and remain there December 28th, 2020. The NDX Purchasing Power Indicator generated a Buy on December 15th, 2020, the NDX 14 Day Stochastic triggered a Sell on December 22nd, and the 30 Day Stochastic triggered a Buy signal on November 3rd, 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 Long positions signal Wednesday, November 4th and remains there December 28th. On Monday, December 28th, Demand Power was Rose 5 to 445, while Supply Pressure Fell 2 to 415, telling us Monday's rise was moderate.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal November 5th, 2020, and needs to fall below negative - 5.0 for a new Sell. It fell to positive + 12.6 on Monday, December 28th.
NDX PPI Up 5 to 264.16, On a Buy
NDX 30 Day Stochastic Fast 71.95 Slow 71.22 On a Buy
NDX 14 Day Stochastic Fast 58.33 Slow 54.05 On a Sell
NDX 10 Day Advance/Decline Line Indicator + 12.6 On a Buy
NDX Demand Power Up 5 to 445, Supply Pressure Fell 2 to 418 Buy
RUT PPI Fell 1 to 172.99, on a Buy
RUT 10 Day Advance/Decline Line Indicator + 100.5, On a Buy
Today's Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Neutral signal December 18th, 2020.
HUI PPI Fell 1 to 250.83 on a Sell
HUI 30 Day Stochastic Fast 70.00, Slow 60.56 on a Buy
HUI Demand Power Fell 3 to 385; Supply Pressure Flat at 390 Sell
McHugh's Market Forecasting and Trading Report
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