In the meantime, what say you to the boys about gold …
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Today's Market Comments:
The HUI Mining stocks 30 day Stochastic generated a new Buy signal Tuesday, July 27th. This moves our two component combination HUI key trend-finder indicator to Neutral from Sell.
Stocks fell Tuesday, July 27th, recovered about half the losses, but ended down. Volume was moderate. Trannies had the worst day, down 326 points. The Industrials are rising in the final wave e-up (see page 36). Proportionality for the waves suggests the timing for the coming major top is now looking like a late August to October time period event in 2021.
There is now a pretty significant Bearish divergence between the NYSE Cumulative Advance/Decline Line and the S&P 500. This is an important development, something we watch for as major tops approach. This checks one of the boxes warning of coming dangerous declines.
Once again, the stock market came within a whisker of generating a Hindenburg Omen observation Tuesday, but new Lows were slightly below the minimum 2.20 percent required threshold. New Highs came in a 98 with New Lows at 65, the lesser at 1.88 percent of total NYSE issues traded.
The S&P 500 and NASDAQ 100 are finishing the final leg of intermediate term Bearish Wedges, again, leading to a major top and coming significant decline. Small caps did not hit a new high last week, but are inside a sideways pattern that could / should lead to one final breakout higher over the next month or so, to a major top.
Trannies have quietly fallen 2000 points, 12 percent, since April 2021, and have formed a major Dow Theory non-confirmation with the Industrials. This is not good for the markets' future, and is something to expect at a major developing top.
Gold sits inside the handle of a major Bullish Cup and Handle pattern. Once it breaks out of this handle decline, a powerful rally will commence. Silver is finishing a sideways triangle pattern that should soon lead to a strong rising trend. It should track Gold. Mining stocks are bottoming, have a Bullish divergence between the HUI and our HUI 10 day average Advance/Decline Line Indicator, so also should soon track Gold higher. The Euro has been correlating closely with Gold, and looks ready to rise. Oil remains inside a long-term rising trend.
There was one change to our key indicators from Tuesday's price action. The three-component Blue-Chip key trend-finder indicator remains Neutral. The NASDAQ 100 three-component NDX key short-term trend-finder indicator moved to a Neutral signal from Buy, as the NDX PPI generated a new Sell signal. The small cap Russell 2000 Purchasing Power Indicator is on a Buy signal.
This coming top will be serious, and will lead to a significant Bear market, with a stock market crash occurring at some point inside this next major decline. A series of unexpected bad news events will accompany this New Bear market.
The stock market price action may not include a crash for a few months as a series of waves one down and corrective two up of varying degrees of trend occur. But when the subsequent wave threes hit, many all at once, it will be ugly. The wave two bounces will give folks a chance to prepare, albeit at lower prices than the recent all-time highs.
The charts for all markets show that a massive stock market crash is on its way, starting over the next 12 months.However, we need to see a new Hindenburg Omen occur before the crash begins. New Lows are getting up there, and showing up often. They were 65 on Tuesday, July 27th, reached 67 on Monday, July 26th, was 50 Friday July 23rd. In watching recent market action, one can almost smell a new Hindenburg Omen coming. New Lows above 40 is usually not a good sign, and we have seen five days above 40 the past few weeks, and three in a row.
Patterns are the stock market speaking to us, letting us know where they are headed next. They are the accumulation of all knowledge on the planet from all sources, and the patterns identify the next major trends we can expect.
The S&P 500 has formed a growing and large Bearish divergence with its Demand Power measure, and also its 10-day average Advance/Decline Line Indicator, suggesting a top is approaching. There is also a growing Bearish divergence between the Secondary Trend Indicator and the S&P 500 that warns of developing trouble.
Our intermediate term Secondary Trend Indicator generated a Sell signal July 16th. It fell 6 points Tuesday (out of a possible 9 points), to negative -7. It would have to rise back above positive + 5 for a new Buy signal.
Our Blue Chip key trend-finder indicators generated a Neutral signal July 20th, 2021 and remain there Tuesday, July 27th, 2021. The Purchasing Power Indicator component triggered a Buy signal Tuesday, July 20th. The 14-day Stochastic Indicator generated a Buy on July 23rd, 2021, and the 30 Day Stochastic Indicator generated a Sell on July 19th, 2021. 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.
Demand Power fell 4 to 424 Tuesday, while Supply Pressure rose 4 to 430, telling us Tuesday's Blue Chip decline was moderate. This DP/SP Indicator moved to a Sell Signal July 16th, and remains there Tuesday, July 27th, 2021.
Today's Mining Stocks and Precious Metals Market Comments:
Gold and Miners were flat, while Silver took a tumble, down 0.67 Tuesday, July 27th. Gold remains in the final stages of a massively Bullish Cup and Handle pattern, wrapping up the Handle portion. Once we see a new Buy signal in our HUI key trend-finder indicators, we can be confident that the next major rise in Gold is starting.
Gold should be headed sharply higher over the coming months and years. It could reach 3,000 as it rises, perhaps quite a bit higher than that over time.
Silver remains in a sideways triangle pattern, shown in charts on page 52. This decline seems to be what the pattern needs to complete, so if this is a predictive pattern at this time, then Silver should soon start a strong rally. No guarantees, patterns sometimes fail, but the pattern does look clearly defined with upper and lower boundary lines.
The HUI is seeing a sharp Bullish Divergence between prices and its 10-day average Advance/Decline Line Indicator, suggesting that Mining stocks, and likely Metals, are soon going to head higher, starting a new rising trend.
The HUI key trend-finder indicator triggered a Neutral signal July 27th, as the HUI 30 Day Stochastic triggered a Buy signal July 27th, 2021, and our HUI Purchasing Power Indicator triggered a Sell on June 3rd. 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 remains on a Sell signal from June 14th. On Tuesday, July 27th, Demand Power was flat at 367 while Supply Pressure fell 3 to 383, telling us Tuesday's HUI rise was moderate.
DJIA/SPY PPI Fell 3 to + 31.21, on a Buy
DJIA 30 Day Stochastic Fast 63.33 Slow 63.33 On a Sell
DJIA 14 Day Stochastic Fast 80.00 Slow 63.89 On a Buy
DJIA % Above 30 Day Average 63.33
DJIA % Above 10 Day Average 76.67
DJIA % Above 5 Day Average 60.00
Secondary Trend Indicator Fell 6 to Negative - 7, On a Sell
Demand Power Fell 4 to 424, Supply Pressure Rose 4 to 430 Sell
McClellan Oscillator fell to negative - 77.02
McClellan Osc Summation Index + 1407.05
Plunge Protection Team Indicator + 4.02, an "OFF" signal
DJIA 10 Day Advance/Decline Indicator -213.7 on a Sell
NYSE New Highs 98 New Lows 65
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators moved to a Neutral signal Wednesday, July 21st, 2021, and remain there July 27th, 2022. The NDX Purchasing Power Indicator generated a Buy on July 20th, 2021, the NDX 14 Day Stochastic triggered a Buy on July 21st, and the 30 Day Stochastic triggered a Buy signal on July 21st, 2021. 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 a Buy signalWednesday, July 21st and remains there July 27th. On Tuesday, July 27th, Demand Power Fell 6 to 453, while Supply Pressure Rose 11 to 439, telling us Tuesday's decline was powerful with deep pockets intervention supporting prices.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal July 16th, 2021, and needs to rise above positive + 5.0 for a new Buy. It fell to positive + 2.4 on Tuesday, July 27th.
NDX PPI Fell 8 to 316.00, On a Sell
NDX 30 Day Stochastic Fast 49.37 Slow 52.91 On a Buy
NDX 14 Day Stochastic Fast 56.96 Slow 55.32 On a Buy
NDX 10 Day Advance/Decline Line Indicator + 2.4 On a Sell
NDX Demand Power Fell 6 to 453, Supply Pressure Rose 11 to 439 Buy
RUT PPI Fell 2 to 194.44, on a Buy
RUT 10 Day Advance/Decline Line Indicator - 172.5, On a Sell
McHugh's Market Forecasting and Trading Report and this Executive Summary from that report is an educational service providing a body of technical analysis that measures the possibility and probability of future changes in mass psychology (swings from pessimism to optimism and back) which identifies possible new trends in major markets within various time frames, from very short term (daily) through very long term (years and decades). The tools we use are based upon price patterns, indicators and other proprietary measures that we have identified as correlative to future market trends. While an investor or trader could come up with ideas and strategies from the information published in our reports, at no time should a reader or viewer be justified in inferring that any such advice is intended by this publication or our other services. We are not offering investing advice, but are only offering some (but not all) of the information that can be used in the investment decision making process with your own personal financial adviser. Investing carries risk of losses. Information provided by Robert D. McHugh's Market Forecasting and Trading Report is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your adviser to explain all risks to you before making any trading and investing decisions. Information contained herein is believed to be reliable, but the publisher cannot be held liable for errors or omissions. No specific advice can be construed from the following. The reader is solely responsible for all actions taken. Please refer also to our disclaimer in the back of the newsletter from which this Executive Summary is derived. Copyright c 2021 Robert McHugh |
