Summary for the day, sell stocks, buy gold, and am guessing, buy silver
Hindenburg Omens all over the place
Looking more and more like GUSUDUOUEED (Gold Up, Silver Up, Dollar Up, Oil Up, Everythingelse Down)
McHugh …
Today's Market Comments:
Stocks rose sharply early Thursday, April 14th, only to give up all the gains, and decline sharply into the close. The intraday reversal is a sign of weakness for the stock market. Volume remained below the 10-day average.
The major Banking houses saw dramatic declines in their first quarter earnings, as reported Thursday. Wells Fargo's fell 21%, Citigroup's fell 46%, Morgan Stanley's dropped 11%, and Goldman's fell 42%. There is a potential systemic risk building right now throughout the entire banking industry, along with other industries that have large fixed interest rate term portfolios (for example, insurance companies and pension funds). With interest rates rising rapidly for term instruments, the present value of these portfolios is dropping sharply. Under mark to market accounting rules, this places pressure on bank capital levels. Federal Regulators will be moved to monitor stress tests to see if capital ratios are in distress as interest rates rise. This will consequently put pressure on banks to cut back on their lending, which in turn will slow the velocity of money, and ergo slow the economy even more than what a stock market plunge and the Fed's aggressive selling of its assets will do. This is all contractionary for the U.S. and world economies, and is not lost on the stock market. It sees this coming financial contagion.
On Thursday, the stock market triggered a third Hindenburg Omen observation for the recent fourth "Official" H.O. that is on the clock through August 14th.The stock market generated it fourth "official" simultaneous Hindenburg Omen on Tuesday, April 12th. We now have four on the clock at the same time. That has never happened before since we began tracking this indicator from 1986. One of the four expires in 2 days. That would still leave three simultaneous H.O. Stock Market Crash signals, this latest one on the clock through August 14th, 2022. This is a dangerous warning from the stock market.
We continue to see lower highs and lower lows. The stock market looks "heavy," ready to drop sharply.
The decline from the March 29th wave ii top is an overlapping five wave decline. This presents two wave mapping scenarios over the short-run. The first is that there has been a series of subwaves one-down and two up, with a strong wave three down imminent. The second scenario is that the five-wave decline from March 29th was a Declining Bullish Wedge for wave {1} down, with corrective wave {2} up underway, which will top (and may have already topped) below the March 29th top. We show these scenarios in charts updated tonight on pages 39, 39, 45, 46 and 50.
Stocks have completed the Right Shoulder of a Head & Shoulders top pattern for all three major indices, a typically Bearish pattern that looks to be in place to kick off wave iii-down.
There are Bearish divergences developing between the S&P 500 and the 10-day average Advance/Decline Line Indicator (page 20), and the S&P 500 and its Demand Power measure (page 13), and the NASDAQ 100 and its Demand Power measure (page 22).
We can expect a continuing wild ride for the Stock Market in 2022. There are going to be a total of 18 Phi Mate and significant Bradley Model turn dates throughout 2022. There will be 7 turns that both cycle methods identify together. Those will likely be major turns in the stock market. By comparison, there were only 8 total Phi Mate and Bradley Model turn dates during 2021, with only two turns identified by both at the same time. We will progressively feed these forward dates to you during 2022. Trend Turns typically occur +/- a few days from these dates.
Our intermediate term Secondary Trend Indicator generated a Sell signal November 26th. It fell 5 points Thursday (out of a possible 9 points), to negative - 36.
The Blue Chip three component key indicator is on a Sell signal. The NASDAQ 100 three component key indicator is back on a Sell signal as of April 14th, as its Purchasing Power Indicator moved back to a Sell. The small cap Russell 2000's Purchasing Power Indicator triggered a Sell signal from April 5th.
Our Blue Chip key trend-finder indicators generated a Sell signal April 6th, 2022 and remain there Thursday, April 14th, 2022. The Purchasing Power Indicator component triggered a Sell signal Thursday, March 31st. The 14-day Stochastic Indicator generated a Sell on April 1st, 2022, and the 30-Day Stochastic Indicator generated a Sell on April 6th, 2022. 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 10 to 494 Thursday, while Supply Pressure Rose 5 to 495, telling us Thursday's Blue Chip decline was strong, and due more to a lack of buying interest, allowing moderate selling to send prices sharply lower. Bids were scarce. This DP/SP Indicator generated a Neutral Signal April 14th.
Today's Mining Stocks and Precious Metals Market Comments:
The HUI generated a new Purchasing Power Indicator Neutral signal April 5th, as its 30 day Stochastic moved to a Sell, at odds with the HUI Purchasing Power Indicator, which remains on a Buy signal, but is weakening.
Gold may have formed a second Bullish Cup and Handle pattern from 2020, at the tail end of a larger degree Bullish Cup and Handle pattern from 2011. In the chart on page 58, we show this latest pattern. If this is correct, Gold is now working through the Handle portion. Once complete, another strong rally leg will take Gold substantially higher.
As for the larger degree Bullish Cup and Handle pattern, Gold broke decisively above the declining upper boundary of the "Handle" portion of a huge Bullish Cup and Handle pattern that started in 2011, several weeks ago. This is a major development for Gold, which very likely will carry over into Silver and Mining stocks. The charts on pages 54 through 58 tell the story. Nothing moves straight up or down, there are corrections as prices progress, however the long-term picture for Gold is quite Bullish. Gold is headed for 3,000.
Gold may have completed small degree wave {3} up, with subwave {4} down underway now. If so, to follow will be a powerful wave {5} up. Gold fell 9.8 Thursday. Silver fell 0.33, while Mining stocks rose 1.10.
The HUI key trend-finder indicator moved to a Neutral signal April 5th, 2022, as the HUI 30 Day Stochastic triggered a Sell signal March 5th, and the HUI Purchasing Power Indicator triggered a Buy on April 1st. 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 triggered a Buy signal February 14th. On Thursday, April 14th, Demand Power fell 4 to 382 while Supply Pressure fell 1 to 376, telling us Thursday's rise was mild.
DJIA/SPY PPI fell 5 to negative -22.79, on a Sell
DJIA 30 Day Stochastic Fast 53.33 Slow 54.67 On a Sell
DJIA 14 Day Stochastic Fast 50.00 Slow 41.11 On a Sell
DJIA % Above 30 Day Average 53.33
DJIA % Above 10 Day Average 56.67
DJIA % Above 5 Day Average 50.00
Secondary Trend Indicator fell 5 to Negative - 36, On a Sell
Demand Power Fell 10 to 491, Supply Pressure Up 5 to 495 Neutral
McClellan Oscillator fell to negative -39.68
McClellan Osc Summation Index + 372.47
DJIA 10 Day Advance/Decline Indicator - 329.2 on a Sell
NYSE New Highs 142 New Lows 278
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators moved to a Sell signal Thursday, April 14th, 2022, and remain there April 14th, 2022. The NDX Purchasing Power Indicator generated a Sell on April 14th, 2022, the NDX 14 Day Stochastic triggered a Sell on March 31st, 2022, and the 30 Day Stochastic triggered a Sell signal on April 5th, 2022. 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 Sell Signal Monday, April 11th, and remains there April 13th. On Thursday, April 14th, Demand Power Fell 7 to 426, while Supply Pressure Rose 6 to 447, telling us Thursday's decline was moderate to strong.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal April 11th, and needs to rise above positive + 5.0 for a new Buy. It rose to negative - 15.6 on Thursday, April 14th.
NDX 100 Purchasing Power Indicator Fell 10 to 246.39 On a Sell
NDX 30 Day Stochastic Fast 53.33 Slow 54.67 On a Sell
NDX 14 Day Stochastic Fast 50.00 Slow 41.11 On a Sell
NDX 10 Day Advance/Decline Line Indicator - 15.6 On a Sell
NDX Demand Power Fell 7 to 426, Supply Pressure Up 6 to 447 Sell
RUT PPI Fell 1 to + 180.18, on a Sell
RUT 10 Day Advance/Decline Line Indicator -277.60, 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). |
