Good news, that McHugh paints a 26,500 bullseye on the DOW. Mere easy 15% down from here and now.
I bought more gold in Asia trading time.
Today's Market Comments:
The stock market zigzagged down and up several times Thursday, May 19th, 2022, closing modestly lower. Volume was flat. The Industrials closed 236 points lower, the S&P 500 lost 22 points, the NASDAQ 100 fell 52, and the Russell 2000 was flat. The Industrials hit lower lows for the orderly 2022 crash. The price movement was corrective inside a larger degree declining trend.
Before we get into the stats, trend signals, and wave counts for stocks given Thursday's price movement, tonight, I want to first show you an important predictive stock market chart on page 35 in our Thursday Newsletter. It shows that the Dow Industrials have formed a right leaning, Head and Shoulders topping pattern from February 2022 through May 19th, 2022. It actually completed the pattern Thursday, May 19th, when the Industrials dropped to the neckline. This pattern is giving a downside price target of 26,500ish, and is now confirmed, meaning the probability of hitting the downside price target is high.
This pattern is particularly dangerous, since it is a right leaning pattern, which means the right shoulder's top is below the left shoulder's top, bridged by a perfect connect-the-dots declining neckline, warning that there is a further higher probability that the minimum downside price target will be reached. This pattern is predicting that the Dow Industrials could see an additional 15 percent, 4,500 point, drop over the coming weeks and months. This is not identifying "the" bottom for this Bear market, but is targeting a lower level from where they sit.
Stocks are entering new depths in a series of three, wave threes down. The power we saw from Wednesday, May 18th's decline is the sort of drop one would expect if three wave threes down of differing degrees were starting. Will there be corrective rallies during this phase? Sure. Yes. Perhaps quite strong if a short squeeze happens. However, if this is correct, stocks are headed significantly lower.
The decline May 18th and early May 19th hit a new lower low for the Industrials. That low concluded the first of five subwaves for wave {3} down, labeled wave {i} down. The zigzag movement during most of Thursday, May 19th was either all or part of corrective subwave {ii} up. Once complete, wave {iii} down of {3} down will send stocks sharply lower. See charts on pages 39 and 40 in tonight's U.S. Daily Newsletter at www.technicalindicatorindex.com
Our intermediate term Secondary Trend Indicator generated a Sell signal November 26th. It rose 3 points Thursday (out of a possible 9 points), to negative -9.
There was one change to our short-term indicators from Thursday's price action. The Blue Chip three component key indicator moved to Sell from Neutral. The NASDAQ 100 three component key indicator moved to Neutral from a Buy. The small cap Russell 2000's Purchasing Power Indicator remains on a Buy signal.
Our Blue Chip key trend-finder indicators generated a Sell signal May 19th, 2022 and remain there Thursday, May 19th, 2022. The Purchasing Power Indicator component triggered a Sell signal Wednesday, May18th. The 14-day Stochastic Indicator generated a Sell on May 19th, 2022, and the 30-Day Stochastic Indicator generated a Sell on May 19th, 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 was flat at 484 Thursday, while Supply Pressure Fell 6 to 595, telling us Thursday's Blue Chip decline was mild.
Today's Mining Stocks and Precious Metals Market Comments:
Our HUI Key Indicators moved to a Neutral signal from a Sell signal May 19th.
Gold rose 25.30 Thursday. Silver rose 0.36, and Mining stocks rose sharply, up 13.20.
In the charts on pages 57 through 59, we show an adjusted wave mapping for Gold. The Handle for Gold's Cup and Handle pattern has morphed into a declining Primary degree wave (2) 3-3-5 Flat pattern. It is an Intermediate degree wave A-down, B-up, C-down move. Gold is now inside the final wave C-down, which is declining in a five subwave move. Gold finds itself inside the third of five subwaves for C-down. We show a potential downside price target in the chart on page 56. Once this pattern completes, a powerful Primary degree wave (3) rally will follow.
Silver is finishing a wave 4-down corrective decline. It has further downside needed to complete the pattern. We show the chart and a projected downside price target in chart on page 58. Once it bottoms, a strong wave 5 rally will follow.
In the charts on pages 61 and 62, we show the wave mapping charts for Mining stocks. They are dropping inside corrective wave ii-down. We show a projected downside price target in the chart on page 62.
The HUI key trend-finder indicator moved to a Neutral signal May 19th, 2022, as the HUI 30 Day Stochastic triggered a Sell signal March 5th, and the HUI Purchasing Power Indicator triggered a Buy on May 19th. 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 Sell signal April 21st. On Thursday, Demand Power rose 9 to 363 while Supply Pressure fell 5 to 409, telling us Thursday's rise was strong, boosted by short covering.
DJIA/SPY PPI Fell 2 to negative - 85.22, on a Sell
DJIA 30 Day Stochastic Fast 10.00 Slow 20.67 On a Sell
DJIA 14 Day Stochastic Fast 16.67 Slow 29.44 On a Sell
DJIA % Above 30 Day Average 10.00
DJIA % Above 10 Day Average 20.00
DJIA % Above 5 Day Average 23.33
Secondary Trend Indicator Up 3 to Negative - 9, On a Sell
Demand Power Flat at 484, Supply Pressure Fell 6 to 595 Sell
McClellan Oscillator rose to negative - 3.84.
McClellan Osc Summation Index Negative - 1848.49
DJIA 10 Day Advance/Decline Indicator - 417.8 on a Sell
NYSE New Highs 9 New Lows 323
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators moved to a Neutral signal Friday, May 18th, 2022, and remain there May 19th, 2022. The NDX Purchasing Power Indicator generated a Sell on May18th, 2022, the NDX 14 Day Stochastic triggered a Buy on May 13th, 2022, and the 30 Day Stochastic triggered a Buy signal on May 13th, 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 May 19th. On Thursday, Demand Power Rose 1 to 431, while Supply Pressure Fell 4 to 485, telling us Thursday's decline was weak.
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 -9.0 on Thursday.
NDX 100 Purchasing Power Indicator Flat at 195.19 On a Sell
NDX 30 Day Stochastic Fast 14.00 Slow 16.60 On a Buy
NDX 14 Day Stochastic Fast 27.00 Slow 34.40 On a Buy
NDX 10 Day Advance/Decline Line Indicator - 9.0 On a Sell
NDX Demand Power Up 1 to 431, Supply Pressure Fell 4 to 485 Sell
RUT PPI Flat at + 156.36, on a Buy
RUT 10 Day Advance/Decline Line Indicator - 230.40, 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. |
