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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):
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This Weekend's Market Comments:
Stocks fell Friday, October 30th, on strong volume. The decline moved the Blue Chip and Tech Purchasing Power Indicators back to Sell signals, so our three-component key trend-finder indicators are now on a Sell signal. Whenever we get frequent signal reversals in a short period of time, it usually means stocks are inside either a triangle or wedge pattern. In the present case, it is quite possible stocks are forming a small declining wedge for wave 5-down. We have updated charts for all markets we cover in this weekend's report, so you can view this possible declining wedge on page 35.
If this count is correct, the declining wave 5 wedge could finish early next week, which would conclude the selling from the October 12th, and the September 3rd, highs. That will result in a bottom for wave (B) down, that could lead to a strong rally leg, wave (C )up of larger Cycle degree wave B-up.
It is interesting that the Industrials decline has reached and been stopped by its 200 day moving average. The Industrials have also formed a well-defined declining trend-channel from October 21st, which stopped Friday's rebound rally late in the day. A breakout above the declining upper boundary of this downward trend-channel would support the possibility that wave (B) down had bottomed. See chart on page 35. Friday's move did form a small "Hanging Man" candlestick pattern, which often is seen near short-term bottoms.
Stocks are solidly oversold in the short-run.
Approximately 75 percent of the time, we see a strong "Certainty" rally after a U.S. Presidential election. About 75 percent of the time we see a decline, an "Uncertainty" decline, into a Presidential election day. So, the decline from October 12th fits the prototypical "Uncertainty" decline.
To consider an alternate possibility that the wave B top arrived on September 3rd is problematic. The problem with this alternate labeling is that the decline from that top is not five waves, but rather is three subwaves to the September 2020 low. That suggests this decline in September is corrective and not the start of a new impulsive wave decline. The rise into the October 12th high has several overlapping waves, which fits well as an intermediate degree wave B rally, and the sharp decline since then, looks impulsive inside an A-B-C decline, the final intermediate degree wave C-down move occurring now, to complete Primary degree wave (B) down. See charts on page 34.
The alternate to all of this is stocks are starting a massive Cycle degree wave C-down of Supercycle degree wave (A) down as shown in the chart on page 32 which gives a potential forecast path for prices during this Grand Supercycle degree wave {IV} Bear market. This projection sees the entire Bear Market as one huge Flat pattern.
Crashes almost never occur unless we are on a Hindenburg Omen warning signal. That is not the case at this time, so expecting a crash from here would be anomalous, which is another reason we lean toward markets needing another wave up to complete the rally from March 2020 before the next crash wave down occurs.
If the typical post-election rally unfolds, Stocks could see a major move after the U.S. Election this coming Tuesday, or after Certainty arrives as to the election results, which could take several days after the election.
Gold, Silver, and Mining stocks rose Friday, October 30th. The rise moved our HUI Purchasing Power Indicator to a new Buy signal, still at odds with the HUI 30 day Stochastic, so our HUI / Gold key trend-finder indicator is now on a Neutral signal, improving from a Sell.
Gold is inside an A-down, B-up, C-down corrective decline from August 2020. Wave C-down is a five subwave move, and so far it looks like the first two subwaves have completed, with 3-down underway now. It needs subwaves 3, 4 and 5 down of C-down to complete (2) down. To follow will be a strong wave (3) up.
Our Blue Chip key trend-finder indicators generated a Sell signal October 30th, 2020 and remain there Friday, October 30th, 2020. The Purchasing Power Indicator component triggered a Sell signal Friday, October 30th. The 14-day Stochastic Indicator generated a Sell on October 19th, 2020, and the 30 Day Stochastic Indicator generated a Sell on October 26th, 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 Friday, October 30th, falling 4 points (out of a possible 9 points), to negative - 2. It will need to fall below negative - 5 for a new Sell signal.
Demand Power Fell 3 to 403 Friday while Supply Pressure Rose 5 to 444, telling us Friday's Blue Chip net decline was moderate. This DP/SP Indicator moved to an Enter Short Signal October 28th, and remains there Friday, October 30th, 2020.
The HUI generated a key trend-finder indicator Neutral signal October 30th, as the HUI 30 Day Stochastic triggered a Sell signal October 19th, 2020, and our HUI Purchasing Power Indicator generated a Buy on October 30th, 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 August 21st. On Friday, October 30th, Demand Power rose 4 to 379 while Supply Pressure Fell 4 to 394, telling us Friday's HUI rise was moderate.
DJIA/SPY PPI Fell 8 to negative -110.34, on a Sell
DJIA 30 Day Stochastic Fast 6.67 Slow 18.00 On a Sell
DJIA 14 Day Stochastic Fast 3.33 Slow 12.22 On a Sell
DJIA % Above 30 Day Average 6.67
DJIA % Above 10 Day Average 0.00
DJIA % Above 5 Day Average 10.00
Secondary Trend Indicator Fell 4 to Negative - 2, On a Buy
Demand Power Fell 3 to 403, Supply Pressure Up 5 to 444 Sell
McClellan Oscillator Fell to Negative -179.52
McClellan Osc Summation Index + 1230.48
Plunge Protection Team Indicator + 8.63, an "OFF" signal
DJIA 10 Day Advance/Decline Indicator - 497.0 on a Sell
NYSE New Highs 19 New Lows 64
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators generated a Sell signal Friday, October 30th, 2020, and remain there October 30th, 2020. The NDX Purchasing Power Indicator generated a Sell on October 30th, 2020, the NDX 14 Day Stochastic triggered a Sell on October 19th, and the 30 Day Stochastic triggered a Sell signal on October 19th, 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, October 26th and remains there October 30th. On Friday, October 30th, Demand Power Fell 4 to 440, while Supply Pressure Up 15 to 485, telling us Friday's decline was strong, with deep pockets intervention supporting prices.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal October 23rd, 2020, and needs to rise above + 5.0 for a new Buy. It fell to negative -24.8 on Friday, October 30th.
NDX PPI Fell 23 to 159.49, On a Sell
NDX 30 Day Stochastic Fast 19.51 Slow 34.63 On a Sell
NDX 14 Day Stochastic Fast 11.90 Slow 15.24 On a Sell
NDX 10 Day Advance/Decline Line Indicator - 24.8 On a Sell
NDX Demand Power Fell 4 to 440, Supply Pressure Rose 15 to 485 Sell
RUT PPI Fell 4 to + 73.60, on a Sell
RUT 10 Day Advance/Decline Line Indicator - 329.1, On a Sell
Today's Mining Stocks and Precious Metals Market Comments:
Our HUI key trend-finder indicators moved to a Sell signal October 19th, 2020.
HUI PPI Up 4 to 261.42 on a Buy
HUI 30 Day Stochastic Fast 25.00, Slow 26.67 on a Sell
HUI Demand Power Up 4 to 379; Supply Pressure Fell 4 to 394 Sell
McHugh's Market Forecasting and Trading Report |
