In case of doubt, the words be 'damn the torpedos, full short'
Today's Market Comments:
Stocks rose sharply Wednesday, March 9th. Volume was down sharply on the rise, which is what we would expect if the move is corrective and not the start of a new large upside trend. New Highs fell sharply from 108 to just 18 on this strong rise, which is a Bearish divergence with prices.
Is the Bear market over? Not hardly. Is the strong stock market decline from all-time highs a few months back over? Nope. Is a major corrective rally starting within this 2022 plunge? No. A Minor corrective rally, yes, but finishing.
It is interesting that in spite of the powerful multi-month stock market plunge in 2022, the stock market really has not gotten very oversold, not even close to selling capitulation. There is plenty of selling to come before that happens. This has been an "orderly" slow motion crash. Orderly is not good because it means a bottom is not at hand. Selling exhaustion is nowhere near. This is why we are seeing continuous new Hindenburg Omens. They arrive when selling is not exhausted, when selling is coming, not ending.
Corrective Micro degree wave 2-up for the Blue Chips, and wave ii-up for the NASDAQ 100, has topped, is complete. Now that these wave twos are finished, wave threes down are underway. Monday, March 7th's decline was a five wave drop, likely the first subwave for the next wave three down. Tuesday March 8th, through Wednesday, March 9th, saw a relatively small corrective bounce, that may be complete, or is close to completion. It may need another day or two to finish before another powerful decline arrives, one that could be the largest drop we have seen so far in 2022.
The Dow Industrials generated a Death Cross Tuesday, March 8th. It got worse in spite of Wednesday's price rise. The NASDAQ 100 generated a Death Cross last week. A Death Cross is where the 50 day Moving Average drops below the 200 day M.A. This is a dangerous development, and is considered at least an Intermediate-term (6 to 12 months) Bear Market signal. It is a factor that could trigger computer selling. Many consider this a longer-term Bear Market signal. The NDX decline from its all-time high in November 2021 has already seen a 22 percent crash.
The Industrials and Transportation average generated a Dow Theory Bear market signal a couple of weeks ago.
On March 8th, the stock market generated a third Hindenburg Omen observation for the third official H.O. that started March 1st. This means the odds of another stock market crash are higher than random, much higher, and this H.O. warning is on the clock through July 8th, 2022. There are again, now, three contemporaneous Official H.O's on the clock. The stock market crash warnings keep coming. New Lows rose to 500 Tuesday. Not good.
The recent stock market plunge came with several Hindenburg Omens on the clock simultaneously, warning of the serious fragility of stocks, and the likelihood of a crash. These proved prescient once again. There were H.O.'s on the clock for every single previous crash over the past 36 years. The new H.O. that just occurred warns that danger is not over, not even close.
The stock market currently sits on three simultaneous "official" Hindenburg Omen potential stock market crash signals. The H.O.'s are warning that the odds for a full-blown stock market crash are far higher than random at this time, one on the clock through July, one through May, the other through April. March into May is setting up to be particularly ugly.
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 rose 7 points Wednesday (out of a possible 9 points), to negative - 51.
The Blue Chip three component key indicator moved back to Neutral Wednesday, March 9th. The NASDAQ 100 three component key indicator generated a Neutral signal Wednesday, March 9th. The small cap Russell 2000's Purchasing Power Indicator generated a Sell signal March 7th.
Our Blue Chip key trend-finder indicators generated a Neutral signal March 9th, 2022 and remain there Wednesday, March 9th, 2022. The Purchasing Power Indicator component triggered a Buy signal Wednesday, March 9th. The 14-day Stochastic Indicator generated a Sell on March 8th, 2022, and the 30-Day Stochastic Indicator generated a Sell on March 8th, 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 rose 21 to 513 Wednesday, while Supply Pressure Fell 14 to 554, telling us Wednesday's Blue Chip rise was powerful, helped by short-covering. This DP/SP Indicator generated a Sell Signal January 18th.
Today's Mining Stocks and Precious Metals Market Comments:
Gold broke decisively above the declining upper boundary of the "Handle" portion of a huge Bullish Cup and Handle pattern that started in 2011. This is a major development for Gold, which very likely will carry over into Silver and Mining stocks. The charts on pages 56 through 59 tell the story. This is an impressive Bullish development for Gold bugs. Nothing moves straight up or down, there are corrections as prices progress, however the long-term picture for Gold is now quite Bullish, without the long wait. Gold is headed for 3,000. Gold has blown up past three initial resistance levels along the journey toward 3,000 - or even higher.
Gold may have completed small degree wave {iii} up, and Wednesday's decline is part of wave {iv} down. If so, to follow will be a powerful wave {v} up. Gold took a profit-taking breather Wednesday, March 9th, declining 55.1. Silver fell 1.08, while Mining stocks fell 4.50.
The HUI key trend-finder indicator triggered a Buy signal February 7th, 2022, as the HUI 30 Day Stochastic triggered a Buy signal February 7th, and the HUI Purchasing Power Indicator triggered a Buy on February 7th. 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 Wednesday, March 9th, Demand Power fell 4 to 446 while Supply Pressure rose 4 to 390, telling us Wednesday's decline was moderate.
DJIA/SPY PPI rose 9 to negative - 34.14, on a Buy
DJIA 30 Day Stochastic Fast 33.33 Slow 27.33 On a Sell
DJIA 14 Day Stochastic Fast 50.00 Slow 45.00 On a Sell
DJIA % Above 30 Day Average 33.33
DJIA % Above 10 Day Average 43.33
DJIA % Above 5 Day Average 60.00
Secondary Trend Indicator Up 7 to Negative - 51, On a Sell
Demand Power Up 21 to 513, Supply Pressure Fell 14 to 554 on a Sell
McClellan Oscillator rose to positive + 45.99
McClellan Osc Summation Index -1396.78
DJIA 10 Day Advance/Decline Indicator + 126.0 on a Buy
NYSE New Highs 18 New Lows 97
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators moved to a Neutral signal Wednesday, March 9th, 2022, and remain there March 9th, 2022. The NDX Purchasing Power Indicator generated a Buy on March 9th, 2022, the NDX 14 Day Stochastic triggered a Sell on March 7th, 2022, and the 30 Day Stochastic triggered a Sell signal on March 8th, 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 Thursday, March 3rd, and remains there March 9th. On Wednesday, March 9th, Demand Power Rose 7 to 507, while Supply Pressure Fell 13 to 536, telling us Wednesday's rise was strong, and due mostly to sellers hitting the sidelines.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Sell signal February 14th, and needs to rise above positive + 5.0 for a new Buy. It rose to positive + 4.2 on Wednesday, March 9th.
NDX 100 Purchasing Power Indicator rose 15 to 225.46 On a Buy
NDX 30 Day Stochastic Fast 27.00 Slow 26.20 On a Sell
NDX 14 Day Stochastic Fast 43.33 Slow 36.80 On a Sell
NDX 10 Day Advance/Decline Line Indicator + 4.2 On a Sell
NDX Demand Power Up 7 to 507, Supply Pressure Fell 13 to 536 Sell
RUT PPI Up 4 to + 179.04, on a Sell
RUT 10 Day Advance/Decline Line Indicator + 116.20, 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). |
