McHugh weekend missive
The above are screen-captures of Pages 34-35
Below is the busy-person summary of the entire read
Today's Market Comments:
Forget about Elliott wave mappings, Price patterns, Key Buy or Sell signals, or Hindenburg Omens for a moment. While important, I want to show you something in addition to them that you might find interesting.
This weekend's newsletter, in the charts on pages 34 and 35, shows what to me is a fascinating set of indicator, price, and time studies all converging right now, in concert, pointing to an imminent top and drop. Let me explain here without the charts, however I highly recommend you take the time to study the charts, for when I loaded all the data onto them, a picture pops that is extremely interesting, at least to market nuts like me anyway. I am not sure how many other times there has been such a convergence occurrence. I am sure there have been many, but I cannot recall when.
For those of us who believe that the stock market tends to move in an orderly fashion, and that trend turns are orderly and correlate to certain non-price factors, the charts on pages 34 and 35 show that, right now, the Dow Industrials are entering a period of convergence of several "orderly factors," that point to an imminent stock market top and drop. Let's explore:
1. The Industrials have declined within a large well-defined trend-channel from late 2021, with the upper boundary lines stopping significant tops and bottoms five prior times. The Industrials are now close to reaching the upper boundary again, which previously led to strong declines. As of March 25th, 2022's close, the Industrials only need another 303 point rally to reach that trend line precisely.
2. If we look at the blue circles in the chart, with notation "A," what we see is that just prior to the last top on February 9th, the stock market gyrated within the price range separating its 50 day and 200 day moving averages, which formed a tight range of support and resistance. The Industrials then fell sharply. The same situation is occurring again now, at the end of March, oscillating inside the expanding recent "Death Cross" space.
3. If we look at the red circles with notation "M," what we see is that when the Daily MACD Histogram is turning down from a positive position, a decline of significance started throughout this declining trend-channel. The Industrials' MACD position is there again now.
4. The rally from February 24th, 2022 through March 25th, 2022 so far has retraced 57.1% of the entire decline from 1.5.22 through 2.24.22. A Fibonacci 61.8% retracement would occur at 35,164.89, 303.64 points above the March 25th close at 34,861.24. Interestingly, this 61.8% retrace level would perfectly intersect the upper boundary of the declining trend-channel. How is this for "Order?" However, there is also converging time cycle order.
5. Time Cycle Convergence: If the Industrials want to reach the upper boundary line of the declining trend-channel, they will likely only need a day or two to achieve that. That places a potential top arriving this coming week, between March 28th and April 4th. There is a scheduled Phil mate turn date for March 28th +/- a few days, as well as a Bradley model turn date scheduled for April 4th +/- a few days, as well as a Fibonacci Cluster turn window through March 30th +/- (see page 33). It is reasonable to conclude they are all identifying the same trend turn, in present case, a top.
6. Phi mate turn dates have already identified key tops or bottoms within the declining trend-channel from late 2021 through March 2022. It identified the bottom on December 1st, 2021, and the bottom on January 27th. There is a Phi date scheduled for March 28th, 2022 +/- a few days. Phi dates, can be tops or bottoms. These are shown on the page 35 chart with the notation "P."
7. Bradley model turn dates already identified a key top and a key bottom within this important declining trend-channel from late 2021 through March 2022. It identified the top on January 5th, 2022, and the bottom on January 27th. These are shown on page 35 with the notation "B."
So, when we consider the trend-channel upper boundary, the MACD rollover, the 50 day and 200 day topping resistance levels, the Fibonacci Phi ratio 61.8% retracement target, the Phi Mate, Bradley model, and Fibonacci Cluster turn window Time cycles, all completely independent analytical tools, all converging at the same place and time, and then consider that the trend has been rising into this over the past month, there is a strong possibility a top and drop is imminent. And take note, none of this considers Elliott Wave mapping or patterns that look to be finishing now as well, nor Hindenburg Omens that remain on the clock.
Now there are no guarantees in this business, we only point out probabilities based upon what the market is telling us, via several different bodies of analytical tools. So, let's say the market has reached a bifurcation point of a probable top and drop. Could the market continue to rise and blow up this set of Bearish warnings? Yes. If the Fed came out tomorrow and said it was going to pump five trillion of dollars into the economy next week, then sure it could go up. However, the technical analysis odds suggest otherwise.
Stocks were mixed Friday, March 25th. Volume was weak. Advancers and Decliners were equal. The 10 day average TRIN has reached an overbought level, where tops can occur.
Stocks are in the very last stage of completing an {a} up, {b} triangle, {c} up pattern for corrective wave 2-up. This corrective rally started from the February 24th lows, has consumed all of March, and is now about to complete. Once this rally ends, the entire correction from February 24th will be complete, and a strong decline, wave 3-down will begin. We have updated all charts for all markets we cover in this weekend's newsletter.
The stock market almost triggered another Hindenburg Omen observation again on Friday, March 25th, but failed due to a positive McClellan Oscillator. This is the fourth day in a row an H.O. almost occurred. Regardless, 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.
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 3 points Thursday (out of a possible 9 points), to negative - 30.
The Blue Chip three component key indicator moved to a Buy signal March 17th. The NASDAQ 100 three component key indicator generated a Buy signal Thursday, March 24th, as the NDX Purchasing Power Indicator triggered a Buy, in agreement with the other two component indicators. The small cap Russell 2000's Purchasing Power Indicator is on a Buy signal from March 16th.
Our Blue Chip key trend-finder indicators generated a Buy signal March 17th, 2022 and remain there Friday, March 25th, 2022. The Purchasing Power Indicator component triggered a Buy signal Tuesday, March 15th. The 14-day Stochastic Indicator generated a Buy on March 15th, 2022, and the 30-Day Stochastic Indicator generated a Buy on March 17th, 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 1 to 551 Friday, while Supply Pressure Fell 10 to 501, telling us Friday's Blue Chip rise was weak. This DP/SP Indicator generated a Buy Signal February 17th.
Today's Mining Stocks and Precious Metals Market Comments:
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 61, 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 55 through 59 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 8.0 Friday. Silver fell 0.31, while Mining stocks fell 0.73.
The HUI key trend-finder indicator moved to a Neutral signal March 14th, 2022, as the HUI 30 Day Stochastic triggered a Buy signal February 7th, and the HUI Purchasing Power Indicator triggered a Sell on March 14th. 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 Friday, March 25th, Demand Power fell 5 to 417 while Supply Pressure fell 3 to 392, telling us Friday's move was mild.
DJIA/SPY PPI rose 1 to negative - 7.77, on a Buy
DJIA 30 Day Stochastic Fast 80.00 Slow 65.33 On a Buy
DJIA 14 Day Stochastic Fast 86.67 Slow 88.89 On a Buy
DJIA % Above 30 Day Average 80.00
DJIA % Above 10 Day Average 83.33
DJIA % Above 5 Day Average 83.33
Secondary Trend Indicator was Up 3 to Negative - 30, On a Sell
Demand Power Fell 1 to 551, Supply Pressure Fell 10 to 501 on a Buy
McClellan Oscillator rose to positive + 154.61
McClellan Osc Summation Index - 205.00
DJIA 10 Day Advance/Decline Indicator + 304.9 on a Buy
NYSE New Highs 169 New Lows 187
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators moved to a Buy signal Thursday, March 24th, 2022, and remain there March 25th, 2022. The NDX Purchasing Power Indicator generated a Buy on March 24th, 2022, the NDX 14 Day Stochastic triggered a Buy on March 16th, 2022, and the 30 Day Stochastic triggered a Buy signal on March 16th, 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 Buy Signal Tuesday, March 22nd, and remains there March 25th. On Friday, March 25th, Demand Power Fell 6 to 481, while Supply Pressure Fell 6 to 463, telling us Friday's decline was weak.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal March 18th, and needs to fall below negative - 5.0 for a new Sell. It rose to positive + 30.6 on Friday, March 25th.
NDX 100 Purchasing Power Indicator Flat at 270.86 On a Buy
NDX 30 Day Stochastic Fast 73.00 Slow 70.20 On a Buy
NDX 14 Day Stochastic Fast 92.00 Slow 91.80 On a Buy
NDX 10 Day Advance/Decline Line Indicator + 30.6 On a Buy
NDX Demand Power Fell 6 to 481, Supply Pressure Fell 6 to 463 Buy
RUT PPI Flat at + 184.31, on a Buy
RUT 10 Day Advance/Decline Line Indicator + 261.10, On a Buy
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