Fwiw, imo a lot
Robert McHugh this day
Today's Market Comments:
Gold is taking a short-term beating, down 27 Wednesday, July 6th, after losing 37 a day earlier. However, Gold is tracking the precise path we annotated the past several weeks, shown in chart on page 55, which we updated tonight. Gold is falling in the final Minor degree subwave 5-down of Intermediate degree C-down, which will complete Primary degree (2) down once it bottoms. Wave fives are typically more dramatic for metals than wave threes. So as Gold is in wave 5-down, we are seeing a strong decline at this time.
Blue Chip and Tech Stocks rose modestly Wednesday, July 6th. Small caps and Trannies fell modestly. Volume was light.
Stocks are drifting sideways to slightly up in a dangling pattern, which we expect could continue the next week to 10 days. Every day that this continues feeds expectantly into the large degree patterns, wave mappings and cycle analysis we are tracking that is warning that a powerful vertical move will start in the middle of this month. That move is likely going to be down.
Take a look at the pattern in the chart on page 35. This is a large Rounded Bearish Top in the Industrials. It is complete, and textbook. This pattern has a neckline that has just completed. Waterfall declines often follow once the neckline is completed. This is precisely where the Industrials sit right now. We include a snapshot of the textbook resolution for this pattern.
Also, of serious concern right now, in the chart on page 37, we show that the Industrials have completed a right leaning Head & Shoulders topping pattern. This pattern predicts a soon-to-occur decline to 25,000 for the Industrials. This pattern does not predict a bottom. It gives a minimum downside target along the way toward a bottom.
I do not have any idea what fearful events, or "selling reason" events, are about to occur in July, but the patterns are telling us something is coming, and it is not going to be pleasant, to put it mildly.
On to the wave mapping, which fits with the warnings from the above two patterns. This coming waterfall decline will be three simultaneous wave threes down of three different degrees of trend, waves {3} down of 3-down of iii down, and will perhaps be the worst since the Bear market started. It could be awful. There will be corrective bounces along the way, but the large degree trend is down hard, with lower highs and lower lows. Caution is warranted.
For the next week or two, stocks are in the proverbial calm before the storm. Wave {1} down bottomed two weeks ago, and wave {2} up is underway, and is correcting the recent wave {1} decline. This much we know.
It is possible that wave {2} topped on Tuesday, June 28th. My own feeling is, no, that was not the completion of wave {2}. One reason is that wave {3} down will be powerful, and is not likely to start out calmly, or with oscillating short moves like we have seen the past week and a half. Instead, it probably will begin with a bang, with panic selling. So, I am leaning toward the scenario that wave {2} will dangle out there until the middle of July, when the next key cycle turn dates are due.
So, let's examine the progress pattern for wave {2} up from June 17th. We believe it is likely that wave {a} up of {2} up topped Tuesday, June 28th, and the price movement since then has been part or all of subwave {b} down, with {c} up to follow and complete this corrective rise from May 20th. See charts on pages 39, 46, and 49.
Why are we focused on mid-July for trouble? In addition to the timing clues from the above patterns and wave mappings, there is both a Phi mate turn date (July 21st) and a Bradley Model turn date (July 15th) scheduled around the approximate same time period. The Bradley turn date is of major strength. Usually when both of these cycle turn dates occur close to each other, the odds are high that a significant trend turn will occur. So we are increasingly of the opinion that this could be the kickoff of the next major decline.
Trend turns during this Bear market throughout 2022 have been remarkably correlated with Phi mate and Bradley model turn dates.
Money can be made in this economic environment.
Our intermediate term Secondary Trend Indicator generated a new Buy signal June 21st, 2022. It fell 2 points Wednesday (out of a possible 9 points), to positive + 2.
There were no changes to our short-term key indicators from Wednesday's price action. The Blue Chip three component key indicator remains on a Neutral signal. The NASDAQ 100 three component key indicator remains on a Neutral signal. The small cap Russell 2000 remains on a Buy signal.
Our Blue Chip key trend-finder indicators generated a Neutral signal June 28th, 2022 and remain there Wednesday, July 6th, 2022. The Purchasing Power Indicator component triggered a Sell signal June 28th. The 14-day Stochastic Indicator generated a Buy on June 22nd, 2022, and the 30-Day Stochastic Indicator generated a Buy on June 23rd, 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 5 to 491 Wednesday, while Supply Pressure Fell 2 to 522, telling us Wednesday's move was weak.
Today's Mining Stocks and Precious Metals Market Comments:
Gold fell 27.4 Wednesday. Silver rose 0.04, and Mining stocks fell 0.95.
Gold is tied up in the Handle portion of its Large Long-term Cup and Handle pattern from 2012. There are typically two possible patterns for Handles. We show both of them from the textbook on page 57. Gold has chosen the more complex, time-consuming pattern. Once complete, a powerful rally will follow.
As for Gold's wave mapping, in the charts on pages 55 through 57, we show 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 fifth of five subwaves for C-down. We show a potential downside price target in the chart on page 55. 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 59 and 60, 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 60.
The HUI key trend-finder indicator triggered a Sell signal June 13th, 2022, as the HUI 30 Day Stochastic triggered a Sell signal June 13th, and the HUI Purchasing Power Indicator triggered a Sell on June 13th. 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 Wednesday, Demand Power fell 1 to 360 while Supply Pressure fell 2 to 410, telling us Wednesday's decline was weak.
DJIA/SPY PPI Flat at negative - 99.26, on a Sell
DJIA 30 Day Stochastic Fast 43.33 Slow 38.00 On a Buy
DJIA 14 Day Stochastic Fast 56.67 Slow 58.89 On a Buy
DJIA % Above 30 Day Average 43.33
DJIA % Above 10 Day Average 46.67
DJIA % Above 5 Day Average 60.00
Secondary Trend Indicator Fell 2 to Positive + 2, On a Buy
Demand Power Fell 5 to 491, Supply Pressure Fell 2 to 522 Buy
McClellan Oscillator fell to positive + 12.36
McClellan Osc Summation Index Negative - 517.01
DJIA 10 Day Advance/Decline Indicator + 50.4 on a Buy
NYSE New Highs 12 New Lows 182
Today's Technology NDX Market Comments:
The NDX Short-term key Trend-finder Indicators moved to a Neutral signal Tuesday, June 28th, 2022, and remain there July 6th, 2022. The NDX Purchasing Power Indicator generated a Sell on June 28th, 2022, the NDX 14 Day Stochastic triggered a Buy on June 23rd, 2022, and the 30 Day Stochastic triggered a Buy signal on June 23rd, 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 Tuesday, June 28th, and remains there July 6th. On Wednesday, Demand Power was Flat at 429, while Supply Pressure Fell 3 to 434, telling us Wednesday's rise was mild.
The NDX 10 Day Average Advance/Decline Line Indicator triggered a Buy signal June 24th, and needs to fall below negative - 5.0 for a new Sell. It fell to positive + 8.0 on Tuesday.
NDX 100 Purchasing Power Indicator Up 1 to 189.39 On a Sell
NDX 30 Day Stochastic Fast 41.00 Slow 34.20 On a Buy
NDX 14 Day Stochastic Fast 71.00 Slow 60.40 On a Buy
NDX 10 Day Advance/Decline Line Indicator rose to + 8.0, On a Buy
NDX Demand Power Flat at 429, Supply Pressure Fell 3 to 434 Sell
RUT PPI Fell 1 to + 152.38, on a Buy
RUT 10 Day Advance/Decline Line Indicator + 35.3, On a Buy
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. We are not offering investing advice, but are only offering some (but not all) of the information that can be used in the investment decision making process with your own personal financial adviser. Investing carries risk of losses. Information provided by Robert D. McHugh's Market Forecasting and Trading Report is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your adviser to explain all risks to you before making any trading and investing decisions. Information contained herein is believed to be reliable, but the publisher cannot be held liable for errors or omissions. No specific advice can be construed from the following. The reader is solely responsible for all actions taken. Please refer also to our disclaimer in the back of the newsletter from which this Executive Summary is derived. Copyright c 2022 Robert McHugh |
