Analysis+Still holding 3 YM contracts for+ 250 pts.Protective stop is now @ 13070.
The Fed is soon going to have to lower interest rates, a likely emergency move between meetings, to undo their boneheaded decision to leave rates unchanged last week.
Our other Blue Chip indicator, the NYSE 10 day average Advance/Decline Line Indicator worsened to negative -480.0, remaining on a "sell" signal from July 18th. The continued large negative reading in this indicator is arguing that rallies should be bought cautiously, that there is underlying weakness in the breadth of the market that is dangerous.
We need to take note that the PPT Intervention Indicator has now dropped below the positive + 20.00 threshold where rallies often occur, and is now in the range where declines often occur. Our take on the recent series of readings well above positive + 20.00 is that the PPT did in fact take advantage of the huge short-interest to force several short covering rallies that actually stopped crashes, during days where so much supply hit the markets that all the short-covering rallies could do was minimize the declines rather than push prices higher, as was the case during the Intermediate Wave 1, five year rally.
The Plunge Protection Team Intervention Risk Indicator has moved to a "neutral" reading, an area conducive to declines. Rallies often occur when this measure is above positive + 20.00 or below negative -16.00. Tuesday's + 18.14 reading is now below the positive + 20.00 threshold. The DJIA Call/Put Ratio fell to 0.85, remaining on a "neutral" signal from July 26th (moving below 1.00 and above 1.40 is neutral, while rising decisively above 1.00 (above 1.10 triggers a new "buy"). The Secondary Trend Indicator fell 6 points to negative -13, remaining in neutral territory. A rise above + 30 would trigger an intermediate term "buy." A drop below negative -30.00 would trigger an intermediate term "sell."
The NASDAQ 100 plunged 33.09 points Tuesday to close at 1,901.32. Volume was light at 77 percent of its 10 day average, with downside volume at 87 percent, with declining issues at 85 percent, with downside points leading at a selling panic 93 percent. NDX Demand Power fell 5 points to 404, with Supply Pressure rising 5 points to 435, telling us the decline was solid with decent supply hitting the market. The DP/SP indicator remains on an enter short positions signal Tuesday from July 26th, as the SP measure rose 10 points above the DP measure. Our key trend-finder indicators triggered a new "sell" signal Tuesday. The NDX 14 day Stochastic Fast fell to 26.00, decisively below the Slow at 41.80, triggering a new "sell" signal Tuesday. The NDX Purchasing P! ower Indicator fell 6 points to 133.50, a new low for the decline, remaining on a "sell" signal from August 9th, needing to rise above 139.50 for a new "buy." The NDX 10 day average Advance/Decline Line Indicator worsened to negative -2.8, remaining on a "sell" signal from July 26th, needing to rise above positive + 5.0 for a new "buy."
The Russell 2000 got crushed for 16.94 points, closing at 762.87. Volume was lower at 60 percent of its 10 day average, with downside volume leading at 80 percent, with declining issues leading at 82 percent. The RUT Purchasing Power Indicator fell 6 points to 63.34, another new low for the decline, remaining on a "sell" signal from August 9th. It would have to rise above 69.34 for a new "buy." The RUT 10 day average Advance/Decline Line Indicator worsened to negative -143.50, remaining on a "sell" signal from June 25th, needing to rise above positive + 80.0 for a new "buy."
