With the stock market surging and gold and oil also rallying, here is a look at what Ralph Acampora had to say as well as a look at the hammer, capitulation, and is it a Dow Theory sell signal or not?
Ralph Acampora & The Hammer
December 12 (King World News) – Below is today’s note from Jeffrey Saut, Chief Investment Strategist at Raymond James: Yesterday, someone sent us this tweet from stock market guru Ralph Acampora that read, “Monday’s intraday activity and its closes on the leading market indexes were impressive: it’s called a ‘key reversal-day’ on a bar chart and a ‘hammer’ pattern on a candlestick chart. They suggest that an important near-term low was made.” Now, for non- technical folks, a hammer formation in the candlestick charts is defined as follows:
“A hammer is a type of bullish reversal candlestick pattern, made up of just one candle, found in price charts of financial assets. The candle looks like a hammer, as it has a long lower wick and a short body at the top of the candlestick with little or no upper wick (see chart below).”
Ralph Block & The McClellan Oscillator
Also suggestive that a bottom was made on Monday was what our deceased friend Ralph Block used to term a multi-swinging session. To wit, “Ralph was a huge fan of a crater opening, multi-swinging session that ends near the high of the day. Looks like it was just what he would have wanted!” We would add that the McClellan Oscillator is pretty oversold on a short-term basis (see chart below).
McClellan Oscillator Is Very Oversold Short-Term
Likewise, the Russell 2000 is some 10% below its 200-day moving average and, therefore, oversold (see chart below).
Russell 2000 10% Below It’s 200-Day Moving Average
And, don’t look now, but the energy complex is very oversold (also has a hammer chart formation – see chart below) with the anecdotal evidence that a bottom is near with three large energy-centric hedge funds closing their doors.
Energy Complex Also Very Oversold
About A Dow Theory “Sell Signal”
As for the questions about a Dow Theory “sell signal” that are being trumpeted by some on the Street of Dreams, by our method of interpreting Dow Theory, there has been no “sell signal.” The problem is these folks are using the November closing low for the Industrials, which is the wrong reaction closing low to use. While it is true the D-J Transports notched a new reaction low last Friday, the D-J Industrials have not violated their March 2018 closing low (the right closing low to use). As such, what we have, according to Dow Theory by our method of interpretation, is a downside non-confirmation, which should be interpreted bullishly…
KWN receives so many emails from its global readers and listeners about which high-quality mining companies they should invest in, and as a result we have added another remarkable company to the list. This is one of the greatest gold opportunities in U.S. history and you can take a look at this remarkable company and listen to the just-released fantastic interview with the man who runs it by CLICKING HERE OR BELOW
Regarding The “Persistent Selling”
As for all of the questions about the “persistent selling” we are experiencing, it is due to the algos, tax loss selling, and hedge fund liquidation. Recall that many hedge funds only give their investors one time a year to pull their money from said funds. Those letters from the hedge funds tend to go out on November 15 with a “window” to pull your investment funds extending into December 31. Clearly, the hedge funds have had a really difficult year in 2018, and it is not being helped in the typically ebullient month of December. Remember, “If Santa fails to call, the bears will roam on Broad and Wall.”
And then there was this from the sagacious Jason Goepfert of SentimenTrader fame, “It’s not just Financials, Energy stocks have been faltering, too, with more than 40% at a new low. And fewer than 5% of them are above their 10-, 50-, and 200-day moving averages. There have been 23 days since 1990 when selling was this widespread.” If that sounds like capitulation, it should! So, unless we are into another “selling stampede” (this would be session six in what typically is a 17–25 session stampede), there should be a near-term bottom at hand.
Trump, China And The Huawei CFO Arrest
Yesterday, NYSE breadth diverged negatively after the NYSE opening. Apparently traders and algos bought the incessantly recurring US-China trade deal hype, but large institutions did not. On a positive note, President Trump says he would intervene in the U.S. case against Huawei’s CFO if it would secure national security interests, or help close a trade deal, with China. As Sophocles said, “Not knowing anything is the sweetest life.” This morning, the preopening futures are sharply higher on the president’s statement that he would intervene in the Huawei CFO incident if it will help with a Chinese trade deal.
For those who missed it…
Eric King: “Brett, your company just released remarkable news.”
One Of The Fastest Growing Royalty Companies In The World
CEO, Brett Heath: “Metalla is pleased to add another producing royalty on a high-grade deposit with proven operator Pan American Silver. This acquisition consolidates royalties on two separate properties (COSE and previously acquired Joaquin) that represents all of the future growth at Pan American Silver’s Manantial Espejo mine complex. The royalty complements our existing portfolio, will increase our cash flow, and will further enhance our strong growth profile. This is consistent with our long-stated strategy of acquiring existing royalties on quality assets with tier-one operators.” Metalla Royalty is one of the few companies in the world that is in the mining sector and trading near a 52 week high. Metalla Royalty & Streaming, symbol MTA in Canada and MTAFF in the US. For those who would like more information please contact Kristina Pillon in Investor Relations by calling 604-908-1695 or emailing [email protected]
KWN has now released the powerful and timely audio interview with Andrew Maguire and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
ALSO RELEASED: It’s Not Just Buy The Dip That Is Dead, Buy The Rally Is Now Dead, Too CLICK HERE TO READ.
***KWN has now released the remarkable audio interview with Art Cashin discussing everything from today’s violent trading, to the possibility of a new ice age, what to expect in the gold market and much more and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
© 2018 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the articles is permitted and encouraged.