9-22-19 Market Commentary

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S2P Market PnF Breadth Summary


Market Breadth: With this past week’s market fractional decline, our Bull/Bear Point and Figure Ratio at 1.31, fell from 1.47 last week. The total count of securities in bullish or bearish patterns decreased 1% to 3024. The count of bearish stocks increased 6%, while the count of stocks in bullish patterns decreased 6%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market now two weeks in bullish territory. Paid subscribers have access to the OpenOffice Calc data from which the chart is generated.

NASDAQ McClellan Summation Index (weekly)

The well known market breadth indicator, the NASDAQ McClellan Summation Index (NASI) rose 136 points for the tenth advance in fifteen weeks. At a positive 227.65 points, it has risen above the July 2019 top, and continues below the remaining six tops above +100, and it continues above the six bottoms below -100 in the last 30 months.

NASDAQ Volume Analysis (2 weeks)

Volume Analysis: In this week’s volume analysis, the NASDAQ Composite Index ended in neither Distribution mode with average daily lower than the prior week. In the last two weeks the NASDAQ had no (0) Accumulation days and four (4) Distribution days. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days occur when the index closes down on volume higher than the prior market day.) Last week, the NASDAQ ended in neither Accumulation nor Distribution mode on higher average daily volume.

CCI(20) – daily

Momentum: The CCI(20) daily, now in a Woodie’s up trend at +54.49, is down from +130.75 last week.

In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The Weekly CCI(20) of the NASDAQ Composite Index began a Woodie’s up trend twenty-seven weeks ago, while the Daily CCI(20) began a Woodie’s up trend two weeks ago.


CCI(20) – weekly

The CCI(20) weekly in a Woodie’s up trend at +80.18, rose slightly from +79.43 last week. At Friday 8/30 close, it formed a valid ZLR (Zero Line Reject) Long entry signal, continuing upwards this week. We will continue following this trade simulation in next week’s commentary.

Market Summary Carpet (2 weeks)

Industry Rotation the last two weeks: All of the top five industries are positive, and all of the bottom five are negative. Summary: Oil, Brokers, and Gold & Silver on the top; S&P Retail and some tech on the bottom. Bullish: REITs has left the bottom five. Oil Services PHLX has left the top five. Brokers has re-entered the top five Bearish: Computer Hardware, Disk Drives, and Semis PHLX have entered the bottom five. KBW Bank has left the top five. Gold & Silver PHLX has left the bottom five and entered the top five.

Focus this week: From www.economicprism.comFiat Money Cannibalization in America.“ The following are some key points.

  • The Federal Reserve cut the federal funds rate 25 basis points, thus furthering its program of mass money debasement.  Yet, on the surface, all still remained in the superlative.
  • Below the surface, however, the overnight funding market was subject to much weeping and gnashing of teeth.  Sometime between Monday night and Tuesday morning the overnight repurchase agreement (repo) rate hit 10 percent.  Short-term liquidity markets essentially broke.
  • After several technical glitches, the Fed executed its first repo operation in a decade – $53 billion – to keep the interbank funding market flowing.  Zero Hedge documented the chaos real time.  This was followed up with additional repo operations on Wednesday and Thursday – at $75 billion a pop, and both oversubscribed.  Perhaps Fed repo operations will be a daily occurrence, at least until the Fed launches QE4.
  • …the Fed’s primary tool for price fixing credit markets is not behaving according to plan. 
  • …the Fed must intervene with even greater price controls to arbiter them.  This, in turn, compounds the mistakes; layering and levering them up to the extreme.
  • First, the central planners are winging it.  Second, there’s no happy end to this madness.  Third, there will be hell to pay…and you’ll get to pay for it…
  • The greater populace has come to believe they can get something for nothing – including free food, free drugs, free retirement, and free money – via the ‘power of the purse’.  They believe the government can spend without limits and indefinitely kick the debt can down the road.  They believe there will be no consequences for this complete failure of discretion.
  • Voters couldn’t be more wrong. 
  • Failure of the debt based fiat money system is at stake.  The Fed will do everything they can to keep it alive.  They’ll keep at it, debasing the dollar around the clock, until the precise moment it cannibalizes itself.
  • Holding some gold – or silver – at this juncture is of supreme importance.

–Donald Pirl s2pMarketSignal@protonmail.com