U.S. Stock Market - Topping Process Nearly Complete, But Not Quite Yet

“Preliminary” monthly chart sell-signals were triggered in my proprietary computer system at today’s close in the Nasdaq Composite Index, the Nasdaq-100 Index, and the NY Composite Index. By definition, monthly chart signals are extremely rare. How rare? Please review the two charts immediately below this column. The last monthly chart sell signals in the Nasdaq Composite Index and the NY Composite Index were triggered at the end of July 2007. The last monthly chart buy signals in both these indexes were triggered at the end of March 2009. Prior to today, there have been just two monthly chart signals (one buy and one sell) in each of these charts over the last 5 ½ years. The track record for the monthly chart signals in my computer system is nothing short of spectacular!

Unfortunately, there is a catch. Please note the word “preliminary” at the beginning of the first paragraph. Today is April 18^th, but the end of the month is April 30^th. If today was April 30^th, with no changes in either of these charts, then both monthly chart sell signals would become “Official”. However, as the programmer of this system, I happen to know that if stock prices recover from today’s NYSE close by the end of the month, then these sell signals would abort (which means no RED DOT). In other words, monthly chart signals can be triggered intra-month, but they only become official at the end of the month. Weekly chart signals can be triggered intra-week, but they only become official at the end of the week. Daily chart signals become official immediately at the end of any signal day. It’s not a perfect system, but it’s pretty damn good, and if used properly can be a wonderful trading resource.

Here are today’s closing marks, with changes from Wednesday’s close:

                                                                                    Thursday’s Closing Prices                 

Dow Jones Industrial Average                        14,537.14        -81.45              -0.56%

S&P 500 Index                                                  1,541.61        -10.40              -0.67%

NASDAQ Composite Index                               3,166.36        -38.31              -1.20%

Russell 2000 Index                                                 90.51        -  5.29              -0.58%

Dow Jones Transportation Average                  5,944.16        -  5.24              -0.09%

Bottom Line: In the U.S. stock market, futures are nicely higher at the time this column is being written (10:34 PM ET). Despite today’s broad based decline, computer-generated daily chart buy signals were triggered in ARO, AA, BHI, BP, CHK, GLW, GTI, and QCOR, so I am guessing that we will see a fairly strong rebound in the broad market averages tomorrow morning (at least). The Alcoa (AA) buy signal today is especially interesting to me right now because I think it’s the first clue that the long decline in the industrial commodity-related stocks might finally be over. While I am already long too many  precious metals mining shares, I am thinking about doing some bottom-fishing in the hardest hit stocks in the coal and iron-ore mining sectors. Natural gas exploration stocks are starting to see some decent bids, but I think there are better buy-side opportunities. And what about Apple? Despite my great respect for this company, I have been fortunate so far in NOT picking a bottom here, but I think we are very close to a major rebound in this one.

Gold/Silver Mining Shares - Value Stocks or Liquidation Candidates?

For anyone holding Gold/Silver mining shares, today was probably almost as painful as Monday (4/15). The following closing 4:00 PM ET NYSE prices tell the story:

Here are today’s closing marks in selected major Gold/Silver issues, with changes from Tuesday’s close:

                                                                                    Wednesday’s Closing Prices              

GLD ETF                                                          132.87            +0.07               +0.05%

SLV ETF                                                           22.44              -0.22                -0.50%

Newmont Mining (NEM)                                    32.36             -1.42                -4.20%

Barrick Gold (ABX)                                           17.65             -1.21                -6.42%

Coeur D’alene Mines Corp (CDE)                     13.52             -1.46                 -9.75%

First Majestic Silver Corp (AG)                          10.97             -0.93                -7.82%

And here are the latest available physical Gold/Silver coin sales data from the U.S. Mint, as updated today 4/17:

2013 April sales of Gold coins (Month-to-date thru April 17^th)                              147,000 oz.

2012 April sales of Gold coins (entire month of April 2012)                                    20,000 oz.

2013 April sales of Silver coins (Month-to-date thru April 17^th)                          2,387,000 oz

2012 April sales of Silver coins (entire month April 2012)                                  1,520,000 oz.

If this information doesn’t look right to you, please check it out for yourself at:

http://www.usmint.gov/mint_programs/american_eagles/?action=sales&year=2013

Connecting America through Coins

Bottom Line: Investor purchases of gold and silver coins from the U.S. Mint have skyrocketed. April 2013 sales of gold coins (in total ounces) so far in just ½ month have totaled more than all of 2013 February and March combined. April 2013 gold coin sales (in total ounces) in just ½ a month are more than 7 times the amount sold in all of April of last year. While silver coin sales comparisons are less spectacular than gold coin sales comparisons, they are still incredible none-the-less. However, despite this undeniable feeding frenzy in the physical precious metals, we are still witnessing a massive selling capitulation in precious metals mining shares that has to be at or near record proportions. Earlier tonight, Gold/Silver prices in Singapore were sharply lower again around 9:00 PM ET, but I would not be surprised to see a major V-shaped bottom in this market beginning tomorrow. In the interest of full disclosure, I am long the following stocks: AG, EXK, GG, and GDXJ.