Professor’s Comments February 21, 2019
Posted by OMS at February 21st, 2019
The markets were slightly higher again yesterday. The Dow rose 63 points, closing at 25,954. The NASDAQ and SPX were up 2 and 5 points, respectively. Volume on the NYSE was moderate, coming in at 103 percent of its 10-day moving average. There were 100 new highs and 7 new lows.
The Fed released the minutes of its January Meeting yesterday. The minutes stated the Fed would use a “patient” approach to raising interest rates as it continues to weigh various headwinds to growth. Apparently, the market liked this dovish Fed wording as it rallied after the minutes were released.
There were no changes to my market timing signals for equities. All major equity indexes remain on Buy Signals.
There was another small change in the A-D oscillator last night, so we need to be on the lookout for a Big Move within the next 1-2 days.
The Tide and Dean’s List remain positive.
While most of my indicators remain positive, the market continues to show signs the current ‘rocket ship’ rally is tiring. I continue to see negative divergences in several of my key volume indicators. Yesterday the A-D oscillator declined even though the Dow finished higher. The decline in the A-D oscillator only tells me that fewer and fewer stocks are participating in the rally. This does not mean the overall market can’t continue to push higher. It can. This is the reason I continue to watch for a change in the market timing indicators on the cockpit..
The Sector Ratio decreased from 23-1 positive to 21-3 positive after yesterday’s session. The Strong List was led by Household Products, Semiconductors, Technology, Banks, and Cap Goods. The three Weak Sectors were Food, Autos, and Food Drugs.
After reaching a high of 127.21, GLD pulled back to close at 126.48, down 0.22 cents. The short-term pattern suggests gold is approaching a short-term top. This minor top is likely sub-wave 1 up of Wave 3 up. Once sub-wave 1 completes, GLD should begin a small pullback for sub-wave 2 down. Then once this pullback completes, a significant wave 3 of Wave 3 rally should begin. As long as my market timing indicator remains positive, I continue to look for opportunities to buy gold on pullbacks. Gold remains on a Buy Signal.
Crude Oil (UCO) rose another 0.45 cents yesterday, closing at 19.81. The indicators on UCO continue to show strength which should enable the ETF to test its 200-day moving average now located at 23.31. Crude Oil (UCO) remains on a Buy Signal.
BTW, at the close of yesterday’s session, my hypothetical ‘Test Model’ which is based on my VTI-volume indicator, is now up 21 percent since the beginning of the year. I continue to monitor the performance of the Test Model and will start trading an actual Model Portfolio on the next major signal change. Students should understand that while the results of the hypothetical Test Model have exceeded my expectations, similar results should NOT be expected in the future as the model is currently being driven by a very powerful rally.
That’s what I’m doing,
h
Market Signals for
02-21-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | SM CHG |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 15 Feb 2019 |
NASDAQ | POS | 07 Jan 2019 |
GOLD | POS | 25 Jan 2019 |
U.S. DOLLAR | NEU | 19 Feb 2019 |
BONDS | POS | 15 Feb 2019 |
CRUDE OIL | POS | 13 Feb 2019 |
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Category: Professor's Comments