Professor’s Comments April 16, 2019
Posted by OMS at April 16th, 2019
The markets pulled back slightly yesterday on relatively low volume after gaining 269 points on Friday. Low volume pullbacks after a large rally are generally positive for the next few days. The Dow finished down 28 points, closing at 26,385. The NASDAQ and SPX were down 8 and 2 points, respectively. Volume on the NYSE was moderate, coming in at 90 percent of its 10-day moving average. There were 130 new highs and 24 new lows.
The markets will be closed on Friday for Good Friday. I mention this today, because IF the markets continue to rally into Friday, we’ll need to be on our toes going into the weekend. The pattern, a large Ending Diagonal for Wave 5 up, suggests it could be nearing completion and we might want to make a few defensive changes IF the Dow begins to approach the 27,000 level.
At this point, the Dow appears to be the strongest market. The Russell 2K, NASDAQ, and SPX are beginning to weaken as I’m now seeing large negative divergences in the Breadth and Money Flow indicators on these markets. Also, the period immediately after the Easter Holiday is generally not a good time to be fully invested in the markets. So, IF the markets rally into Friday as I expect, I might begin to take a few bucks off the table. This is simply an odds play.
As I mentioned in this weekend’s WSR, because of the Ending Diagonal Pattern, the Dow’s rise toward 27,000 will not be straight up. And the next pullback within the pattern could be significant. It could either be a corrective pullback within the pattern or it could mark the end of Wave 5 up. Here’s the deal: As the Dow starts to approach to the 27,000 level, the odds for higher prices begin to diminish rapidly. Yes, there’s chance that the Dow could push beyond the 27,000 level and approach 27,500, but once above 27,000, I believe the odds for higher prices are only 50-50 at best. I don’t like to keep a lot of money at risk when the odds are only 50-50. I’d much rather pay the 5 bucks and move to the sidelines.
This is why students should pay attention any negative changes to the market timing signals on the cockpit and the other indicators, like the Signal Ratio and Tide, as we move closer to the weekend.
There were NO CHANGES to the market timing indicators after yesterday’s session. The Dow, NASDAQ, SPX, and Russell 2K remain on Buy Signals.
The Dean’s List and The Tide also remain positive.
The Sector Ratio stayed at 24-0 positive after yesterday’s session. The Strong List was led by Real Estate, Semiconductors, Technology, Transportation and Cap Goods. There were NO weak sectors. As I’ve been saying, the fact that the Sector Ratio remains so strong supports the Bullish case for higher prices.
Model Portfolio: There were NO Changes to the Model Portfolio after yesterday’s session. The Model continues to hold a full position in DDM (538 shares), a full position (370 shares) in UWM, the positive ETF for the Russell 2K, and a half position (635 shares) in UCO, the ETF for Crude Oil. The remainder of the theoretical $100,000 Model Portfolio remains in cash ($36,861).
The Model still does not hold a position in gold as it continues to wait for the timing indicators to generate a Buy Signal. Be patient. BTW, gold is currently trading just shy of 1300. The chart for gold (the metal) looks to be in a corrective wave ‘c’ down of Wave 2 down. If this is the case, gold could decline to the 1260 to 1270 level. The Model portfolio is not looking to short gold from current levels because shorting the final wave down of a corrective move down is a low odds play. The Model continues to wait for a positive signal change that would likely mean that impulsive Wave 3 up is starting.
The Model Portfolio is being shown for educational purposed only. The Buy/Sell actions in the Model Portfolio are made based on technical indicators that can and do change frequently and should NOT be considered as recommendations for trading an actual portfolio. Any gain or loss in the Model Portfolio should not be used to predict future performance of the Model.
That’s what I’m doing,
h
Market Signals for
04-16-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 01 Apr 2019 |
NASDAQ | POS | 13 Mar 2019 |
GOLD | NEU | 09 Apr 2019 |
U.S. DOLLAR | NEG | 11 Apr 2019 |
BONDS | NEU | 01 Apr 2019 |
CRUDE OIL | POS | 26 Mar 2019 |
One hour video recorded from May 28, 2016 The Professor’s Signs of a Major Market Turn – Prospectives and the Projected Timing and Levels One hour streaming video – includes webinar handouts The Professor usually holds an update class whenever the Market looks like it may be making a major turn. If you have been following the Professor’s Comments you know that a turn is due….. LEARN MORE
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
All of the commentary expressed in this site and any attachments are opinions of the author, subject to change, and provided for educational purposes only. Nothing in this commentary or any attachments should be considered as trading advice. Trading any financial instrument is RISKY and may result in loss of capital including loss of principal. Past performance is not indicative of future results. Always understand the RISK before you trade.
Category: Professor's Comments