Professor’s Comments April 18, 2019
Posted by OMS at April 18th, 2019
The markets were mostly flat to lower yesterday. The Dow closed down 4 points at 26,450. The NASDAQ and SPX were down 4 and 7 points, respectively. Volume on the NYSE was high, coming in at 113 percent of its 10-day moving average. There were 82 new highs and 30 new lows. Students should note that the number of new highs is beginning to decrease while the number of new lows is increasing.
Tuesday’s small change signal from the A-D oscillator is still on the board, so we need to be on the lookout for a Big Move either today or next Monday.
As I mentioned yesterday, it’s starting to look like the markets are approaching some type of short-term top. The large Ending Diagonal Pattern on the Dow could truncate and terminate at any time. It does NOT have to reach its target near the 27,000 level.
With the markets closed tomorrow for Good Friday, I believe we need to take some defensive action early today. While the market timing signals on the cockpit remain positive, they are just barely positive for the NASDAQ, SPX, and Russell 2K. The DMI for IWM turned negative after yesterday’s trading and almost any move down early today will cause the VTI-portion of my VTI-volume indicator to turn negative. If this happens, I will sell shares of IWM and DDM in the Model.
I continue to see negative divergences between index prices and my breadth and money flow indicators. These negative divergences usually appear when a top of major significance is approaching.
There were NO CHANGES to the market timing indicators after yesterday’s session. However, the Buy Signals for the Dow, NASDAQ, SPX, and Russell 2K are not that strong and could turn negative if the market falls today.
The Tide has turned negative. The Dean’s List remains positive.
Like I’ve been saying for the past few days, the odds for higher prices are starting to diminish. I don’t like to keep a lot of money at risk with even odds. I’d much rather pay the 5 bucks and move to the sidelines. With the indicators beginning to weaken, I want to go into the long weekend with less money at risk and see what happens early next week.
The Sector Ratio fell to 21-3 positive after yesterday’s session. The Strong List was still led by Real Estate, Semiconductors, Technology, Cap Goods and Leisure. The Food Drug Sector joined Healthcare and PharmaBio on the Weak List. There are still 12 sectors on the Strong List with RS ratings of 1 or zero. With low RS ratings, these 12 sectors can easily fall off the Strong List IF the market has one or two strong down days. In other words, one or two down days could easily change the current positive market conditions and make them negative.
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).
GLD fell another 0.23 cents yesterday to 120.28. The current pattern for GLD suggests the ETF is in the process of completing wave ‘c’ down of Wave 2 down. Once Wave 2 down completes, GLD should begin to rally hard has Wave 3 up unfolds. The Model still does not hold a position in gold as the metal remains on a Sell Signal. Be patient.
The market timing signal for crude oil turned NEUTRAL after yesterday’s session as the volume portion of the indicator turned negative. UCO, the ETF I use to trade crude oil, has’ jumped the ropes’ and is currently trading above its 200 day moving average and continues to pull the 50 up toward the 200. As long as the ETF stays above the 200 and the indicators remain positive, the 50 should continue to move up. If the 50 continues to rise, it will cross above the 200, putting UCO in an Up Trend. No changes for now.
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
04-18-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | NEG |
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 | NEU | 17 Apr 2019 |
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Category: Professor's Comments