Professor’s Comments June 2, 2015
Posted by OMS at June 2nd, 2015
The Dow rose 30 points, closing at 18.040. Volume was moderate, coming in at 99 percent of its 10-day average. There were 70 new highs and 67 new lows.
Not much changed with yesterday’s trading. The market remain on Sell Signals in what appears to be a topping pattern. However the market has NOT started a new downtrend yet and until it does, it could continue to chop slightly higher.
Last night, when I ran my algorithms and looked at the results, it was pretty evident what was happening. The Professor only had a handful of longs and shorts. He’s been doing the same thing for weeks.
Same for Emeritus, the trend algorithm that highlights stocks for the Honor Roll.
Both of these algorithms continue to tell me that no trend is developing. And it’s hard to make money in a market without a trend.
You can see this for yourself by looking a the CCI on the Dow. Last night it had a slightly negative reading of -25.28. For a new downtrend to start, it needs to move below –100. If it does, that’s when the Dow will start breaking below 17,800 telling me that the first down wave of the next Bear Market is underway.
Until this happens, it’s likely that the market will continue to chop around, pushing higher one day and pulling back the next. It’s why I’m just scalp trading now, shorting stocks in the morning and getting out of them by the end of the day. It’s not a strategy that I like to use, but until this market starts to gather downside momentum, it pays the bills.
I continue to watch for TBT to drop off the Dean’s List and for TMF to appear. Events in Greece are coming to a head, and even though some type of deal might be worked out to keep Greece in the fold, it will likely cause European Bond investors to become concerned again about a possible default. Right now, the Money Flow on TMF is still negative, so I’m still just watching Bonds. However IF the Money Flow indicator turns positive, I will be looking at TMF on the 15s for a potential ‘trial’ Buy. Then if it hits the List, and the PT indicators turn positive, I’ll buy more.
Same for the metals. The Money Flow indicator on GDX is still negative. The ETF continues to pullback and consolidate after its ‘Rope Jump’ on 14 May. This is exactly what I wanted to see. For now, I will continue to watch GDX as it forms its ‘Blade’. However IF the PT indicators turn positive and the Money Flow supports the move, I’m a buyer.
Again, it’s still early, but I’m expecting gold to move significantly higher later this year. And right now, the pattern that is developing is telling me that everything is right on track. BTW, the summer months are usually a very good time to be trading gold. Take a look at the daily chart of GDX for the past few years and you will see what I mean. A nice summer rally has occurred every year since 2009, even when gold has been in a down trend for the past 2 years. It’s one of the reasons I’m starting to pay a lot of attention to gold now.
Watch for gold stocks and ETFs to start appearing on the Dean’s List.
That’s what I’m doing,
h
Market Signals for 06-02-2015 |
|
---|---|
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
COACH (DIA) | NEG |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | NEG |
SUM IND | NEG |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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Category: Professor's Comments