Professor’s Comments January 31, 2017
Posted by OMS at January 31st, 2017
The Dow fell 123 points, closing at 19,971. The NASDAQ fell 47points to 5,5614. It was the biggest one day decline since the Election Day rally started. Volume on the NYSE was moderate, coming in at 103 percent of its 10-day average. There were 44 new highs and 28 new lows.
Yesterday’s decline caused several of the cockpit indicators to turn negative. The DMI on the Dow and The Tide were of concern. That’s because whenever these particular indicators turn negative, they can potentially trigger one or more of the trading strategies I discussed this past weekend.
When I saw the DMI on the Dow turn negative, I ran The Professor algorithm. He only had 19 shorts, so as of now, he’s NOT confirming the negative DMI turn. I need to have 25-30 or more shorts to confirm the turn.
Same for The Tide. When the Tide turns negative, I start looking for inverse index ETFs on the Dean’s List. Right now, the only inverse index ETFs on the List are RWM and TWM, the two inverse ETFs for the Russell 2K. But as of last night, only 2 of the 3 PT indicators on those ETFs are positive. The MACD is still negative.
Also, the two Money Flow indicators on the cockpit are still positive. So, I still don’t have a confirmed Sell Signal for the overall market.
The VTI on the Dow also turned negative after yesterday’s decline, but it’s still showing a reading of 76.9. As long as it stays above 70, it remains in the Trend Mode and another run to the upside is possible.
Yesterday’s Sector Report was little changed. The report showed 15 strong and 9 weak sectors. The Semiconductors, Transports, and Banks continue to lead, with Retail, PharmaBio, and Service lagging. I was surprised that no sector produced a large change in Trend Score. This is something I always check when I’m looking for stocks or sectors to day trade.
Bottom Line: The markets appear to be in the process of turning, but right now, the signals are still mixed. Be patient.
Gold remains on a Buy Signal. However short-term, the metal still appears to be working on corrective wave 2 within a wave 3 up. GLD rose 0.48 cents to 113.57. But the rise was not enough to turn its VTI back to positive, so it still has work to do. BTW, the VTI on GLD remains above 50 (62.3) so it has a positive bias. If the VTI changes direction in the next day or so, it could easily move above 70 and re-enter the Trend Mode. This would confirm that the impulse wave in gold, wave 3 of 3 up, is starting.
Looking for buying opportunities in the metals. The mining stock I’m focusing on now is Coeur D Alene Mines (CDE). Yesterday its VTI turned up with the stock already in the Trend Mode. The thing I like about CDE is that its 50 stayed above the 200 while the stock corrected from August to December. And now, at 11.39, CDE doesn’t have to deal with the consolidation period after a ‘Rope Jump’, like most other mining stocks. It’s already in an Uptrend.
I mentioned CDE’s uptrend when I talked about how I like to add shares when stocks are in Uptrends and the 2-period RSI becomes oversold. Students should look at how the 2-period RSI identified a buying opportunity for CDE on 26 January. This is what ‘Rifle Trading’ is all about.
That’s what I’m doing,
h
Market Signals for
01-31-2017
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | NEG |
SUM IND | NEG |
VTI | NEG |
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
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Category: Professor's Comments