Professor’s Comments 9/13/19

Posted by OMS  at September 13th, 2019

The markets fell early yesterday, then rallied into the close. The rally was enough to move the CCI on the Dow into the trend mode.  Seeing this, the Model exited its shares of DXD and moved to the sidelines.

Given the overall pattern and the fact that the indicators have turned bullish, it’s likely the markets will make one more final push higher in the days ahead to complete Wave 2 up before heading down.  However, now that the CCI has entered the trend mode, there are now two short-term Bullish scenarios on the Board.  The first, which is the Wave 2 scenario, suggests the Dow will top within the next week or so under July high of 27,399.  This remains my primary scenario.  But because the Dow is now trending, I can no longer ignore the alternate scenario I discussed yesterday that suggests it could trade up to the 27,600 -27,800 level.  If this happens, it would mean that Wave D up did not complete at the July high, and was only wave A up of an A-B-C move for Wave D up.

If the July high is exceeded, it would be mean the five-wave decline and ‘Rope Jump’ from 16 July was NOT Wave 1 down.  It would also mean that the clear 3-3-5 zig-zag ongoing rally since 18 August is NOT Wave 2 up.  This would be highly irregular.  So, the odds still favor the Wave 2 scenario.  But the fact that the Dow has now entered the trend mode is also something highly irregular for a retracement Wave 2.  So, with positive indicators and conflicting patterns, I’m moving to the sidelines.  In either case, whether the Dow stays below or exceeds the 27,399 level, the next major move for the Dow should be down to the 24,000 level or below.  The only difference is that IF 27,399 is exceeded, the current rally will take a few weeks longer to complete. Otherwise, once the Dow approaches 27,399, it should begin to pull back.  If this happens, the Model will look to re-establish trial positions in inverse ETFs.

Yesterday’s rally caused the market timing indicator on the NASDSAQ to turn Positive.  So now all the major indexes are on Buy Signals.

The Tide and Dean’s List are Positive.

The Sector Ratio improved to 22-2 Positive after yesterday’s session. The Strong Sector List was led by Service, Semiconductors, Consumer Products, Healthcare, and FoodDrug. The two Weak Sectors were Leisure and Real Estate.

Gold moved slightly higher yesterday with GLD gaining 0.29 cents to 141.32.  If the equity markets continue to rally, it’s likely that interest in gold will fade. I still view the 137 level in GLD as a reasonable target for its Wave 4 pullback.  Once this pullback completes, gold (the metal) should rally to the 1,600 to 1,650 level as Wave 5 of Major Wave 3 up unfolds.  The Model continues to wait for a signal change before buying gold again.

The Model is now 100 percent in cash ($125,927) after yesterday’s session.

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,

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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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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.