Professor’s Comments April 1, 2015
Posted by OMS at April 1st, 2015
The day after the Dow rallied for 264 points, it fell 200 points to close at 17,776. Volume was moderate, coming in at 93 percent of its 10-day average. There were 120 new highs and 33 new lows.
There is a possibility that yesterday’s decline was part or all of wave ‘b’ of the a-b-c pattern for retracement wave 2. If this wave count is correct, then wave ‘c’ up should develop within the next day or so, taking the Dow back up to the 18,000+ level. Then once wave 2 up completes, the Dow should start its impulse wave down.
This is an alternate possibility that wave 2 up has already completed and that wave 3 of 3 down is underway. But right now, I do not believe this is the case.
One of the reasons I do not believe that wave 3 of 3 down is underway is because of the Professor algorithm. When I ran the algorithm last night, it only highlighted 10 shorts. This tells me that the Professor does NOT see a new downtrend starting.
Same for The Tide; it’s only neutral. The only breadth indicator that is negative now is the Hi-Lo indicator. The Up-Down oscillator, Summation Index, and A-D oscillator are all still positive. As long as these three breadth indicators remain positive, it’s hard for me to say that a new downtrend is starting.
Bottom Line: It appears that the pattern that has developed during the past two days needs another rally wave to complete the wave 2 pattern. If this rally wave develops in the next few days, I will look to short the market from higher levels.
That’s what I’m doing,
h
Market Signals for 04-01-2015 |
|
---|---|
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
COACH (DIA) | NEG |
COACH (QQQ) | NEG |
A/D OSC | |
DEANs LIST | NEG |
THE TIDE | NEU |
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