Professor’s Comments April 15, 2021
Posted by OMS at April 15th, 2021
The Dow rallied as expected yesterday, gaining over 230 points before pulling back to close 53 points higher at 33,730. The rally was the Big Move predicted by the small change signal from the A-D Oscillator. It also appeared to be part or all of wave 5 of final wave 5 up. In Tuesday’s brief Update, I mentioned the Dow could get as high as 33,978. Yesterday’s rally reached a high of 33,978, so, we’re getting close.
During yesterday’s rally, the percent of Investment Advisors hit 70.4 which is the highest level since January when the Dow put in its wave 3 top. At 70.4, which is an EXTREME level, it means that the Investment Advisors are all in. The market usually begins to pull back when these levels are reached. We’ll see if it happens this time.
Yesterday also was the third straight day of increasing volume. Last week I talked about how the volume was decreasing as the market continued to rise. Now the volume is starting to increase. The rise in volume is something that should be watched, especially since the wave pattern suggests a top is near. This is exactly what a technician would expect to see as the market begins to roll over. BTW, both volume and volatility should begin to expand, so watch the Volatility Index too. Yesterday the VXI closed at 16.99 after reaching a low of 15.38.
The Market Timing Indicators on the Dow and NASDAQ remain Positive. The Scalp Trading Indicators on the DIA and NASDAQ-100 (QQQ) remain Positive.
The Dean’s List has turned Neutral while The Tide remains Neutral. The appearance of RWM, the inverse ETF for the Russell 2K is the reason Dean’s List is Neutral. A negative Up-Down oscillator continues to keep The Tide from being positive.
The Sector Ratio remained at 24-0 Positive after Wednesday’s session. The top 5 strong sectors were Service, Autos, Semiconductors, Transportation, and Banks. There were no weak sectors. Continue to look for changes to the Sector Ratio as the week progresses.
Model Update: There were NO Changes to the Model. It remains 100 percent in cash.
Top Stocks: With the Dow, S&P, and NASDAQ all looking like a top is forming, I continue to avoid any new purchases in the top stocks. All I’m doing now is waiting for the Scalp Trading Indicators to turn negative. When they do, I’ll start posting a few stocks from the Weak List. Right now, all I’m doing is watching. Students should note that the RS Ranking of the Top Stock on the MWL, NVDA, is only 6. Hey, at this point in the pattern, I need to see more than a 6 to get me interested.
Gold: The recent rally in gold appears to be a counter trend correction. If this is the case, gold could still develop a wave ‘c’ rally to the 1,775 level, possibly even to 1,800+ before declining again. The 1,670 level remains critical for gold, as a break of this level could send gold into the mid 1,500’s. The Market Timing Indicators for gold remain Neutral, so I’m avoiding gold for now.
Bonds: Same for Bonds. The ST indicators on Bonds are currently Neutral, so I’m still avoiding Bonds for now. BTW, the pattern in Bonds suggests some type of bottom was made on 18 March. At this point, its still not clear if the bottom was a major Wave 3 or if it was minor wave 3 of 5 down with the current rally being a minor wave 4. Doesn’t really matter for now. I’m not willing to put my money up if the indicators remain Neutral. In this market I need to see positive indicators. In other words, I want Bonds to tell me they’re going higher. I need to see proof!
That’s what I’m doing.
h
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.
Market Signals for
04-15-2021
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | NEU |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 07 Apr 2021 |
NASDAQ | POS | 01 Apr 2021 |
GOLD | NEU | 13 Apr 2021 |
U.S. DOLLAR | NEG | 12 Apr 2021 |
BONDS | NEU | 13 Apr 2021 |
CRUDE OIL | NEU | 12 Apr 2021 |
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