Professor’s Comments April 17, 2019
Posted by OMS at April 17th, 2019
The markets were slightly higher on Tuesday. The Dow closed up 68 points at 26,452. The NASDAQ and SPX were up 24 and 1 point, respectively. Volume on the NYSE was moderate, coming in at 108 percent of its 10-day moving average. There were 129 new highs and 26 new lows.
There was a small change in the A-D oscillator yesterday, so we need to be on the lookout for a Big Move within the next 1-2 days.
One of the things I saw yesterday that received little attention was the EU’s announcement that its growth rate for the last quarter was only 0.20 percent. The growth rate was off significantly from the previous quarter’s rate of 1.2 percent, so it appears that Europe has started to slow down. This is something that needs to be watched as many U.S. stocks in the SPX derive a significant portion of their revenue from Europe. So, if Europe falls into recession, it will definitely impact growth of U.S. companies.
Yesterday’s lackluster trading action on relatively high volume seemed to reflect this concern. It’s starting to look like the markets are approaching some type of short-term top. With the markets closed this Friday for the Good Friday Holiday, I still believe we will need to be on our toes going into the weekend. The large Ending Diagonal Pattern on the Dow could truncate and terminate at any time. It does NOT have to go to its target near the 27,000 level. Students should pay attention to any negative changes to the market timing signals on the cockpit and the other indicators, like the Signal Ratio and Tide, as we move closer to the weekend.
Like I said yesterday, I believe the odds for higher prices are starting to diminish. I don’t like to keep a lot of money at risk with even odds. I’d much rather pay the 5 bucks and move to the sidelines. So, IF the markets continue to rally into Friday as I expect, I will likely begin to take a few bucks off the table. I’d rather go into the long weekend with a few less bucks on the table and then see what happens early next week.
There were NO CHANGES to the market timing indicators after yesterday’s session. The Dow, NASDAQ, SPX, and Russell 2K remain on Buy Signals.
The Dean’s List and The Tide also remain positive.
On the other hand, the Sector Ratio fell to 22-2 positive. The fact that the Ratio fell after yesterday’s positive session is a warning. If the Ratio continues to fall, it will be a strong indication that the market is beginning to weaken. The Strong List was still led by Real Estate, Semiconductors, Technology, Transportation and Cap Goods. The two weak sectors were Healthcare and PharmaBio. One thing I noted after yesterday’s session was that 12 of the 22 sectors on the Strong List were showing RS ratings of 1 or zero. With low RS ratings, these 12 sectors can easily fall off the Strong List IF the market has one or two strong down days. In other words, one or two down days could easily change the current positive market conditions. Stay on your toes as we head into the weekend.
Model Portfolio: There were NO Changes to the Model Portfolio after yesterday’s session. The Model continues to hold a full position in DDM (538 shares), a full position (370 shares) in UWM, the positive ETF for the Russell 2K, and a half position (635 shares) in UCO, the ETF for Crude Oil. The remainder of the theoretical $100,000 Model Portfolio remains in cash ($36,861).
The Model Portfolio was up $4,764 after yesterday’s session, its highest level since inception. The Model was started on 26 February, so its current gain of 4.72 percent projects to a 40.06 annualized IRR…IF it can continue. It’s a BIG IF! The next few weeks should be a significant challenge for the Model as market turns are always a good test for any Model.
The Model still does not hold a position in gold as it continues to wait for the timing indicators to generate a Buy Signal. Be patient.
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,
h
Market Signals for
04-17-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | SM CHG |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 01 Apr 2019 |
NASDAQ | POS | 13 Mar 2019 |
GOLD | NEU | 09 Apr 2019 |
U.S. DOLLAR | NEG | 11 Apr 2019 |
BONDS | NEU | 01 Apr 2019 |
CRUDE OIL | POS | 26 Mar 2019 |
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
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