Professor’s Comments April 23, 2019
Posted by OMS at April 23rd, 2019
The markets were mixed yesterday. The Dow closed down 48 points at 26,511. The NASDAQ and SPX were up 17 and 3 points, respectively. Volume on the NYSE was moderate, coming in at 92 percent of its 10-day moving average. There were 54 new highs and 34 new lows. Students should note that the number of new highs continues to decrease while the number of new lows continues to increase. This has caused The Tide, our most important breadth indicator, to turn negative. I NEVER like to hold long positions when The Tide is negative.
It continues to look like the markets are approaching some type of short-term top. The large Ending Diagonal Pattern on the Dow could truncate and terminate at any time. It does NOT have to reach its target near the 27,000 level.
There were NO CHANGES to the market timing indicators after yesterday’s session. The Dow, NASDAQ, and SPX remain on Buy Signals that continue to weaken. The Russell 2K remains on a Sell Signal.
The Tide is negative. The Dean’s List remains positive.
I continue to see large negative divergences between index prices and my breadth and money flow indicators. These negative divergences usually appear when a top of major significance is approaching.
With mixed signals on my major market timing indicators, I see NO point in putting additional money at risk at this time.
The Sector Ratio fell to 19-5 positive after yesterday’s session. The Ratio was at 21-3 positive on Thursday, so it continues to weaken. The Strong List was led by Real Estate, Semiconductors, Technology, Autos, and Leisure. The Weak Sector List was led by Healthcare, PharmaBio, Consumer Products, Service and Banks. There are still 9 sectors on the Strong List with RS ratings of 1 or zero. With low RS ratings, these 9 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 and make them negative.
Model Portfolio: There were NO Changes to the Model Portfolio after yesterday’s session. The Model currently holds a ‘trial’ position (1,000 shares) of TZA, a 3X inverse leveraged 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 ($79.648).
Yesterday the Model’s position in Crude Oil approached and hit its target level of 25.79 before pulling back to close at 25.56. So, with the 2-period on UCO now overbought at 92.66, its likely that UCO could begin to pullback. At this point, UCO has ‘Jumped the Ropes’ and should now begin to form some type of consolidation pattern for Wave 2 on its Daily Chart. The pattern could take several months to develop. Because the odds are high that some type of consolidation pattern will develop, I see no reason to continue to hold shares of UCO in the Model Portfolio. Holding these shares only puts this money at risk with low odds for gain. The shares will be sold at today’s open.
The Model Portfolio has now gained $5,310 or 5.28 percent since inception on 26 February. This translates to an annualized IRR of 39.8 percent. The Model has accomplished this performance under less than desirable market conditions and without an investment in gold, which means that 25 percent of the Model’s available funds have not been put to work.
So far, the Model has made 14 trades. Of these trades, 9 have been winners with an average gain of 5.8 percent. There were 5 losers with an average loss of 2.48 percent. The average holding period for the winners was 15.11 days with the average period for the losers at 5.2 days.
GLD was unchanged at 120.37 after yesterday’s session. The current pattern for GLD suggests the ETF is in the process of completing wave ‘c’ down of Wave 2 down. Once Wave 2 down completes, gold (and silver) should begin to rally hard as Wave 3 up unfolds.
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
04-23-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | NEG |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 01 Apr 2019 |
NASDAQ | POS | 13 Mar 2019 |
GOLD | NEG | 11 Apr 2019 |
U.S. DOLLAR | NEU | 03 Apr 2019 |
BONDS | NEG | 22 Apr 2019 |
CRUDE OIL | POS | 18 Apr 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
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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.
Category: Professor's Comments