Professor’s Comments April 27, 2021
Posted by OMS at April 27th, 2021
The markets were mixed yesterday in relatively quiet trading. The Dow finished the day slightly lower while the S&P and NASDAQ were slightly higher. There was nothing about yesterday’s trading that would make me change my short-term outlook for the indexes. The Dow should continue to push higher as final Wave 5 up completes, probably close to the 34,700 level. The S&P and NASDAQ should do the same as they trace out the final sub-waves of their five wave patterns. I’m still using 4,200 on the S&P and 14,200 on the NASDAQ as my final targets.
The past few days of trading on the S&P have become interesting from a pattern perspective in that the up-down-up moves the index could be associated with a wave 4 triangle. If this is the case, the S&P could fall to the 4,140 level, possibly as low as 4,120 which is close to the 20 April low of 4,118 low before moving higher. If this happens, the move down would be wave ‘c’ of wave 4 in the pattern. Triangles are always tricky patterns to trade and this one is no different. However, IF the current pattern turns out to be a triangle, it will increase the odds of a final rally toward 4,200. Students should remember that triangles are consolidation patterns where the price usually leaves the pattern in the same direction it enters the pattern. In the case of the S&P, it’s up.
Bottom Line: Students should continue to pay close attention to the Market Timing Indicators. Right now, the Market Timing Indicators are still Positive. The Scalp Trading Indicators are still Positive. If they start to turn Neutral or Negative…pay attention.
The Dean’s List has turned Positive. The Tide is also Positive.
The Sector Ratio strengthened slightly to 23-1 Positive after Monday’s session. The top 5 strong sectors were Service, Autos, Retail, Banks, and Cap Goods. The one weak sector was Energy. 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. Teradata, TDC, the Top Stock from Friday’s MWL, gained 1.68 points yesterday to 52.18. It opened at 50.43 giving students an opportunity for an excellent day trade. Same for Seagate Technology, the #3 stock on the List. It also gave students an opportunity for a huge gain after the open finishing 4.12 points higher at 92.27. BTW, Seagate’s 4.12 point gain came after a gain of 5.07 points on Friday. Talk about a strong stock.
CORN, a highly ranked ETF on the MWL, was up 0.66 cents yesterday. CORN is not as volatile as the other stocks on the MWL, but I keep it in the data base because once it starts to move, it tends to produce nice short-term gains. The price action on CORN is almost always weather related so when you see it on the List, it’s usually caused by some excessive weather condition in the central part of the country.
I mention TDC, STX and CORN today to show students that just because the market is having a lackluster day trading inside what appears to be a consolidation triangle, it doesn’t mean that your performance for the day must be muted. Remember, the stocks at the top of the MWL are there for a reason…. they are among the strongest stocks on the planet. So don’t worry too much about what the overall market is doing or what it might do. If you worry about the market, you tend to lose sight of the things you have right in front of you. Tell yourself…I don’t care what the 3,000+ plus stocks in the market are going to do, I’m just going to focus on one or two strong stocks. Then IF the ST indicators turn positive, go for it. At the end of the day, if you’re still worried, get out. There’s nothing wrong with moving to the sidelines when you’re worried. Tomorrow’s another day and if your stock is still #1 on the list, you can trade it again. That way you’ll ALWAYS be in the strongest stocks. Does this conservative approach make sense to you? Hmmm?
Yesterday I sent out an email announcing a follow-on training session for new and returning students who recently purchased the ST video Class. The reason I’m limiting this session to new students is because I want to give them a chance to have their questions answered. Remember, when you purchased the Class, you had a chance to get your questions answered. Now it’s their turn. But you know me, I NEVER forget students who previously purchased the Class, so I will be posting a link to the session once its complete. Hopefully, I’ll get the link posted sometime next weekend.
BTW, one of the things I did in preparing for next Friday’s Update and Training Session was to go back and look at what happened to the stocks on the MWL when the ‘trigger’ on the DIA turned positive. In my last training session, I showed students what happened back in December 2020. If you recall, the gains were impressive…with no losers! So now that three months have passed, I could look at two other times when the ‘trigger’ gave say so. And not surprisingly, during both periods the results were the same. More winners. And if you followed the rules and only picked trending stocks from the MWL, once again…NO losers! That’s why I will be posting a link to the training session, so students can see the power of this new approach to trading.
Also…I’m NOT talking about some wimpy performance here either. I’m talking Big Winners. For example, DDD systems went from 38.86 to 56.5 in five trading days! TDC went from 27.54 to 59.58 in five days. NBR went from 71.89 to 133.61 in 23 days. Performance like this is the reason why I want my students to have the link.
Gold: No change to the Comments I recently posted in the WSR. The 3-3-5 flat corrective pattern I have been discussing for gold appears to have ended. If gold breaks below 1,770 now, the 3 wave pattern will likely extend to 5 waves which will confirm that the next major leg down is underway. If this is the case, the metal should trade down to the 1,660 level. If it breaks below 1,660, it could go as low as 1,560. Gold closed at 1,781 yesterday.
Bonds: Same for Bonds. The ST indicators on Bonds remain Positive, but I’m still avoiding Bonds for now. I still believe that the recent rally is associated with a retracement wave 4 up. Once this wave completes, Bonds should fall below their 18 March low.
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
04-27-2021
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 07 Apr 2021 |
NASDAQ | POS | 23 Apr 2021 |
GOLD | NEU | 23 Apr 2021 |
U.S. DOLLAR | NEG | 12 Apr 2021 |
BONDS | POS | 20 Apr 2021 |
CRUDE OIL | NEU | 22 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