Professor’s Comments August 13, 2020
Posted by OMS at August 13th, 2020
I’m still operating without full internet capabilities this morning so I’m gonna keep this short. Comcast should have the issue fixed by 9am today. Anyhow, here’s what I’m seeing.
Monday’s early rally and late pullback appeared to the completion of minor waves 3 and 4 of a five wave sequence for extended wave 5 up. So, yesterday’s 290 point Dow rally was likely part or all of wave 5 up of the sequence. If I’m right about this wave count, wave 5 up should complete near or slightly above Monday’s high of 28,155. This morning’s slight pullback in the pre-market appears to be micro wave 4 of that wave 5 sequence which should be followed by one more pop above the 28,000 level. The Dow does not have to do this as wave 5s can and do truncate.
Once this final wave completes, a close below 27,625 would increase the odds that that Major Wave 3 down is underway.
One of the reasons I believe the market is close to a final top is because of the sentiment, as reflected by the Put./Call ratios on the CBOE. The ratios are now at historically low levels. The last time I saw a P/C ratio of 0.460 was back in 2000 during a similar wave 2 retracement. The S&P was trading over 50 percent lower a few months later. So with sentiment at EXTREME levels, a 5 wave pattern that appears almost complete, and a Fibonacci cluster window and a Phi Mate turn date scheduled for Friday, things could get interesting as the weekend approaches. We’ll see….
Meanwhile, I continue to wait for the Market Timing Indicators to turn. Right now, the indicators on the Dow and NASDAQ remain Positive.
The Dean’s List and Tide also remain Positive.
The Sector Ratio remains strong at 22-2 Positive. The top 5 strong sectors were Service, Retail, Media, Consumer Products and Health care. The two weak sectors were Banks and Leisure.
There were no changes to the Model after yesterday’s session.
I’m still holding my short in Apple. BTW, the pattern in Apple’ is very similar to the pattern on the Dow. Students can see all five waves of wave 3 up if they look at the 5-minute pre-market chart. The pattern starts from Monday’s low. If I’m right about this, APPL should have one more small pop higher and then start heading lower.
That’s what I’m doing,
h
Market Signals for
08-13-2020
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 05 Aug 2020 |
NASDAQ | POS | 30 Jul 2020 |
GOLD | NEU | 11 Aug 2020 |
U.S. DOLLAR | NEG | 24 Jun 2020 |
BONDS | NEU | 10 Aug 2020 |
CRUDE OIL | POS | 06 Jul 2020 |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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Category: Professor's Comments