Professor’s Comments August 19, 2016
Posted by OMS at August 19th, 2016
The Dow rose 24 points, closing at 18,598. Volume was moderate, coming in at 100 percent of its 10-day average. There were 169 new highs and 9 new lows.
Yesterday’s small rally caused the Up-Down oscillator to turn positive again changing The Tide back to neutral. So with a neutral Tide and no inverse ETFs on the Dean’s List, I continue to wait on the sidelines.
With yesterday’s rally being small, we need to be on the lookout for a Big Move today, as today is the second day of the small change signal from the A-D oscillator. Given that we still have four sell signals on the Board, I would expect the Big Move to be down. However, two of my three Money Flow indicators remain positive and the VTI is also positive, which means that money is still not leaving the market and the momentum is still positive. So if the market declines today like I expect, it will be interesting to see if the Money Flow indicators start to turn negative. For this market to start heading down, there needs to be a momentum shift and the fastest way to get one started would be for money to start leaving this market. We’ll see.
Gold (GLD) continues to form what appears to be a sideways consolidation triangle. Yesterday GLD rose 0.61 cents to 129.11. At this point, it’s not clear if the ETF is going to break out of the triangle or if it still needs another small down wave to complete the pattern. So far the first two legs of the triangle are pretty well defined, but the last 9 days are clouded in terms of wave count. It’s possible that there are three additional waves buried in the last 9 days of the chart, but I can’t make them out. A move above 130.60 would tell me that GLD has completed the triangle pattern and is ready to move higher.
Right now, the VTI on GLD is positive, but the ETF hasn’t started to trend yet. The 2-period RSI Wilder is showing an overbought reading of 94.44, so without a trend in place, we could see a small pullback today. The money flow indicators on gold continue to improve as the sideways triangle develops. As long as this continues to happen, I’m holding my gold shares.
BTW, I got back from California late last night. It was really nice to see some of the southern California coastal area and my son’s new home. And even though it was tough getting up early this morning, it feels great to be back on East Coast time. I have to tell you that while I loved California, I really hated the time difference. I’m an East Coast guy and it’s good to be back home.
That’s what I’m doing,
h
Market Signals for
08-19-2016
DMI (DIA) | POS |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | NEU |
SUM IND | NEG |
VTI | POS |
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