Professor’s Comments Before the Open 12/21/20

Posted by OMS  at December 21st, 2020

I just posted a revised WSR. There was an error in the date of the SPY Put I purchased. Should have read 16 December, 2022, instead of 2002.

Anyhow, looking at the futures this morning, it looks like the Dow is starting to break below the key 30,000 level I mentioned in the WSR. Remember, a break of this level should lead to a test of 29,600. Then if this level is broken, it would tend to confirm the Bear is out of its cage.

With this trend line break happening and the volume indicators below zero, I went searching for a few stocks on my Weak List to short. But at this point., it’s still very early and none of the stocks near the top of the List are in the Down Trend Mode. It will likely take another day or so for this to happen.

One of the reasons the stocks at the top of the Bullish Member’s Watch List were so effective in making money for us was because they were all in the Up Trend Mode. It’s pretty easy to make money with trending stocks.

Right now, stocks like SO, UNH, PRGP, and RCL are near the top of the Weak List, but are clearly NOT Trending, so I’d be careful. If the downtrend continues like I expect, there should be a bunch of stocks to pick from.

BTW, none of the stocks listed above are recommendations. However, because they are on the Weak List now, they could become leaders of the Bear pack. Stocks that are already weak tend to be among the leaders on the way down….

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Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
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