Professor’s Comments Before the Open 6/10/2020

Posted by OMS  at June 10th, 2020

The two things I’m watching today are the Dow and gold. Yesterday’s decline in the Dow was certainly NOT impulsive, so it’s likely the start of Wave 4 down within final Wave C up of Major Wave B up. If I’m correct about this, the Dow should trade down to a low near 27,000+/- before starting final Wave 5 up. At this point, the Model is holding a trial position of 1,200 shares of DXD. If the Dow trades down to 27,000, the Model will sell its shares of DXD and depending on how things look at the time, will either move to the sidelines or buy a small position in DDM to play the final rally.

Gold had a small pop yesterday but mining stocks were relatively weak. The HUI appears to be forming a small H&S pattern that should take prices lower over the next few weeks. My target for wave 2 down of the pattern was near the 240 level. But now that the H&S pattern has developed, I am adjusting my target closer to the 220 level. This new target puts more juice in the lemon, so today, I’ll be looking to establish either a short position in the junior miners (GDXJ) or possibly buy a few shares of DUST. This is a spot where you will need to be extremely careful in your choice of trading vehicles, because it is possible that gold could rally while the miners fall. Scalp trades only.

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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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