Professor’s Comments December 10, 2020
Posted by OMS at December 10th, 2020
The markets rallied as expected early Wednesday with the Dow rising to 30,320, just short of my target of 30,351 for Wave 5 up. The rally was the Big Move predicted by Tuesday’s small change in the A-D Oscillator. After reaching its early intraday high, which could have marked the completion of Wave 5 up, the market began to pullback with the Dow ending the day with a loss of 105 points, closing at 30,068. Technology stocks on the NASDAQ were hit especially hard, dropping 284 points, which was the worst loss for the index in almost six weeks. The SPX was down 29 points. Volume on the NYSE was moderate, coming in at 106 percent of its 10-day average. There were 335 new highs and only 2 new lows.
A late rally into the close prevented the Market Timing Signals from turning negative. However, with sentiment and advisor readings at historically Bearish levels and negative divergence in the advance/decline line and momentum indicators, all the signs for a market top are present. The only thing lacking now is a break of yesterday afternoon’s low of 29,952 on the Dow to send the markets reeling.
The alternate possibility is that yesterday’s high was the completion of wave 3 up within Wave 5 up and the afternoon decline was wave 4 down. If this is the case, the Dow should attempt one more rally to test yesterday’s high before starting its major decline.
In either case, I remain on Red Alert. A decline below the 29 600 level would eliminate any remaining Bullish scenarios.
There were NO CHANGES to the Market Timing Indicators after yesterday’s session. They remain Positive.
The Dean’s List and the Tide remain Positive.
The Sector Ratio strengthened to 24-0 Positive after yesterday’s session. The top 5 strong sectors were Energy, Media, Banks, Autos, and Material. There were no weak sectors.
Once again, energy stocks held their own during yesterday’s declining session. NBR reached another new high as it continues to amaze. The stock was up another 4.67 points before pulling back to close 2.86 points higher at 68.18. Stocks like NBR are the reason why you want to be in the top stocks from the Member’s Watch List. Continue to pay attention to the trend and volume indicators for NBR and other top energy stocks for sell signals. No stock goes to the moon.
Also, if you have time, you might want to look at what some of the non-energy stocks at the top of the MWL did during yesterday’s volatile session. Stocks like Three D Systems (DDD) and Signature Bank (SBNY) which gained over 6 points yesterday! With the NASDAQ dropping like a rock, stocks like BG Staffing (BGSF) and Cleveland-Cliffs (CLF), which have been near the top of the List for weeks, only pulled back slightly. It’s on days like yesterday when you really begin to appreciate the value of being in strong stocks. When the market is having a bad day, these stocks only pull back slightly and because they are in Uptrends, the odds are in favor of their moving higher if/when the market bounces back. Like I said, if you have time, go look at what these stocks have done. There’s a good reason why they are at top of the MWL. They’re strong! …and when a top of significance is fast approaching, strength is where you want to be. But don’t get greedy… pay attention to the 35-period CCI. When the trend is over, it’s over even for the strongest stocks.
During yesterday’s session, several students sent me emails thanking me for having last week’s Training Session on how to use the new Scalp Trading Indicators with the Member’s Watch List. While I appreciate all the wonderful feedback, please remember the way you can really thank me is by sharing your success with your friends, co-workers, and family. As I mentioned during the training session, my costs have gone up significantly, and the way we can offset these costs is by adding subscribes. So, IF you know someone who is interested in learning to trade or wants to generate income for retirement or a child’s education, please tell them about our book and web site. The book will give them the basics and we’ll give them free access to the web site for a few weeks so they can continue to learn about our indicators and Lists. Just let us know that you recommended them so we can give them the free trial.
Model Update: The Model was stopped out of its shares of QQQ during yesterday’s session. So, now the Model is 100 percent in cash.
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The 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
12-10-2020
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 01 Dec 2020 |
NASDAQ | POS | 23 Nov 2020 |
GOLD | NEG | 09 Dec 2020 |
U.S. DOLLAR | NEG | 07 Dec 2020 |
BONDS | NEG | 09 Dec 2020 |
CRUDE OIL | POS | 11 Nov 2020 |
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