Professor’s Comments December 2, 2015

Posted by OMS  at December 2nd, 2015

The Dow rallied for 168 points, closing at 17,888.  Volume was moderate, coming in at 105 percent of its 10-day moving average.  There were 105 new highs and 52 new lows.

Yesterday’s rally appeared to be the start of wave 3 of five waves to a top.  If this is the case, then the Dow should continue to rally to about 18,100, before the wave 4 pullback begins. 

As expected, all of the cockpit indicators turned back to the positive side yesterday.  As long as these indicators remain positive, the Dow should continue to chop higher, eventually completing near or above the 18,350+ level. I would expect the topping process to complete in about 3-4 weeks from now.

If you entered the trade I mentioned yesterday with DDM or any of the other indexes, just continue to monitor the trade on the shorter term bars.  Once the Dow gets closer to my wave 3 target near the 18,100 level, I’ll start doing some money management.  But not now.

Right now, with all of the cockpit indicators being positive, I’m still looking for entry points on any pullback.

Remember, the Dow has started a minor impulse wave rally.  So anytime I believe the market is in an impulse wave rally, I’m always looking to add to my positions using Rifle Trades.  In other words, I now have my basic position, but if the 2-period RSI Wilder moves into oversold territory on the Daily chart, I will look to add to those positions, selling them once the short-term Wilder becomes overbought.

Also, you might want to keep an eye on gold now.  Yesterday my gold indicators moved to a sideways signal.  It appears that gold is in the process of completing a Major Wave 4 pattern.  If I’m correct about this, then gold stocks and ETFs should start to appear on the Dean’s List within the next few days. 

Gold has made several fake out moves this past year, so we need to pay attention to the indicators and Lists.  But looking at the charts, it appears that all of the waves of a Major bottoming pattern are now in place.  Again, watch for gold stocks to appear on the Dean’s List and then look for the indicators to turn positive. Also, remember to keep your positions small.

Gold is still in a down trend and until it makes a ‘Rope Jump’ and the 50 moves above the 200, any positions established must be considered ‘trial’ or speculative positions.

That’s what I’m doing,

h

Market Signals for

12-02-2015

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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