Professor’s Comments December 28, 2022
Posted by OMS at December 28th, 2022
The Dow spent the day trying to rally but each time it seemed to get going, the rally failed. At the end of the day, the large cap finished with a gain of 38 points, closing at 33,242. The NASDAQ and SPX were down 163 and 16 points, respectively.
I will be leaving for a quick visit to the D.C. area tomorrow morning, so I’m posting a few Comments early. Basically, the X, Y wave retracement rally scenario I talked about last Friday for the Double Zig-Zag Pattern is unfolding as predicted. The rally on the SPX got as high as the 3,847 level today, so it could be complete. My lower target for the SPX retracement rally was the 3,876 level. My upper-level target is near the 3,900+ level, but from what I saw today, I believe any rally to this level has low odds.
I could take some time to walk you through the two scenarios I have to complete sub-wave up but it’s probably not worth the time it would take to explain it. Besides, the details don’t really matter. What matters is that in either scenario, once sub-wave 2 up completes, either now or with a rally of another 100-200 Dow points, the next wave down should be a dozy. I firmly believe that this is what students should be focusing on now and in the days ahead.
There was a small change in the A-D Oscillator of 8 points,so we need to be on the lookout for a Big Move within the next 1-2 days.
Once Wave 3 of Major Wave 3 down starts, it should begin to accelerate as 2023 progresses. I believe this downside acceleration will test the Wave 1 low of 28,866 lead to significantly lower prices once all five Major Waves are complete.
Today, the Russell 2K closed at 1,750 which is below 1,752, which was my downside ‘Line in the Sand’ for that index. As a result, I added several shares of TZA to my Regular and IRA trading accounts. I bought the shares at the 13:29 mark when a Green Arrow appeared on the 7 min bars. Students might want to check out this classic “Arrows” trade. I also re-established the 17 March Puts I sold last week in DIA and SPY. I used strikes of 300 (DIA) and 350 (SPY) for the Puts.
The Market Timing Indicators for the Dow and NASDAQ did not change after today’s action. Both are still negative.
The Dean’s List and Tide are also negative.
The Sector Ratio weakened to 17-8 positive after Tuesday’s session. The top five strong sectors were Cap Goods (7), Household Products (2), Real Estate (2), PharmaBio (2), and Semiconductors (1). The top five weak sectors were Retail (-3), Autos (-1), Banks (-1), Food Drug (-1), and Computers (-1).
Once I get to my destination, I’ll have an opportunity to look at the markets and if I see that Wave 3 down starting, I’ll post additional comments.
That’s what I’m doing,
h
Market Signals for
12-28-2022
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
A/D OSC | SM CHG |
DEANs LIST | NEG |
THE TIDE | NEU |
Index | Signal | Signal Date |
---|---|---|
DOW | NEG | 15 Dec 2022 |
NASDAQ | NEG | 15 Dec 2022 |
GOLD | POS | 27 Dec 2022 |
U.S. DOLLAR | NEG | 14 Nov 2022 |
BONDS | POS | 16 Nov 2022 |
CRUDE OIL | POS | 27 Dec 2022 |
CRYPTO | NEG | 10 Nov 2022 |
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