Professor’s Comments February 1, 2019
Posted by OMS at February 1st, 2019
The markets were mixed yesterday. The Dow finished down 15 points, closing at 25,000. The NASDAQ and SPX were up 99 and 23 points, respectively. Volume on the NYSE was heavy, coming in at 124 percent of its 10-day moving average. There were 132 new highs and 7 new lows.
The Bureau of Labor Statistic will release its latest jobs report at 8:30 am today. Last month’s report was an amazing 312,000 new jobs, which was 128,000 more jobs than expected. So, it should be interesting to see how the market reacts to this month’s number, which should be significantly lower. Consensus estimates are that 165,000 were added in January. Anything significantly more or less could result in another large move in the markets. BTW, yesterday’s A-D oscillator closed with a reading that was only15 points from Wednesday’s reading, so it’s close to a ‘small change’. I didn’t turn the cockpit light on because the reading was more than 10 points, but still…it’s close enough that we should be on our toes and looking for a Big Move within the next 1-2 days.
From a pattern perspective, it still appears that the Dow is nearing completion of sub-wave 2 up within Major Wave 3 down. Yesterday’s early decline and late recovery appeared to be associated with a small sideways triangle that has formed since the Fed meeting. Triangles are consolidation patterns, in this case a small wave 4. If this is the case, it means that sub-wave ‘c’ up still needs one more final rally wave to complete the five wave sequence for wave ‘c’ up. On the other hand, students should realize that the current wave structure for wave ‘c’ up is a Rising Wedge or Ending Diagonal Pattern and these patterns can (and do) truncate at any time. So, IF today’s Jobs Report numbers disappoint the market, the current rally could end at any time.
Today is the first day of the new month, so the generally positive end of month period for mutual fund re-balancing is over. Also, when the market rallies on a Fed day and continues to move higher the following day, it usually leads to a lower market the following week. So, IF the market rallies today, it could mark the end of sub-wave 2 up with the next leg down of Wave 3 down starting next week. We’ll see.
The Dow, NASDAQ, SPX and RUT remain on Buy Signals. As long as the market timing indicators for these indexes remain positive, the markets can continue to push higher. The Dean’s List and Tide also remain positive
The Sector Ratio increased to 22-2 positive after yesterday’s session. The Strong List was led by Semiconductors, Real Estate, Transportation, PharmaBio and Financials. The two sectors on the Weak List were Food Drugs and Food.
Gold (GLD rose 0.06 cents yesterday to 124.75. It still appears that GLD is nearing completion of Wave 1 up and should begin its Wave 2 pullback soon. If this happens, it would be very positive for the metal as it would suggest a major Wave 3 rally leg will begin after Wave 2 down completes. I continue to look for buying opportunities near the 120 level.
That’s what I’m doing,
h
Market Signals for
02-01-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 08 Jan 2019 |
NASDAQ | POS | 07 Jan 2019 |
GOLD | POS | 25 Jan 2019 |
U.S. DOLLAR | NEU | 31 Jan 2019 |
BONDS | POS | 31 Jan 2019 |
CRUDE OIL | POS | 28 Jan 2019 |
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