Professor’s Comments February 14, 2019

Posted by OMS  at February 14th, 2019

The markets rose again yesterday but gave up about half their gains going into the close.  The Dow, which was up over 200 points in the morning, finished with a gain of 118 points to close at 25,543.  The NASDAQ and SPX were up 6 and 8 points, respectively.  Volume on the NYSE was moderate, coming in at 99 percent of its 10-day moving average. There were 87 new highs and 5 new lows. Wednesday’s new highs were less than Tuesdays, but they were not enough to produce a change in the direction of my breadth indicators.

Yesterday’s choppy trading still appeared to be part of wave ‘c’ of the a-b-c move for wave 2 up.  If I’m right about the pattern, wave 2 up should be close to completing and Wave 3 down should be next. The markets remain at critical moving average resistance levels. They need to start moving down soon IF the wave 2 scenario is playing out. Otherwise, if they start breaking above resistance, there is a possibility that a new pattern is developing, and the Bull Market is not dead.  It’s still way too early to say if this is happening, but as long as the market timing indicators on the cockpit remain positive, the possibility of higher prices exists.

The volume portion of my VTI-volume indicator on the Dow turned positive yesterday, putting the Dow back on a Buy Signal.  So now all four of the major U.S. indexes are on Buy Signals.  

The Tide and Dean’s List also remain positive.

I continue to see negative divergence in the Split Volume Moving Average (SVMA) and On-Balance Volume (OBV) indicators. The negative divergences on these indicators suggest a top is nearing as the current rally is not being supported by increasing volume.

The Sector Ratio rose slightly after yesterday’s session. The Ratio is now at 18-6 positive.  Students should continue to watch for changes to the Strong and Weak Lists.  Once wave 2 up completes, the Sector Ratio and the Lists should begin to reflect the new change in direction.

The Strong List was led by Household Products, Semiconductors, Technology, Computers, and Retail.  The Weakest Sectors were Autos, Energy, Food Drug, Telecoms, and Media.

Gold (GLD fell mildly yesterday, dropping 0.49 cents to 123.37.  GLD still appears to be in a small wave 2 pullback.  The small wave 2 is forming the ‘Blade’ of a Hockey Stick Pattern which projects higher prices. GLD remains on a Buy Signal.

My market timing signal on Crude Oil (UCO) turned positive yesterday.  UCO appears to be in the process of completing a small wave 2 along its 50-day moving average.  With tight Bands and rising volume, IF UCO can begin to move above its early February high of 19.15, it should test the overhead resistance of its 200-day moving average located at 23.48.  At this point, Crude is one of the more interesting trades on the Board.  The only fly in the ointment for Crude is the Money Flow indicator. Yesterday, even though UCO rose 0.58 cents, its Money Flow indicator turned negative.  Money Flow is always critical component for higher prices, so I’m going watch if UCO can move above its early February high before buying.  Right now, I’m not seeing any institutional buying yet.

The market timing signal for Bonds turned negative yesterday.  This tells me that market driven interest rates could be starting to rise.  A rise in interest rates would be a negative for equities. 

That’s what I’m doing,

h

Happy Valentine’s Day!

Market Signals for

02-14-2019

One hour video recorded from May 28, 2016 The Professor’s Signs of a Major Market Turn – Prospectives and the Projected Timing and Levels One hour streaming video – includes webinar handouts The Professor usually holds an update class whenever the Market looks like it may be making a major turn. If you have been following the Professor’s Comments you know that a turn is due….. LEARN MORE

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.