Professor’s Comments February 27, 2015
Posted by OMS at February 27th, 2015
The Dow fell 10 points, closing at 18,214. Volume was right at its 10-day average. There were 139 new highs and 20 new lows.
Yesterday’s decline appeared to be the start of corrective wave 4 of final wave ’e’ up. This minor correction should last for a few days, possibly dropping to the 18,100 level or so before final wave 5 up takes the Dow to the 18,300+ level.
The thing about this correction is that IF I’m right…and it does happen, then it would confirm the current 5 wave pattern for wave ‘e’ up and increase the odds that the Dow will top somewhere between 18,300 and 18,500 on the final wave (wave 5) up. This is what you should be concerned about now.
The only fly in the ointment I see for with the wave 4 correction is that there is still a Big Move signal on the Board from Wednesday’s small change in the A-D oscillator. This signal usually only last 1-2 days after it occurs, so it should happen today. But IF the Dow is going to correct sideways to down today, I really don’t expect a Big Move. So we’ll have to see… Maybe the Big Move happens on Monday to kick off the final wave 5 rally.
Anyhow, the Dean, The Tide and the PT indicators remain positive, so I’m still positive. However, I’m not wildly positive at this point and I’m still only trading stocks that have a compelling reason to trade them.
One of those stocks is EUO, the inverse Euro ETF. Last night it was highlighted by Emeritus for the Honor Roll. As you know, I have been watching UUP, the positive U.S. Dollar ETF, to see if it would fall off the Dean’s List. This hasn’t happened. Instead, for the past few weeks, UUP (and EUO) have traded sideways to form a nice ‘Blade’. And yesterday, both ETFs started to move higher from that ‘Blade’. The small rally caused EUO to enter the Trend Mode, which is likely what caught the attention of Emeritus.
Anyhow, I don’t expect a moon shot from EUO mostly because I only expect the dollar to rise a few points from its pattern. However with a nice HS Pattern in place and narrow Bands, EUO is definitely worth a closer look as a short term trade for the next few weeks.
I also noted that several gold stocks and ETFs have started to appear on the Dean’s List. As you know, this is something that I have been waiting for very patiently. So now with Royal Gold (RGLD) back on the List, I’m just watching to see if the PT indicators to turn positive. If they do, I’m a buyer.
Remember, the reason I’m looking to buy a few shares of gold now is because gold could be starting its next Major Wave up (Major Wave 5 up). And the reason I’m specifically looking at RGLD now is because it is the only gold stock that I track that is already in an Uptrend.
So today, I’m looking to establish a position in gold and thinking about trading EUO if I get a good entry point.
That’s what I’m doing,
h
Market Signals for 02-27-2015 |
|
---|---|
DMI (DIA) | POS |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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Category: Professor's Comments