Professor’s Comments January 18, 2019
Posted by OMS at January 18th, 2019
After trading flat for most of the day, the markets broke higher in the late afternoon on news that the removal of tariffs on trade with China was being considered. (When I heard the news, it made me wonder why the U.S. Would do this now, especially when two days ago, it was announced that the trade deficit with China was back at record levels. Hmmm?) Anyhow, the Dow shot higher, gaining almost 200 points in minutes, but pulled back to finish 163 points higher at 24,370. The NASDAQ and SPX were up 49 and 20 points, respectively. Volume on the NYSE was only 94 percent of its 10-day moving average. There were 19 new highs and 11 new lows.
Yesterday’s 163 point rally was the Big Move predicted by Tuesday’s small change in the A-D oscillator.
Yesterday’s rally caused me to change the wave count slightly. Because the rally exceeded the 23 November low of 24,409, it means that the current rally cannot be Wave 4 up. A Wave 4 can not invade the territory of a Wave 2., so the current rally is likely part of Wave 2 up within Major Wave 3 down This also means that the next move down will be a more impulsive Wave 3 down within Major Wave 3 down, and NOT a stair step Wave 5 down of Major Wave 3 down. I’ll post a chart to show the change in Wave count this weekend.
There were no changes to my market timing signals for equities. The Dow, NASDAQ, SPY, and RUT remain on Buy Signals. The current pattern appears to be within days of completion. However, as long as the market timing signals for equities remain positive, it’s likely that yesterday’s spike high will be re-tested. Once this re-test completes, the markets should resume Major Wave 3 down.
With the market EXTREMELY overbought and at significant moving average resistance, I continue to watch the 35-period CCI on the hourly chart of the DIA. If it turns negative, it will be my signal to start buying and holding inverse index ETFs as they start to appear on the Dean’s List.
The Sector Ratio flipped back to positive after being 10-14 negative for one day. The Ratio is now 14-10 positive. The RS ratings of the sectors on the Strong List are still low which cause the Ratio to turn negative again on almost any down day. The Strong List was led by Consumer Products, PharmaBio, Service, Real Estate, and Retail.
Gold (GLD) fell 0.16 cents to 122.11. GLD still appears to be forming a small triangle on its Daily chart. If so, it could move another 1-2 points higher in the next few days to complete the pattern. The gold miners remain on a Neutral Signal. With mixed signals between gold and the miners, I’m on the sidelines waiting for the signals to resolve. I still view the 118-119 level as a buying opportunity for GLD.
That’s what I’m doing,
h
Market Signals for
01-18-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 08 Jan 2019 |
NASDAQ | POS | 07 Jan 2019 |
GOLD | POS | 27 Dec 2018 |
U.S. DOLLAR | NEU | 16 Jan 2019 |
BONDS | NEU | 17 Jan 2019 |
CRUDE OIL | POS | 08 Jan 2019 |
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