Professor’s Comments January 21, 2021
Posted by OMS at January 21st, 2021
The markets staged another strong rally on Inauguration Day on moderate volume and relatively weak breadth. The Dow finished with a gain of 258 points, closing at 31,188. It got as high as 31,236 before pulling back. The high slightly exceeded last weeks high 31,224, which brings into question as to whether the recent rally is a wave 2 retracement or something else. The next day or so should tell. Last week I said the Dow would likely complete a bit higher than the 31,200 level, probably close to 31,300. I’ll stay with that number for now.
The NASDAQ and SPX were higher yesterday, gaining 260 and 53 points, respectively.
Volume on the NYSE was 93 percent of its 10-day average. There were 231 new highs and only 1 new low.
The Dow continues to trade inside an Ending Diagonal pattern for Major Wave E up. However, because yesterday’s high slightly exceeded last week’s high, I can’t put an exact labeling on past few days of waves. The rising wave structure might have a bit more rally left before the pattern completes, but I it should be finished within another week or so.
Most of my indicators have turned Positive after yesterday’s rally. However, I continue to see large negative divergences between price and breadth. At the end of the day, its usually breadth that wins, but not without a fight.
The Dean’s List remains Positive; The Tide remains Neutral.
The Sector Ratio remains at 22-2 Positive. The top 5 strong sectors are Insurance, Energy, Media, Semiconductors and Banks. The two weak sectors are Household Products and Telecoms.
Top Stock Rotation Strategy: Last night I held another free training session for students who purchased my Scalp Trading Class. During the session I introduced a new decision Matrix to help students trade the Top Stocks from the Member’s Watch List. Since introducing the new top stock rotation strategy, the results have been fantastic! If you would like to participate in these follow-on training courses, just sign up for the Class and we’ll get you fixed up. I really encourage all students who have not taken my ST Class to do so. Since our key ‘timing indicator’ turned positive on 18 December, which was the signal to enter the top stocks, here’s what happened:
TSLA went from 695 to 884.49. CLF went from 13.48 to 18.77. BIDU went from 192.69 to 258.73. DDD went from 10.86 to 32.13. NBR went from 62.51 to 71.65. All these gains were accomplished in less than a month! I could go on and on. One thing I should point out…. there were no losers in any of the top 10 stocks. You can check this out for yourself. Just go to the 18 December Member’s Watch List and look at what happened with the top stocks. It’s all there….
The above gains were not the exception…they were the rule. When our key ‘timing indicator’ told us to go long back on 3 September, the top stocks on the MWL saw similar gains…again no losers!
The same thing happened every time the key timing indicator turned positive last year. The top stocks had nice gains with no losers.
So please, do yourself a favor. Get the Class and start attending the follow on training sessions. We recorded all the past training sessions, so IF you sign up, I’ll make sure you get a link to the past training videos to get you up to speed. That way, when the ‘timing indicator’ turns negative, you will be able to take advantage of the next decline. Just tell us that you want to take the Class and we’ll get you fixed up.
Model Update: There were NO Changes to the Model. It remains 100 percent in cash.
That’s what I’m doing,
h
The Model Portfolio is being shown for educational purposed only. The Buy/Sell actions in the Model Portfolio are made based on technical indicators that can and do change frequently and should NOT be considered as recommendations for trading an actual portfolio. Any gain or loss in the Model Portfolio should not be used to predict future performance of the Model.
Market Signals for
01-21-2021
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 20 Jan 2021 |
NASDAQ | POS | 20 Jan 2021 |
GOLD | NEG | 08 Jan 2021 |
U.S. DOLLAR | POS | 13 Jan 2021 |
BONDS | NEG | 09 Dec 2020 |
CRUDE OIL | POS | 11 Nov 2020 |
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