Professor’s Comments January 27, 2015
Posted by OMS at January 27th, 2015
After an early decline, the Dow rallied into the close to finish up 6 points at 17,670. Volume was low, coming in at 86 percent of its 10 day average. There were 267 new highs and 47 new lows.
Even though the markets finished positive, yesterday’s early decline was enough to turn the Dean’s List and the DMI on the Dow (DIA) negative.
The Tide remains positive. So once again, the indicators are mixed.
Yesterday’s action did not do anything to improve the situation with my volume indicators. They still look horrible! And unless they start to improve, this market might not make it back to 18,000.
Remember, there are still two scenarios on the Board. The one I’ve been favoring, mostly because the momentum remains positive, says that the Dow should make one more rally above 18,000 to complete wave ‘e’ of the Ending Diagonal. But we know that ‘e’ waves in an Ending Diagonal Pattern can and do truncate, so they are always suspect.
The second scenario says that the market is in a wave 2 retracement. It assumes that the Dow topped on 26 December, and that the waves that have developed since have been part of a new Bear Market. As long as the Dow stays below 17,923, the wave 2 scenario is still very much alive and well.
Yesterday the CCI on the Dow turned negative after being above zero for two days. The indicator is still nowhere close to entering the Trend Mode to the downside, but given the pattern, the horrible volume numbers, and now a negative Dean’s List and DMI, a few days of negative trading could get things rolling south.
And if The Tide turns negative and the CCI enters the Trend Mode this time, it’s highly likely that wave 3 down of Major Wave 1 down will be starting. In other words, IF the Tide turns, we ain’t goin to 18,000! It could be a loooong time before that number is seen again.
So IF you’re long, you DO NOT want to see the CCI enter the negative Trend Mode now (CCI<-100).
On the other hand, IF The Tide stays positive, and the 2-period RSI falls below 30 today with a neutral CCI, we could start to rally later in the week.
So please be EXTREMELY careful now and pay close attention to the indicators.
That’s what I’m doing,
h
The next Basic Class at UNF starts Wednesday night, 28 January at 6:30. Please tell your friends.
Also, I will be doing a webinar for AIQ Systems on Thursday, 29 January starting at 4:30pm. During “Sticks in the Sand”, I will be discussing my outlook for 2015 and the strategies and techniques I plan to use to trade equities, oil, gold, bonds, and the dollar. I discussed a lot of this during my last Update Class at UNF, where the information was very well received. By doing the webinar, it allows me to share the information with more of my students. So IF you were unable to attend the Update Class, you might want to register for the webinar by calling Barbara Greer, AIQ Sales, at 800-332-2999.
Market Signals for 01-27-2015 |
|
---|---|
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEG |
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
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