Professor’s Comments January 31, 2014
Posted by OMS at January 31st, 2014
The Dow rallied for 109 points yesterday, closing at 15,848. It reached an intraday high of 15,907, which was likely the wave ‘a’ retracement of the a-b-c pattern I talked about on Wednesday. If I’m correct about this, the Dow will likely pull back to the 15,800 level during the next day or so for wave ‘b’ and then make one final push higher toward 16,100 to 16,200 to complete wave ‘c’ of the pattern. The SPX should complete its wave ‘c’ somewhere near 1820 to 1830. After that things could get dicey.
Yesterday’s rally was accomplished on very light volume of only 92 percent of its 10 day moving average. There were 74 new highs and 46 new lows.
The Dean’s List and cockpit indicators remain negative, so we MUST respect the current pattern which suggests that a Major Top is in and the past week of down-up trading action are the initial legs of a new down trend.
One indicator I will be watching closely during the next few days is The Professor algorithm. As a matter of fact, the ONLY way I would consider doing any new buying now is IF he were to give say so. Otherwise, I MUST start thinking about lightening up. All that RED on the cockpit is not something to ignore.
Anyhow, while I’m watching The Professor, I’m attending the World Money Show in Orlando, FL. I’ve been coming to these shows for years. The show used to give me an opportunity to talk with some old friends in the business, hear what others are saying about the market, and investigate new opportunities.
But this year’s show is different. For one thing, the crowd is a lot older. Perhaps a better way of putting it is that there are no young people here. Most of the seniors I see walking around are more interested in getting a free pen than talking to the company reps about the products they are marketing.
Same for the speakers. I used to hear them talk a lot about growth stocks in the U.S. Not this year. Most of them talked about how investors can protect themselves against the falling dollar by investing in foreign currencies and markets, especially in China. Every one of the speakers talked about the damaging effects of the U.S debt. How it was ruining our economy and was now impossible to pay back. BTW, the guys I was listening to were the Bulls and optimists, not the Howard Dents of the world.
Gone are all the trading booths and trading software vendors. This year’s booths are mostly about income producing vehicles, like the REITs, and managed partnerships for oil and gas drilling. Gold and silver coin dealers are everywhere, but most of these didn’t seem to be attracting any attention. It appears that most show attendees are not ready to buy survival gear and put their money under the mattress just yet.
But I have to tell you, the mood was gloomy. I listened carefully to speaker after speaker, many of whom I have become very familiar with over the years. To tell the truth, I have NEVER heard them talk this way before. NEVER.
And when I talked with a few CEO’s of the companies represented, not one had a good word to say about the current administration. The conversation was always the same. How all the rules and red-tape coming from Washington was killing their business. None of these CEOs had any plans to hire new people. It was depressing.
Anyhow, I’ll be back at the show again today. Maybe the mood will change.
Because I did not have access to my computer yesterday, I took a small 2- point profit in my DUST trade. Gold has been moving opposite the market for the past few weeks, so I reasoned that if the market pulls back today as I expect, and gold rises, there is no point in holding DUST. I dumped it and will look to re-buy it again under 29. All I’m doing now with DUST is trading a few shares to keep me interested in the gold market. If the indicators on the gold stocks start to turn negative, that’s when I’ll start to get serious about shorting gold. Not now.
That’s what I’m doing,
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Category: Professor's Comments