Professor’s Comments July 22, 2015
Posted by OMS at July 22nd, 2015
The Dow fell 181 points, closing at 17,919. Volume was moderate, coming in at 103 percent of its 10-day average. There were 76 new highs and 213 new lows.
Yesterday’s decline caused The Tide to turn negative. So now I am looking to buy inverse index ETFs as they appear on the Dean’s List. I’m still approaching these Buys with caution, mostly because the two Money Flow indicators… the Coach(DIA) and Coach(QQQ) are still positive. If corrective wave 2 up has completed, and impulsive wave 3 down is starting, both Money Flow indicators should turn negative very soon.
One thing I’m watching very closely now is the performance of my new short-term trading signals. I talked about them last week when I got a Sell Signal on the Dow (DIA) at 180.99. Since then, DIA has fallen over 2 points. I used this signal to Buy DXD, the inverse index for the Dow.
The reason I mention this today is because near the close yesterday, I got a short–term Buy Signal for GDX. The price at the time the Buy Signal occurred was 14.10.
So now, based on these two short-term trading signals, I’m short the Dow using DXD and long gold using GDX. Remember, I’m still in the process of evaluating these short-term trading signals, so IF you follow my purchases, please be careful. I have been watching and evaluating these signals for the past few weeks and they appear to be very reliable. Most signals last from 2 –7 days which would make them ideal for position trades. If they continue to work out, (a Big IF), then I’ll likely add them to the mix. But for now, I’m still in the evaluation process.
BTW, I found it very interesting that the Buy Signal on GDX occurred about the same time I was looking to buy a ‘trial’ position in the ETF anyway. The signal was enough to push me over the top.
Students should also note the how the Dollar, Euro and gold performed yesterday. On a day when gold rose, UUP, the ETF for the Dollar and EUO, the ETF for the Euro both fell 0.18 and 0.5 respectively. Both of the latter ETFs remain on the Dean’s List, and at this point there are no gold related ETFs on the List. So until I see a few gold stocks and ETFs on the List AND UUP is replaced by UDN, the inverse ETF for the Dollar, I can’t get too aggressive with my gold purchases.
This is one of the reasons I’m being very cautious with my new short-term signals and sharing the information with you. The new signal Sell Signal on DIA and the Buy Signal on GDX could be an early warning that things are changing.
Remember that IF wave 3 down is starting, there should be lots of impulsive downside action to follow. Yesterday’s drop of 181 points was a good start, but I need to see more. An impulsive decline below the 7 July low of 17,465 would confirm that wave 3 down is underway. If the 17,465 level is broken, things could start to get ugly. Protect yourself.
That’s what I’m doing,
h
Market Signals for 07-22-2015 |
|
---|---|
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | NEG |
SUM IND | NEG |
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