Professor’s Comments July 26, 2016

Posted by OMS  at July 26th, 2016

The Dow fell 117 points early in the session, before bouncing late in the day to close down 78 points at 18,493.  Volume was moderate, coming in at 92 percent of its 10-day average.  There were 254 new highs and 9 new lows. 

Yesterday’s moderate decline caused several indicators to turn negative.

The VTI turned negative for the first time since 29 June when the Dow was trading at 17,695. The ensuing rally reached a high of 18,622 or 927 Dow points.  However, I should mention that even though the VTI is currently negative, it is still in the Up Trend Zone.  As long as it remains in the Up Trend Zone, it’s likely that the Dow will continue to chop around until the momentum shifts to the downside.

Same for The Tide.  It turned neutral last night when 3 of the 4 breadth indicators, including the Summation Index and the A-D oscillator, turned negative. The lone positive holdout was the Up-Down oscillator.  BTW, yesterday was the first time since 29 June that the Summation Index and the A-D oscillator have been negative.

So while it appears that the current rally is running out of gas, it’s not dead yet.  One of the reasons I say this is because several of my Money Flow indicators on the Dow and NASDAQ are still very positive.  As long as money continues to flow into these markets, it will be difficult for them to start a significant move to the downside. 

During the next few days, students should watch for several things to happen with the indicators: (1) The VTI should continue to decline and move out of the Up Trend Zone. (2) The two Money Flow Indicators on the Cockpit (the Coaches for the Dow (DIA) and NASDAQ (QQQ) should start to turn negative. (3) The Tide should turn negative and finally, (4) The DMIs and the Dean’s List should also start to turn negative.  Once I see the first three happen, I will start to establish my short positions.

One other thing:  Students should also watch for Emeritus to start highlighting several stocks as shorts for the Honor Roll.  Last night the Emeritus algorithm only highlighted on stock for the Honor Roll.  I need to see many.  Remember, Emeritus is a Trend algorithm, so he does his best work when the first stocks of the next down move start to trend.  By only highlighting one stock, he’s telling me not to get too excited. 

Same for the Professor.  Last night The Professor algorithm only had 8 stocks listed as shorts.  Once he starts to highlight numbers closer to 40-50, that’s when things should start to get interesting.  But right now, by only highlighting 8, he’s telling me to be patient.

Gold appears to be nearing completion of wave 2 of Major 3 up.  The VTI on GLD is showing a neutral reading of 56.21 (No Trend) with the 2-period RSI Wilder oversold at 23.76.  The recent pullback has formed a nice Blade to put on a ‘Stick’ of about 11 points.  If I add those 11 points to the recent low, it puts my target neat the 136 level.  Rifle Trades anyone?  Watch GLD on the 60s.

That’s what I’m doing,

h

Market Signals for

07-26-2016

One hour video recorded from May 28, 2016 The Professor’s Signs of a Major Market Turn – Prospectives and the Projected Timing and Levels One hour streaming video – includes webinar handouts The Professor usually holds an update class whenever the Market looks like it may be making a major turn. If you have been following the Professor’s Comments you know that a turn is due….. LEARN MORE

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