Professor’s Comments July 29, 2021
Posted by OMS at July 29th, 2021
The markets closed mixed yesterday as the Fed announced it would continue to buy $120 Billion of bonds and mortgage assets with money printed out of thin air. They also announce that they would keep interest rates unchanged which caused a late rally in the Dow and S&P, not so much in the NASDAQ. The Dow, which had been down 182 points just before the announcement, rallied after the announcement to close 128 points lower at 34,930. The NASDAQ finished with a gain of 102 points, the S&P lost less than a point. Volume on the NYSE was moderate, coming in at 99 percent of its 10-day moving average. There were 114 new highs and 28 new lows.
Once again, not much changed with the technical picture after yesterday’s session. The Dow still appears to be rising in final wave five of sub-wave 5 of Wave 5 up. If so, it should be close to finishing. However, it’s starting to look like the final top will be delayed until late August – September. The NASDAQ has been moving sideways to down for the past and appears to be forming a triangle within an Ending Diagonals or Rising Wedge. If this is the case, it could make one more thrust higher. This final rally could keep the Dow and S&P on a positive bid for the next few weeks. Because of this, we need to pay attention to the market timing indicators. As long as they remain positive, the markets will likely continue to form its top.
One thing that is happening now is a slowing of the upward momentum. The number of new highs as a percentage of the total new highs and lows has decreased to 65 percent. Also, the percentage of new highs on the NYSE, a number I calculate from my data base, is only at 3.98 percent. Back in late February and March, these numbers were consistently running above 30 percent. Just prior to the 10 May peak in the Dow, the number was just over 27 percent. So even though the market continues to push higher, the number of stocks participating in the advance continues to decrease. This is something that usually occurs just before a major change in trend.
The Market Timing Indicators for the Dow remain Neutral. The same timing indicators for the S&P and NASDAQ remain Positive.
The Scalp Trading Indicators for the Dow (DIA) and NASDAQ-100 (QQQ) remain Positive. However, the ST Volume indicator on the S&P (SPY) turned Negative making the S&P Neutral.
The Dean’s List remains Positive. The Tide remains Negative. The fact that The Tide, my primary breadth indicator, continues to remain negative during the advance since 19 July remains as major warning.
The 0-100 Sell Signal from last Thursday’s AIQ’s artificial intelligence algorithm remains unconfirmed.
The Sector Ratio weakened to 13-11 Positive after yesterday’s session. The top five strong sectors were PharmaBio (3), Semiconductors (2), Computers (2), Service (2) and Household Products (2). The top five weak sectors were Banks (-2), Transportation (-2) Energy (-2), Autos (-2) and Foods (-1).
Model Update: There were NO Changes to the Model. It remains 100 percent in cash.
Top Stocks: CROX, the Top Stock from Wednesday’s MWL, rose another 2.56 points yesterday. Since its high on 22 July, the stock appears to be forming a sideways consolidation triangle. If this is the case, the Wave 5 rally that started in late April should continue. MARA, the Bitcoin miner I recently added to the data base and ranked as #2, 1.14 points yesterday to 28.16. MP Materials (MP) at #3, another recent addition to the data base, finished with a gain of 0.41 cents. #4 MT was up 71 cents and #5 REMX was up 1.90. So, all the Top Stocks on Tuesday’s MWL finished with gains on a day when the Dow was down 128 points. How good is that? BTW, stocks 6-10 also finished with gains yesterday, including RIOT (#9) which was up 1.32.
Gold: Gold (GLD) rose 85 cents yesterday closing at 169.29. The up day moved the Market Timing Signal to Neutral from a Sell. With a Neutral Signal, it’s still possible that gold, the metal, could trade back to the 1,850 level. Yesterday, gold closed at 1,808. If the 1,790 level is broken, the metal could trade down to the 1,67o level.
Bonds: The Timing Indicators on Bonds remain Neutral. TMF was down slightly yesterday, suggesting retracement wave5 down could be starting. As I said on Tuesday, if the ST indicators turn Negative, I’ll start shorting Bonds by buying TBT. Once the signals for Bond’s turn, they usually stay that way for a while. Again, I am estimating this to be a 3–4-month trade.
Crypto Currencies and Bitcoin Mining Companies: I will be having an on-line Update Class tonight starting at 5pm ET for students who purchased the Scalp Trading Class. Because I plan to use this section of my Comments to talk more about some of the newer technologies I see coming, I will be spending a few minutes in tonight’s Class to discuss a few of these technologies, including the production of Bitcoins, that will change the way you live, travel, and conduct business in the future. Because I will be using charts that show the Scalp Trading Indicators, participation in the Class is limited to those students who purchased the Class. The fee to attend is a nominal $25, the same fee that Valerie used to charge for Update Classes at UNF. Just send Dave an email or buy the Class directly from our web site at www.themarket101 if you want to attend. The session will be recorded, so you will get a copy if you can’t attend.
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
07-29-2021
DMI (DIA) | NEG |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | NEG |
Index | Signal | Signal Date |
---|---|---|
DOW | NEU | 20 Jul 2021 |
NASDAQ | POS | 21 Jul 2021 |
GOLD | NEU | 28 Jul 2021 |
U.S. DOLLAR | NEU | 28 Jul 2021 |
BONDS | NEU | 26 Jul 2021 |
CRUDE OIL | POS | 26 Jul 2021 |
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