Professor’s Comments July 30, 2015
Posted by OMS at July 30th, 2015
The Dow rose 121 points, closing at 17,751. Volume was heavy, coming in at 110 percent of its 10-day average. There were 65 new highs and 81 new lows.
Yesterday’s retracement rally put the Dow at the mid-point of the range I talked about in the Wednesday’s Comments. So when the Dow got close to 17,750, I started to buy a few inverse index ETFs.
I now have positions in DXD, QID, and a small ’trial’ position in GDX.
Yesterday’s rally caused several of the cockpit indicators to turn positive. One of these was The Tide, although to be honest, it’s barely positive. But it did change from negative to positive during this retracement rally, without passing through neutral, which is a little strange.
Also, the DMI on QQQ turned positive yesterday, so I stopped by The Professor’s office to see if he saw a new up trend starting. Apparently he didn’t because the sign on the door said ‘Go Away – only 29 new longs”.
Anyhow, with mixed signals on the cockpit and a positive Tide, all I will be doing now is holding the inverse index positions I established yesterday. I will look to add to them when the indicators turn negative again.
BTW, it’s normal for the cockpit indicators to turn mixed on a retracement rally. They first turn negative on a wave 1 down, then turn mixed on the wave 2 retracement. This is why I will be watching the indicators very closely now, because a negative turn will likely be signaling that the impulse wave is starting.
With August fast approaching, I’m still watching gold. Several of my favorite gold stocks produced short-term trading Buy signals during the past few days. This tells me that gold could be getting ready to rally. But right now, without GLD or a few other gold stocks or ETFs on the Dean’s List, I’m content just to hold my ‘trial’ position in GDX. I’m just being patient.
Here’s the thing: I don’t believe there is any hurry to do anything beyond establishing small positions now, either with the market or with gold. IF I’m right, the next move in gold should be a strong wave 5 up. It could take gold to new highs. Same for the major indexes, which should start to break down very soon as wave 3 of 3 down unfolds. Both moves should be significant. I’m NOT worried about missing the train. I’m just waiting for the indicators to call ‘All Aboard’.
That’s what I’m doing,
h
Market Signals for 07-30-2015 |
|
---|---|
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | NEG |
A/D OSC | |
DEANs LIST | NEG |
THE TIDE | POS |
SUM IND | POS |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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Category: Professor's Comments