Professor’s Comments June 14, 2022
Posted by OMS at June 14th, 2022
For the past few weeks, I have been talking about how the market was about to start breaking down as Wave 2 up completed and Wave 3 down began. I said it would catch a lot of investors by surprise and be devastating to those who were uninformed. I think after the last four days of 270-to-880-point declines, many of you are starting to understand why I was concerned.
Here’s the thing: There’s a lot more decline coming. No, it won’t be straight down, major declines never are. There will be sharp retracement rallies along the way. Tomorrow could be one of them.
The market is EXTREMELY oversold now. After 4 days of large declines, it’s likely the market will start to bounce at some point. The A-D Oscillator came in at -251.88. Readings like this usually result in a short-term bounce. I say usually, because during several previous market crashes, the A-d oscillator hit -250 and then stayed there for several days before bouncing. There are no guarantees.
Yesterday was another 90 percent down day in terms of breadth and volume. So, if I had to bet, I’d say that the market could see a small bounce, then start dropping again. Remember, my targets are still several thousand Dow points below today’s lows. ‘From a wave count perspective, I believe the Dow is still only in the first wave of Wave 3 down. Once this wave completes, there should be a sharp rally. Then after the rally, there should be two more major declines, similar to what we saw this past week. This should give us another major opportunity to buy and/or trade inverse index ETFs. Basically, I believe that any significant bounce should be viewed as a shorting opportunity.
I still feel comfortable with the targets I had been using for the Dow m NASDAQ and RUT previously posted. For the Dow, these targets are near or BELOW the 26,500 to 28,000 level for Wave 3 down. If anything, after what I saw today, I’m thinking of lowering my lower target by another 1,000 Dow points.
Today I heard the first rumblings of something I said last week…that a 0.50 basis point increase was not enough. I talked about a raise of 0.75 basis points. Actually, I believe even more to check inflation, but the Fed will never do this. It would absolutely tank the stock market and start a severe recession, possibly a severe 1930’s style depression. People won’t be selling apples on the street, but they could be selling their Apple Computers, Apple iPhones and Apple Stock.
I’ll say it again. Protect yourself.
NO! Protect yourself!
The Dean’s List and the Tide are negative.
The Market Timing Indicators on the Dow, NASDAQ, S&P (SPY) and RUT remain negative. The Scalp Trading Indicators on the Dow, S&P (SPY), NASDAQ (QQQ) and RUT are also negative. Pay attention to the Red Arrows.
The Sector Ratio stayed at a weak 3-21 negative after Monday’s session. The top three strong sectors are Cap Goods (2), Energy (2) and Utilities (0). This is by far the weakest sector List I’ve seen in years, The top five weak sectors are Media (-7), Real Estate (-5), Semiconductors (-5), Financial (-5), and Healthcare (-5). All the weak sectors were down significantly on Monday. Continue to avoid these weak sectors as they will likely lead the market lower as Wave 3 down unfolds.
My Doctors Trade with TZA continues to shine. Yesterday, the trade was up 5.87 points, which easily paid for my cruise and then some. The profit from my inverse index ETFs not only paid for this cruise, but it also paid for a trip to the UK that Marcia and I plan to take to Cornwall in the fall. Ya got to love my Arrows/ Bias Trading Methodology. I see no reason to change anything now.
So my Best Bets are still the inverse index ETFs. Especially on any rallies.
Still no change in my comments on Bonds, crypto, or gold. I still don’t see any reason to own them now.
That’s what I’m doing,
h
Another at-sea day tomorrow. On our way to St Kitts for London’s snorkeling adventure.
Market Signals for
06-14-2022
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
A/D OSC | |
DEANs LIST | NEG |
THE TIDE | NEG |
Index | Signal | Signal Date |
---|---|---|
DOW | NEG | 09 Jun 2022 |
NASDAQ | NEG | 09 Jun 2022 |
GOLD | NEG | 13 Jun 2022 |
U.S. DOLLAR | POS | 13 Jun 2022 |
BONDS | NEG | 02 Jun 2022 |
CRUDE OIL | POS | 12 May 2022 |
CRYPTO | NEG | 08 Jun 2022 |
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