Professor’s Comments June 20, 2017
Posted by OMS at June 20th, 2017
The Dow rose 145 points yesterday, closing at 21,529. Volume on the NYSE was low, coming in at 89 percent of its 10-day average. There were 223 new highs and 32 new lows.
After yesterday’s impulsive action, I must assume that Wave ‘E’ up is underway and nearing completion. This wave should be the final wave of the Ending Diagonal Pattern.
This large Ending Diagonal Pattern is also the final fifth wave of the Bull Market rally that started in March 2009.
Confirmation that this final fifth wave has ended will be when the cockpit indicators start to show Sell Signals. Right now, the only cockpit indicator supporting a Sell Signal is the technology laden NASDAQ (QQQ). The DMI on the QQQ turned negative on 9 June.
Yesterday the NASDAQ (QQQ) rallied 2.31 points along with the Dow. However, the rally did not change the DMI. It’s still negative. All yesterday’s rally did was continue to develop the ‘Blade’ of a negative Hockey Stick Pattern. Once this ‘Blade’ completes, the NASDAQ should resume its downward path, taking the other indexes with it.
Stocks usually start major turns within a day or so of a major Fibonacci turn date. But right now I don’t see any Fibonacci turn dates on the horizon. However, today is a major Bradley turn date, which is far less accurate. Markets can turn anywhere from a few days to a week after a Bradley date. This is one of the reasons I have been watching mid-June for a possible turn.
I still can’t totally eliminate my irregular 3-3-5 irregular flat scenario, but after seeing yesterday’s impulsive action, the odds of this scenario occurring are very low. The Dow would have to start dropping hard and soon if wave ‘c’ of Major ‘D’ down is going to take place. I don’t think this will happen.
The reason I mention this scenario at all is because of what it means for the equity markets. If Major Wave ‘D’ down is not going to occur, it means that there won’t be a final Wave ‘E’ up after ‘D’ down completes. In other words, the current rally wave is the final rally. Once this rally finishes, all five waves of the Ending Diagonal pattern AND the Major Bull Market that started in 2009 are complete. So, we need to stay on our toes and pay attention to any new Sell Signals from the cockpit. They could be signaling the start of a Major Bear Market that could last 3-4 years.
Yesterday’s Sector Report strengthened slightly. The report showed 20 strong and 4 weak sectors. Leisure, Computer, Healthcare, Insurance and Financials lead the strong sector list, with Energy, Autos, and Utilities lagging.
Gold stocks were flat yesterday. The short-term pattern on gold continues to suggest that it has completed wave ’b’ up of an a-b-c pattern for Wave 2. Once wave ‘c’ down completes, gold prices should begin a significant Wave 3 rally. Please be careful with gold shares now because even though this retracement should be a minor wave 2, it has the potential to drop GLD below its 9 May low of 115.56. The DMI on GLD is now negative. The VTI is also negative with a reading of 43.5.
That’s what I’m doing,
h
Market Signals for
06-20-2017
DMI (DIA) | POS |
DMI (QQQ) | NEG |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | POS |
SUM IND | POS |
VTI | POS |
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
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