Professor’s Comments June 6, 2018
Posted by OMS at June 6th, 2018
Technology stocks on the NASDAQ and small cap issues on the Russell 2K rose yesterday while the Dow and SPX were flat. The Dow finished down 14 points at 24, 800. Volume on the NYSE was moderate, coming in at 100 percent of its 10-day moving average. There were 175 new highs and 52 new lows.
There were no changes to the VTI-volume indicators on the Dow and NASDAQ yesterday. Both indicators remain on Buy Signals.
Because of this, I used yesterday’s small intraday pullback to accumulate additional shares in stocks from the strongest sectors.
One of the reasons I was doing this is because there was a small change in the A-D oscillator yesterday, so I’m a expecting a Big Move in the Dow within the next 1-2 days. Given that both VTI-volume indicators are on Buy Signals now, that move should be up.
The Up-Down oscillator remained negative after yesterday’s trading, so The Tide is still neutral. However, I would expect this to change if the market starts to rally. The overall pattern suggests that wave ‘’e up of the triangle should be nearing completion and IF this is the case, the next move should be Wave 5 up. This wave has the potential of exceeding the 26 January high of 26,617, possibly going to the 28,000 level IF a through-over wave develops. So, with a potential rally of about 2,000+ Dow points staring me in the face, I want to be fully invested now.
I’m still favoring technology stocks on the NASDAQ and smaller cap stocks. Yesterday, with semiconductors on the Strong Sector List, I added to my Basic Position in INTL (INTC) and bought a half position in Applied Materials (AMAT). AMAT makes the equipment to manufacture semiconductors, so IF companies like INTC and MU lead the market higher like I expect, AMAT should be right there with them. The stock has been pulling back since mid-March in what appears to be a wave 2 ‘Blade’. If this is the case, it could ready to start an impulse wave for wave 3 up. The VTI-volume indicator on AMAT is on a Buy Signal.
The Sector Ratio slipped to 15-9 positive after yesterday’s session. The Strongest Sectors are Healthcare, Retail, Consumer Products, Semiconductors, Computers and Energy. The Weakest Sectors are Household Products, Telecoms, Media, Foods, and Leisure. I continue to look for opportunities to Buy and HOLD stocks in the strongest sectors.
Gold and most miners rose modestly yesterday. GLD finished up 0.48 cents at 122.85. My combination VTI-volume indicator on GLD remains on a neutral signal. GDX appears to be forming a wave 2 ‘Blade’. IF the gold mining ETF can move above its recent high of 23.06, it should turn the VTI-volume indicator positive, which would be my signal that wave 3 up is starting.
That’s what I’m doing,
h
Market Signals for
06-06-2018
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | SM CHG |
DEANs LIST | POS |
THE TIDE | NEU |
SUM IND | POS |
VTI | POS |
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