Professor’s Comments May 17, 2019
Posted by OMS at May 17th, 2019
The markets rose yesterday in what appeared to a small corrective rally within a larger declining A-B-C pattern. The Dow finished with a gain of 215 points, closing at 25,863. The NASDAQ and SPX finished up 76 and 25 points, respectively. Volume on the NYSE was moderate, coming in at 98 percent of its 10-day moving average. There were 176 new highs and 43 new lows.
If you look at a 15-minute chart of the Dow, it appears the last three days of rally have formed a small wave ‘b’ up in an a-b-c pattern within Wave ‘B’ down. If this is the case, the Dow could still decline to the 25,200 or lower once this ‘b’ wave up completes, and wave ‘c’ down begins.
Yesterday’s rally did not produce a significant increase in the volume portion of my VTI-volume indicator. So, without a substantial increase in volume, it’s hard for me to believe the next leg up of the larger pattern, Wave ‘C’ up, has begun. It’s far more likely that yesterday’s rally was the completion of a smaller wave within Wave ‘B’ down. However, I still wouldn’t give more than 50-50 odds for either scenario at this point.
There were NO CHANGES to my market timing indicators after yesterday’s session. The Dow, NASDAQ, SPX, and Russell 2K remain on Neutral Signals.
The Tide and the Dean’s List turned Neutral after yesterday’s session. The DMIs remain Negative.
The Sector Ratio increased to 13-11 negative after yesterday’s session. By continuing to stay negative after three consecutive days of rally, the Sector Ratio is not supporting a significant move higher. With an overbought market and less than half the sectors participating, it’s more likely that the markets will either rest or decline from current levels. The Strong List was led by Real Estate, Insurance, Household Products, Food Drugs and Foods. The Weak Sector List was led by Service, Energy, Material, Retail, and Banks.
Model Portfolio: The Model bought a small ‘trial’ position (500 shares) of DXD, a 2X inverse leveraged ETF for the Dow, near the close of yesterday’s session. Price paid for the shares was 28.23. These shares were bought after seeing overbought conditions on the Dow’s 2-period RSI (over 80) without a trend in place. If the Dow begins to decline, the Model will add to these ‘trial’ shares but only if the timing indicators turn negative.
The Model continues to hold a small ‘trial’ position in SCO, the inverse ETF for West Texas Crude Oil. The rest of the Model Portfolio, $77,364, remains in cash.
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.
That’s what I’m doing,
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Market Signals for
05-17-2019
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | NEU |
Index | Signal | Signal Date |
---|---|---|
DOW | NEU | 10 May 2019 |
NASDAQ | NEU | 06 May 2019 |
GOLD | NEU | 06 May 2019 |
U.S. DOLLAR | POS | 16 May 2019 |
BONDS | POS | 01 May 2019 |
CRUDE OIL | NEU | 06 May 2019 |
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
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Category: Professor's Comments