Professor’s Comments May 7, 2019

Posted by OMS  at May 7th, 2019

The markets had a wild crazy ride yesterday, falling 472 points at the open and then recovering all but 66 of those points by the close. The Dow finished at 26,438.   The NASDAQ and SPX finished down 41 and 13 points, respectively. Volume on the NYSE was moderate, coming in at 93 percent of its 10-day moving average. There were 112 new highs and 26 new lows.

There’s a lot going on in the world right now which is causing extreme volatility in the markets.  During the weekend, Israel was attacked by Iranian Jihadists with rockets.  The U.S. sent an aircraft carrier to the Persian Gulf area.  North Korea launched another missile.  And trade talks with China appeared to break down after President Trump raised tariffs 25 percent on more Chinese products.  So, equities fell, crude oil spiked, gold was flat (?), but nothing really changed with the overall patterns.  The Ending Diagonal pattern on the Dow still appears to be in the process of completing.  At the end of the day, the patterns should win out.  With the 8-15 May Fibonacci cluster window fast approaching, I still believe we need to be concerned about the market’s potential to put in a significant top during that period, possibly sooner now that the timing signals have turned Neutral.  

BTW, yesterday’s early decline could have been wave ‘d’ down within the Ending Diagonal on the Dow, making yesterday’s afternoon rally the start of final wave ‘e’ up.  If the is the case, the top could occur anytime in the Fibonacci cluster zone. Or the Ending Diagonal pattern could truncate and begin falling at any time. Watch the signals!

Yesterday’s decline caused the market timing indicator on the NASDAQ to turn Neutral, joining the Dow, SPX and Russell 2K on a Neutral Signal.

The Tide remains Negative. The Dean’s List remains positive.

One of the major things that happened yesterday was the change in the Sector Ratio.  It turned negative for the first time since early January.  So now, at 13-11 negative, most sectors in the S&P 500 are declining.

The Strong List was led by Real Estate, Foods, Household Products, Financials, and Insurance.  The Weak Sector List was led by Service, Energy, Healthcare, Material, and Telecoms.

Model Portfolio:  The following changes were made to the Model Portfolio after yesterday’s session.  The Model purchased a full position (1,667 shares) of SCO, the 2X inverse leveraged ETF for West Texas Crude Oil. Price paid was $15.74 per share.  Also, in the late afternoon when it appeared that the market timing signal for Gold was about to turn Neutral, the Model bought a small ‘trial’ position (500 shares) in NUGT, a highly leveraged gold ETF.  Price paid for the shares was 14.41.  The Model’s cash position is now $71,807 as it awaits further changes to the market timing signals.

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

05-07-2019

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

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The Hockey Stick Pattern
The Creation of Waves and Trends
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