Professor’s Comments November 18, 2015

Posted by OMS  at November 18th, 2015

The Dow rallied early, getting as high as 17,599 before pulling back to close up 6 points at 17,490.  Volume was moderate, coming in at 106 percent of its 10-day average.  There were 30 new highs and 130 new lows.

As long as the Dow stays below the key 17,668 level I mentioned yesterday, the odds remain high that the current rally is wave 4 up of Wave 1 down of Major Wave 3 down.  If this wave count is correct, once wave 4 completes, the Dow should fall below Monday’s low of 17,210 to complete Wave 1 down probably near 17,000-17,100.

If this happens, the next rally wave (Wave 2 up) should take the Dow up back to the 17,500+ level before the move toward 16,000 begins.

If the Dow starts to rally and breaks 17,668 on the upside, it will negate my primary scenario.  If this happens, it will likely mean that the Dow will retest the 18,300 level before the next major down wave begins.

So right now, 17,668 is critical to determining the markets next move.  As long as the Dow stays below this level, I will be looking to short all rallies. But just remember that even though the current wave count suggests a fall to the 17,000 level, it should be followed by a Wave 2 rally back to 17,500. In other words, you will need to stay on your toes to make money in this choppy market until Waves 1 and 2 are complete.

That’s what I’m doing,

h

Market Signals for

11-18-2015

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The Hockey Stick Pattern
The Creation of Waves and Trends
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