Professor’s Comments November 29, 2016
Posted by OMS at November 29th, 2016
The Dow fell 54 points, closing at 19,098. Volume was moderate, coming in at 93 percent of its 10-day average. There were 136 new highs and 16 new lows.
Even though the markets traded down yesterday, the decline did not produce any negative changes to the cockpit indicators. The bullish bias associated with end of month mutual fund trading and the Thanksgiving Holiday will likely remain for another few days before the top I’m expecting is in. Continue to watch the cockpit indicators and Lists for changes.
BTW, there is a lot of bullish sentiment built into the market now, so a lot of traders are going to be surprised and caught off guard when the next Bear market begins. Don’t be one of them. As long as The Tide and the Dean’s List remain positive, the market will likely maintain its positive bias. But I would not be surprised to see some of the cockpit indicators start to change later this week.
From a pattern perspective, all the major indexes have reached their trading targets. I have been using 19,000 as my trading target and 19 200+ as its theoretical target.
On Friday, the Dow came within 48 points of its theoretical target, getting as high as 19,152. It backed off a bit yesterday, but will likely try to retest this high before starting to decline.
One of the stocks I will be watching closely today is Amazon.com (AMZN). Last night, Emeritus highlighted the stock as a short for the Honor Roll. This is the first stock highlighted by the algorithm since the election. The reason I find AMZN interesting is because it was one of the stocks that led the market higher when the current rally started in February. Back then AMZN was trading at 475. The rally leg that took AMZN from 475 to where it topped on 6 October at 847 appears to be the final wave ‘e’ of an Ending Diagonal Pattern. So, the target for AMZN is near the 475 level or where the rally began. The chart for AMZN suggests there might be some backing and filling during the next few days, but after that, a test of support at the 200-day moving average (near 720), could be in the cards. If this happens, it will shake up more than a few traders.
Gold, mining stocks, and Bonds all had a nice day yesterday as the Dollar declined. Take a mental picture of what happened yesterday with the metals and Bonds. I think this is what you’re going to see more of in the weeks ahead, once the equity market starts to decline.
The indicators are still telling me to be patient with gold and the miners. The VTI on GLD has still not turned positive yet, but some of my Money Flow indicators are now heading up.
UUP, the ETF for the U.S. Dollar remains the key stock (ETF) to watch for gold traders. Yesterday the VTI on UUP was flat as the ETF dropped 0.07 cents to 26.17. A break below the 14 November low of 25.80 would be very negative at this point. UUP would likely drop off the Dean’s list below 25.80 and cause UDN, the inverse Dollar ETF to appear. This would be great news for gold traders!
Watching.
That’s what I’m doing,
h
Market Signals for
11-29-2016
DMI (DIA) | POS |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
SUM IND | POS |
VTI | POS-T |
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