Professor’s Comments November 9, 2021
Posted by OMS at November 9th, 2021
Yesterday was a mixed day for the indexes. The Dow rallied to a new intraday high of 36,565. The S&P also rallied but did not confirm the new high on the Dow. Technology stocks on the NASDAQ lagged both indexes and closed lower on the day. Tesla (TSLA) had a lot to do with the NASDAQ’s decline as it dropped 59 points, closing at 1162.94, The reason I mention TSLA this morning is because it has been on a tear since it generated a confirmed Green Arrow on 22 September at the 734 level. Yesterday, it generated its first Red Arrow since the Buy Signal. However, the signal is NOT confirmed. If the signal is confirmed during the next few days, it could start to put pressure on the NASDASQ, which BTW is still on a Green Arrow.
One thing I found interesting about yesterday’s early rally was the breadth. The day started out with an EXTREMELY positive 3:3 to 1 A/D ratio. However, by the close the advancing issues only had a slight edge over the decliners, 1.1 to 1. That’s pretty weak. It tells me that the rally could be running out of gas. As most of you know, I’ve been looking for a top near 36,500+ on the Dow, with a possible Fibonacci target somewhere between 36,600 – 36,750. So, seeing the breadth decline into yesterday’s close was important to note. At this point, the indicators are still positive, but we’ll need to be on our toes during the next few days and watch for any changes.
BTW, market sentiment is now running at an all time high….the highest since 2000 as measured by AAII’s Individual Investors portfolio index. After the individual index peaked in 2000, the NASDAQ lost over 35 percent of its value in a little over a month. Tech stocks were down over 40 percent two months later. That’s why seeing TSLA generate a Red Arrow caught my attention last night. I remember 2000 well.
The Market Timing Indicators for the Dow (DIA), S&P (SPY), and NASDAQ (QQQ) remain Positive.
The Scalp Trading Indicators for the Dow (DIA), S&P (SPY), and NASDAQ (QQQ) are also Positive.
The Dean’s List and the Tide remain Positive.
The Sector Ratio weakened slightly to 19-5 Positive after yesterday’s session. The top five strong sectors were Semiconductors (7), Service (7), Autos (6), Energy (4), and Retail (4).
The top five weak sectors were Telecoms (-1), Media (-1), Utilities (-1), PharmaBio (-1) and Insurance (0).
Top Stocks: Magic mirror on the wall, which stock is the fairest of them all? Answer: MARA, MARA, MARA!!!! Yesterday, the Top Stock from last week’s MWL bolted higher after resting for a few days. The stock was up over 6 points at the open, and continued to rally, finishing the day with an 11.48 point gain at 75.3. MARA, MARA, MARA!!!
Since breaking out of its triangle pattern and generating a confirmed Green Arrow on 5 October at 34.2, the stock has never looked back. Now it’s at 75, and the Dailies are STILL showing a Green Arrow. One of the things I talked about with MARA when it was still developing its triangle was its 26 point+ “stick’. So now that the stock is up over 40 points since the breakout, we need to be watching for Red Arrows. I don’t think they will appear today as MARA is up another 7 points in the pre-market. But you never can tell.
What? You STILL don’t have the arrows? Are you kidding me??? What are you waiting for? Hey, here’s an email I received yesterday from Lucas. Most of you know him from Class. Here’s what Lucas wrote:
Professor,
I just want to share the success I have been having using the arrows with options. I have been watching stocks and etfs that have bullish patterns as well as top 5 on the members watchlist and buying at-the-money calls when I see the green arrow on the 2hour bars then selling the calls when I see a red arrow. I know you see these moves in MARA and RIOT today….I sold my calls but was nearly up 400% in both names so had to take profits. It almost feels like cheating! This method, along with scalping actual shares of stock on the 12s when I have a green arrow on the two hour bars has really been a winning strategy.
I hope that everyone else is enjoying the same success that I am.
I do too Lucas, but I’m not sure about some of my subscribers. Many of them are still using obsolete trading platforms, like Schwab, Fidelity, and Trade Station…platforms that don’t have my new Arrows. I even offered them a discount of $199 to get them to convert, but it’s been tough. (BTW, I’ll still honor the dog ate my email excuse until next weekend. After that the price will go up to $399.)
OK, so you missed MARA. What about #4 NVDA? It was up another 10.5 points yesterday. The stock generated its Green Arrow on 7 October at 203. Yesterday it closed at 308.4. It’s still on a Green Arow. Check out your trading screen. If you don’t see the Green Arrow, you’re using an obsolete platform.
OK, what about the other two top stocks, BBBY and DDS. Both stocks pulled back yesterday. Is it time to sell? Hmmm? Check the arrows. Oh, you don’t have them. Hmmm? Oh well. Here’s something you should think about. DDS, a classic meme stock (translated that means ‘junk’) generated a Green Arrow on 1 November at 234.8. Yesterday, it closed at 299. Junk? Maybe, but I’ll take those 65 points any day of the week.
Same for BBBY, another piece of junk. The stock, which has been high on the MWL lately, generated a Green Arrow on 1 November at 14.17. Yesterday it closed at 21.67. Junk? I’ll take those 7.5 points trading junk any day of the week.
See, I don’t care if a stock is a piece of junk or not. Doesn’t bother me a bit. All I care about is seeing the stock at the top of my List and on a confirmed Green Arrow. That’s it. It’s simple. If I missed the initial trade, I could always enter the trade on the shorter term bars, like the 12s, 15s or 120 min bars on a Green Arrow. If the stock is highly ranked on the MWL and on a Green Arrow on the Daily bars, I’m OK with buying it on the shorter term bars on Green Arrows. Since MARA generated its Daily Green Arrow on 5 October, there have been no less that 7 Green Arrows on the 120 min bars that gave you an opportunity to enter the trade. Does you trading platform do this? It doesn’t if you don’t have the Arrows.
What about Ford (F). I have several subscribers that are involved in car dealerships and like Ford. So when it appeared near the top of the MWL last week, a lot of them got excited. Ford generated a Green Arrow on 23 September near the 13 level. It generated another Green Arrow on 28 October near 16.5. Yesterday the stock closed at 20.15. OK, so let’s say you don’t like to use the MWL You just like to trade your favorite stocks. You just feel more comfortable with them. (Huh?) Maybe you’re in retirement and just want to manage the stocks you’ve accumulated over the years. Did you know that if you had the Arrows and traded Ford on the Weekly bars, without doing anything else, no lists, no indicators, no nothing…just the Arrows, you would have traded Ford a total of 5 times since January. The first trade would have put you in Ford at 8.86 on 13 January. A Red Arrow took you out at 11.86. The next Green Arrow would have put you back in at 11.82 on 5 May. A Red Arrow took you out on 28 June at 14.56. Then after being on the sidelines for 3 months while the stock declined, another Green Arrow appeared on 20 September with the stock at 13.11. If you followed this Green Arrow, you would still be in the stock at 20.15. Bottom Line: If you paid attention to the Arrows on the Weekly bars…and NOTHING ELSE, no lists, no indicators, phase of the moon, TV ads, newsletter advice…NOTHING. You would have made a total of about 12.78 points which is a gain of 145 percent on your initial investment, so far this year. Just by following the Arrows! That’s something to think about when you compare the gain to the interest rates you’re currently getting from your CDs at the local bank. Five trades, no shorts, just simple in and out trading when a Red Arrow warns of danger, would have given you a return of 145 percent (not including taxes). Think about that. Then get the Arrows.
Don’t wait too long. The ‘dog ate my email’ excuse will only be good for the rest of the week.
I really don’t have much to say about gold, silver, bonds or the Dollar. I haven’t forgotten about them, but with the cryptos dominating the MWL and Dean’s List, all I can say is why bother? Keep your eye on the indexes and watch for Red Arrows.
That’s what I’m doing.
h
Market Signals for
11-09-2021
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | SM CHG |
DEANs LIST | POS |
THE TIDE | POS |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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Category: Professor's Comments