Professor’s Comments Ocotber 20, 2017

Posted by OMS  at October 20th, 2017

The markets were mixed again yesterday.  The Dow finished up 5 points at 23,163 after falling 105 points at the open.  The NASDAQ was down 19 points and the SPX was flat, up 0.84 points.  Volume on the NYSE was moderate, coming in at 103 percent of its 10-day average.  There were 123 new highs and 36 new lows.

There were no changes to the cockpit indicators after yesterday’s session.  The DMIs, both Coaches (Money Flow), and the Dean’s List remain positive. My VTI-volume indicator on the Dow and NASDAQ is still positive. The Tide remains negative.  All these indicators will need to turn negative before a top can be confirmed.

Yesterday, I mentioned that the Money Flow indicator on the NASDAQ while positive, was close to turning negative.  The reason I’m watching this indicator now is because of what happened yesterday.  As long this indicator remains positive, money will continue to flow into the market and early declines will attract buyers.  The declines won’t be sustained until money starts to leave the market and the Money Flow indicators turn negative.  This is not happening yet.

There was another small change in the A-D oscillator last night, so we need to be on the lookout for another Big Move within the next 1-2 days.

Thursday’s Sector Report strengthened slightly.  The Sector Ratio rose to 19-5 positive. The Strong Sector List continues to be dominated by the Semis, Cap Equipment, PharmaBio, Material and Computers. The Weak Sectors are led by Household Products, Media, Telecoms, Consumer Products and Healthcare.  BTW, all four stocks in the Household Products Sector (CP, CLX, KMB, and PG) were down significantly yesterday.  So, on Wednesday’s big up day in the Dow, we saw how stocks like INTC and MU from the strong semiconductor sector lead the market higher. Then on yesterday’s flat to down day, we saw how all four stocks from the weakest sector were a drag on the market.  Hmmm?  Pay attention to the Sector Report.  Stay in the Strong Sectors and avoid (or short) the Weak Sectors.

I’m still not seeing any big changes in Trend Scores from any of the sectors.  Most Trend Scores in the Strong Sectors remain positive.  The two strong sectors with negative Trend Scores are FoodDrug and Retail.  So, with 17 out of 19 Strong Sectors still showing positive Trend Scores, it’s unlikely that any significant decline will begin until these Trend Scores turn negative. BTW, seeing sectors like FoodDrug and Retail with negative Trend Scores does not mean that stocks in these sectors should be sold. No, they’re still strong sectors. All it means is that the sectors are starting to weaken. If they fall off the list and move to the Weak Sector list, that’s a different story. The important thing to note here is that the market still has 19 strong sectors. That’s the really important take away. 

Students should watch the Money Flow indicators (The Coaches), the Sector Ratio and the Trend Scores in the days ahead.  As long as these indicators remain positive, the markets should remain strong as they complete their topping patterns.  When these indicators start to turn negative, that’s when the trouble will start.

Gold (GLD) rose 0.72 cents yesterday to 122.39.  The volume portion of my VTI-volume indicator turned positive yesterday, making the indicator neutral again.  The pattern on GLD is still unclear, so I’m avoiding the metal for now.

That’s what I’m doing,

h

Market Signals for

10-20-2017

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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