Professor’s Comments October 16, 2013
Posted by OMS at October 16th, 2013
The Dow fell 134 points, closing at 15,166. Volume was slightly heavier than normal, coming in at 107 percent of its 10 day average. There were 160 new highs and only 55 new lows.
Yesterday’s decline appeared to be nothing more than a small correction within a larger wave up. After the Dow gained about 600 points since last week, the correction was due. And with a ‘relatively’ small change signal from the A-D oscillator on the Board, it turned the correction into a 134 point move. The move did nothing to change basic pattern or the cockpit indicators, which remain on Buy Signals.
The Dean’s List also remains positive. The top of the List is being dominated by the oil and gas ETFs, like XOP, PXE, PWB, and DIG. PXJ is slightly below the leaders. The Dean continues to tell us where the strength is in this market.
Once we get through all this short term silliness that is going on in Washington, I fully expect the markets will continue to rally as Major Wave E Up unfolds. My target for current rally wave on the S&P is above the 1725 level, possibly 1730 or even higher. After that I expect some type of pullback. The combination of the rise and pullback will then form the Hockey Stick pattern that will enable me to make a final projection for Wave E up. Right now, I’m still thinking that the Dow will finish somewhere between 16,000 -!7,000.
One of the things that you might want to look at today is a 60 min chart of the Dow, DIA.
As many of you know I will be doing a webinar on 17 October for AIQ systems. The webinar is about Trading the Turns, or as students who have taken my PT Class at UNF know it, Best Time to Trade #1. In preparation for that webinar, I have been gathering several examples of stocks that have the classic TLB Pattern which starts the turn.
Recently I have been talking about a few of these stocks like AAPL and SNP, that have this pattern.
But yesterday, while I was watching the Dow on the Daily’s, I switched to a 60 min chart and surprise, surprise, there it was. A picture perfect TLB pattern, complete with Rope Jump, a 2 wave pullback and narrow bands.
Now all that needs to happen is for the price to start moving up, which will pull the 50 above the 200 and enable the DIA to move into an Uptrend.
Speaking of Utrends, are you watching Apple? Yesterday the stock popped 2.64 points …on a day when the Dow dropped 134. The thing you should note about the stock is that it has now moved into an Uptrend. You might want to contrast the trading action in AAPL yesterday to the trading action in China Pete, SNP. China Pete has almost the exact same pattern as AAPL with one big difference. AAPL is now in an Uptrend; SNP is still in a downtrend. AAPL goes up 2.64 points on a down day in the market, SNP falls 0.89 cents along with the market.
BTW, I don’t know if you caught it or not, but Apple was highlighted by Emeritus last night and placed on the honor Roll. It was the only stock highlighted.
I’m not going to be doing much trading today. I have a Basic Class that is starting at 6:30 tonight at UNF. I’m really looking forward to getting back into the Classroom.
Besides, at this point I’m about 90 percent invested, with 10 percent in cash. I still don’t own any gold, and that’s why I’m saving some of my cash. I mention this today so that you have a feeling for how I’m managing my assets to support my Bullish bias. So all I’m doing now is waiting for some type of deal to get done on the debt ceiling, and the shutdown. If this happens, the pattern that I talked about on the Dow should start to take hold and move the markets higher.
That’s what I’m doing,
h
Market Signals for 10-16-2013 |
|
---|---|
DMI (DIA) | POS |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
All of the commentary expressed in this site and any attachments are opinions of the author, subject to change, and provided for educational purposes only. Nothing in this commentary or any attachments should be considered as trading advice. Trading any financial instrument is RISKY and may result in loss of capital including loss of principal. Past performance is not indicative of future results. Always understand the RISK before you trade.
Category: Professor's Comments