Professor’s Comments October 26, 2016
Posted by OMS at October 26th, 2016
The Dow fell 54 points, closing at 18,169. Volume was heavy, coming in at 113 percent of its 10-day average. There were 73 new highs and 33 new lows.
Not much changed after yesterday’s trading. Stocks continue to trade in a narrow range, bouncing from overbought to oversold conditions.
Yesterday’s decline came after the Dow had an oversold reading of 80.1 on the 2-period RSI with No Trend showing on the VTI. As long as the Dow remains in a trading range, between 18,050 and 18,600, buying and selling index ETFs when the Dow is oversold or overbought and No Trend is showing on the VTI remains my preferred strategy.
From an overall pattern perspective, yesterday’s decline still appears to be part of a five wave down sequence for Wave ‘D’ down. Once (IF) 18,050 is broken to the downside, the Dow should fall to the 17,700 to complete wave ‘D’ down.
The Tide turned back to negative again yesterday. For the past few weeks, as the market traded within a very narrow range, The Tide has been flip-flopping from negative to neutral. As long as The Tide does not turn positive, I continue to hold inverse index ETFs.
On the other hand, IF 18,300 is broken on the upside now and The Tide turns positive, it’s likely that Wave ‘E’ up has started. This rally wave should break through the upper boundary of the trading range (18,600) and take the Dow to new highs.
Gold rose and the Dollar fell slightly yesterday. GLD rose 0.91 cents to 121.47. After forming a small Hockey Stick pattern, it’s likely that GLD is breaking out of the small ‘Blade’ it has been forming for the past few days and is about to test its 50-day moving average now near the 123.5 level. This is a critical level for GLD because if it can move above 123.5, it would ‘Jump the Ropes’ after forming a TLB Pattern. A move above 123.5 would signal that a major new rally wave in gold and mining stocks is starting.
I’m still watching for a downside break the 18,050 level on the Dow and a move above 123.5 on GLD.
That’s what I’m doing.
h
Market Signals for
10-26-2016
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | NEG |
SUM IND | NEG |
VTI | NEG |
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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The Hockey Stick Pattern
The Creation of Waves and Trends
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Category: Professor's Comments