Professor’s Comments September 10, 2019
Posted by OMS at September 10th, 2019
The markets were mixed yesterday with large cap Dow stocks closing slightly higher while technology stocks on the NASDAQ declined. The Dow finished with a gain of 38 points, closing at 26,835. The NASDAQ was down 16 points; the SPX was flat. Volume on the NYSE was heavy, coming in at 120 percent of its 10-day moving average. There were 118 new highs and 16 new lows.
The markets still appear to be tracing out the final waves of a 3-3-5 zig-zag pattern for Wave 2 up. Once this pattern completes, stocks should begin a significant decline working their way back down to the December 2018 lows. All I’m doing now is waiting for the market timing signals to turn negative.
The Dow is at a critical point for the zig-zag pattern. As I mentioned in the WSR, the Dow and SPX have now retraced 0.78 of Wave 1 down, which is a maximum common retracement number. IF the Dow continues to rise, it would suggest that another test of the 15 July high of 23,365 is in the cards. This would mean that the July high was NOT the completion of Wave ‘E’ up, but just Wave ‘A’ up of an A-B-C pattern for final Wave ‘E’ up. If this is the case, it would delay the decline I see coming for several weeks. However, given that Wave 1 down was a clear five wave decline, suggesting the primary trend has shifted to the downside, AND the fact that the Dow is overbought (2-period RSI at 98.4) with NO Trend in place (CCI at 65.6), I MUST give the highest probability outcome to the zig-zag pattern for Wave 2 up.
There was another small change in the A-D oscillator yesterday so we need to be on the lookout for a Big Move within the next 1-2-days.
The market timing indicator on the Dow remains Positive. The NASDAQ, SPX, and Russel 2K are on Neutral Signals. So, the signals are still mixed, which is usually a good indication that a corrective rally is underway.
The Tide and Dean’s List are Positive.
The Sector Ratio improved to 18-6 Positive after yesterday’s session. The RS ratings of the Sectors on the Strong List are still mostly 1s and zeros. Only the top 4 Sectors are really showing any sort of strength, so one decent down day could produce a significant change in the Ratio.
The Strong Sector List was led by Service, FoodDrugs, Semiconductors, Household Products, and Telecoms. The Semis are the still the only ‘aggressive’ sector on the Strong List. All the others are ‘defensive’. The Weak Sector List was led by Leisure, Utilities, PharmaBio, Real Estate and Autos.
Gold (GLD) dropped 0.53 cents yesterday to 141.38. The 2-period RSI on GLD closed with an oversold reading of 10.75 with a CCI of 25.6. With readings like this, I would expect gold to bounce before resuming the next wave down of its Wave 4 correction. All I’m doing now with gold is watching and waiting for Wave 4 down to play out. My target for Wave 4 down on GLD is near or slightly below the 50-day moving average of 138.5.
Model Portfolio: The Model continues to hold 1,200 shares of DXD and 1,000 shares of SQQQ. Available cash remains at $62,974. The Model continues to look for high probability trades to put its cash to work.
After the past few days of rally which caused the Model’s inverse positions to decline, the Model is up 25.5 percent, which translates to an annualized gain of 53 percent.
The Model Portfolio is being shown for educational purposed only. The Buy/Sell actions in the Model Portfolio are made based on technical indicators that can and do change frequently and should NOT be considered as recommendations for trading an actual portfolio. Any gain or loss in the Model Portfolio should not be used to predict future performance of the Model.
That’s what I’m doing,
h
Market Signals for
09-10-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | SM CHG |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 05 Sep 2019 |
NASDAQ | NEU | 06 Sep 2019 |
GOLD | NEU | 05 Sep 2019 |
U.S. DOLLAR | POS | 29 Aug 2019 |
BONDS | POS | 23 Aug 2019 |
CRUDE OIL | NEU | 04 Sep 2019 |
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