Professor’s Comments September 11, 2018
Posted by OMS at September 11th, 2018
The markets were mixed again yesterday. The Dow was down 59 points, closing at 25,857. The NASDAQ finished up 22 points while the DPX was down 5. Volume on the NYSE was moderate, coming in at 94 percent of its 10-day moving average. There were 99 new highs and 89 new lows.
Yesterday, the SPX closed at 2,877 after getting as low as 2,876. Students should continue to watch the 2,850 level. A break of this level would project significantly lower prices for the SPX, possibly down to the 2,580 level. The reason I continue to mention the 2,850 level on the SPX is because even though the Transportation Index and other markets are at or near all-time highs, the internals are weakening. The Tide turned negative on 4 September and trading against the Tide is NEVER a good thing. So, when The Tide turns negative, we MUST watch for changes in our market timing signals. These signals are based on volume and price momentum. So, if the breadth of the market (The Tide) has turned down, the one thing you don’t want to see if you’re long is momentum start to increase to the downside. This usually leads to a significant correction.
Students should also note that the Dow is no longer in the Trend Mode. In other words, the Trend on the Dow that has been in place since 17 August is over. Students can see this by looking at a 35-period CCI on the Dow. Without a Trend in place, students should ask themselves why they are putting their money at risk by holding long positions? Without a trend in place, the market will likely bounce between overbought and oversold conditions until a new Trend develops. The danger of course is that as the market bounces between overbought and oversold, the next time it becomes oversold, the CCI could move into the Trend Zone, causing the market to trade significantly lower. So be careful…this is not the time to be aggressive.
There were several changes to the VTI-volume indicators after yesterday’s trading. The Dow moved to a Neutral Signal as the volume portion of the VTI-volume indicator turned negative. The NASDAQ remains on a Sell Signal. New Sell signals were generated for gold and crude oil, although the Sell Signal on gold is extremely weak.
BTW, we’re currently having problems displaying the market timing signals on the cockpit. Please disregard the displayed signals until the software is corrected.
The Sector Ratio remained at 18-6 positive after yesterday’s session. As mentioned previously, the strong ratio is somewhat misleading because the Relative Strength of most sectors on the Strong List is still extremely low, mostly 1s and zeros. The only strength I see is in the top three Sectors, which are FoodDrugs, Transportation, and PharmaBio. BTW, the Transportation Index made a new high yesterday. Transportation has been in the top 5 sectors for the past 6 weeks. Household Products and Insurance are also in the top 5 sectors.
The Weak Sector List was led by Energy, Media, Material, Healthcare, and Utilities. If the market continues to roll over, these sectors will likely lead the decline. So, with Energy at the top of the Weak List, I’m still only watching the three refiners I mentioned this past weekend. I need to see their VTI-volume indicators turn positive before buying and that hasn’t happened yet.
Gold was flat yesterday. GLD dropped 0.08 cents to 113.15 as it continues to form the ‘Blade’ of a small Hockey Stick Pattern. If GLD starts to pop, the ‘Blade’ should help it move above its 50-day moving average now located at the 115.36 level. If this happens, it would be a very positive development in gold’s turn around process.
That’s what I’m doing,
h
Market Signals for
09-11-2018
DMI (DIA) | POS |
DMI (QQQ) | NEG |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | 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
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