Professor’s Comments September 12, 2013

Posted by OMS  at September 12th, 2013

The Dow was up another 133 points yesterday, making it the third 100+ point rise in three days. That’s impulsive action. So in 3 days, the Dow is up over 400 points! That’s the Big Bang I was looking for to signal the start of Wave 3 up of ‘C’ up,

Wave 3 up will not be straight up, and should have small pullbacks along the way. These pullbacks should be small and only last a few days. The small pullbacks should be used to Buy and trade additional shares using my Rifle Trading techniques. Basic Positions should be held during this wave 3. I will not sell all of my Basic Positions until I see all of the PT indicators turn negative. However I will consider doing some money management, taking a few bucks off the table IF the CCI on a particular stock starts to move back under 100. If this happens, I will hold some of my Basic Position and then look for socks from the Honor Roll, which appear to be just starting trends. In other words, I want to have most of my money in stocks that are trending and pushing the overall market higher. But right now, I’m just looking to establish my Basic Positions. I currently have full Basic Positions in SLB, GILD, JCI, and RCL. All of the mentioned stocks except for RCL, are in the trend mode.

If you get a chance today, take a good look at what happens to stocks that are entering trend modes. Look at SLB as an example. Last week, SLB was trading near 81. Now its at 87

Same for JCI. Last week it was trading near 40. But two days ago, the stock entered the trend mode, where the 35-period CCI moved above 100. Now its trading just under 43 with expanding Bands. You might want to watch JCI in the days ahead, As long as the stock stays in the trend mode it should continue to move higher.

The Professor was active again yesterday highlighting 52 additional stocks. So in the past three days, The Professor has highlighted 57, 97, and yesterday another 52 stock as trending. That’s a lot of trending stocks. It tells me the current wave 3 up should easily test the 16,200-16,300 level before a small wave 4 consolidation period starts to develop. These targets for wave 3 are still about 900 to 1,000 Dow points from where we are now. Then once this consolidation wave completes, wave 4 should form a triangular Blade that could push the Dow near the 17,000 level.

The DMI on the Dow turned positive yesterday, so now the DMIs on the QQQ, SPY and DIA are all positive. Usually when there is a DMI turn, I run The Professor to see if the DMI turn is valid. Right now, the DMI turn not only appears valid, it also appears that it could be one of the strongest DMI turns of the year.

This is pretty good stuff to know, because when I see The Professor highlight more than 50 stocks to generate a Professor Buy Signal, it allows me to become very aggressive. When I know that so many stocks are entering the trend mode, the odds of significant rally in the broad market are high. This is the time when you just want to grab a few stocks or ETFs that are showing trends, and go dancing. It’s usually a time to have a lot of fun.

Like teach in Class, there are times to be in the market, and times to be out, Currently all of my indicators, pattens, Lists and algorithms are suggesting this should be a very good time to be in the market. As long as the politicians in Washington don’t do something stupid to screw things up, we should be starting a very significant rally.

There was a small change in the A-D oscillator yesterday, so we could have another Big Move within the next 1-2 days.

Emeritus highlighted another six stocks for the Honor Roll. As I have discussed in the past, when Emeritus starts to highlight more than 6 stocks, it is also usually another good indication that the market is trending. The stocks from yesterday’s Honor Roll that I find attractive are Helmerich & Payne, HP, and Deutsche Bank, DB.

HP has a 22 point stick from last November. The Blade low made in April was near the 45 level, So with HP currently trading near 67, it has potential for a move to 77.

DB also has a nice 7 point stick since early July. If this 7 point stick is added to the late August low near 43, it produces a target near 50. The stock is currently trading just under 47.

Also I want to say a word or two on AAPL. The stock dropped almost 27 points yesterday, turning the DMI and P-volume negative. The stock is still in a down trend but the recent rope jump is telling me that the recent decline is part of a wave 2 Blade. AAPL became a TLB Buy on 16 July at the 426 level. And today, even with the 27 point decline, its still trading close to 468. If I wanted to Buy APPL here, which I don’t, I would have to wait for all three of the PT indicators to turn positive again. But why would I want to do that with so many stocks already starting to enter Uptrends? APPL has a lot to prove to me before I become interested.

Buying stocks from my Lists very aggressively now.

That’s what I’m doing,

h

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.