Professor’s Comments September 17, 2019
Posted by OMS at September 17th, 2019
The markets were mixed yesterday as investors shed large cap Dow stocks and moved into small cap stocks on the Russell 2K. The Dow finished with a loss of 143 points, closing at 27,077. The NASDAQ and SPX were down 23 and 9 points, respectively. The Russell 2K was up 6 points. Volume on the NYSE was heavy, coming in at 115 percent of its 10-day moving average. There were 56 new highs and only 6 new lows.
Yesterday’s decline could have been the start of Wave 3 down. The reason I say this is because if you look at a 5 minute chart of the Dow, you will see that yesterday’s decline consisted of 5 distinct waves down into the noon time period. So its possible that Wave 2 up has completed and Wave 3 down is starting. If this is the case the Dow should continue its small retracement a-b-c rally today and into tomorrow’s Fed Meeting. Fed Meetings are always events that can trigger a Big Move, So as long as the Dow stays below Friday’s high of 27,307, there’s a good possibility the top is in.
On the other hand, if Friday’s high is exceeded, it’s likely that the Dow will move above the July high of 27,399, probably to the 27,600 – 27,700 level before starting to fall. Right now, with positive indicators on the cockpit, either scenario is still possible. From a technical perspective, the alternate scenario would change the wave count, but should not change the intermediate term outcome. I still believe the next major move in the markets will be down.
Last night, the A-D oscillator had a ‘relatively’ small change of 12 points. This was less than the 10 points I usually use to turn on the cockpit light. However because it was close and the fact that tomorrow is a Fed Day I thought I’d mention it.
BTW, tech stocks on the NASDAQ should be watched closely now as they have formed a Bearish Hockey Stick Pattern during the past few weeks. A down side break of the 7,800 level will likely lead to a test of 7,600. Then, if 7,600 is broken, it could start a slide toward 7,200 which is my target for Wave 3 down on that index.
The market remains in very fragile condition.
There were no changes to the indicators after Monday’s session. All the major indexes remain on Buy Signals.
The Dean’s List remains Positive, however, The Tide has turned Neutral. The Hi-Lo indicator was responsible for the change as it turned Negative.
The Sector Ratio remained at 22-2 Positive after Monday’s session. The Strong Sector List was led by Service, Semiconductors, Energy, Consumer Products, and Healthcare. The two Weak Sectors were Real Estate and Leisure.
Gold (GLD) rose 1.17 on Monday, the same amount it lost on Friday. I’m still avoiding gold for now as gold remains on a Sell Signal. Once gold completes its Wave 4 pullback, the metal should rally to the 1,600 to 1,650 level as Wave 5 of Major Wave 3 up unfolds. The Model continues to wait for a signal change before buying gold again. BTW, GLD could rally during the next few days, possibly back to the 145 level. I wouldn’t get too excited if this were to happen, as it would only be wave ‘b’ up with the next wave down likely to see the 137 level before Wave 4 completes.
Crude oil had a nice pop yesterday on news that Iran attacked two oil refineries in Saudi Arabia. The news caused the market timing indicator for crude oil to turn positive. I believe the largest impact that this will have will be on the transportation stocks, where the index is currently trading near the 10,750 level. If I’m right abut the pattern, the trannies should trade down to the 8,000 level in the next 4-6 months.
There were no changes to the Model after Monday’s session. The Model remains 100 percent invested in cash ($125,927).
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
09-17-2019
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | NEU |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 05 Sep 2019 |
NASDAQ | POS | 12 Sep 2019 |
GOLD | NEU | 11 Sep 2019 |
U.S. DOLLAR | POS | 29 Aug 2019 |
BONDS | NEG | 12 Sep 2019 |
CRUDE OIL | POS | 16 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