Professor’s Comments September 23, 2014
Posted by OMS at September 23rd, 2014
The Dow fell 108 points, closing at 17,173. Volume was moderate, coming in at 105 percent of its 10 day average. There were 30 new highs and 158 new lows. The number of new lows is now stating to clobber the new highs.
The Tide continues to recede.
The Dean’s List has shortened considerably, but the DIA, SPY, and QQQ remain on the List, so it’s still positive. Meanwhile, TWM and DUG, the two inverse ETFs that I have been holding and buying adding shares have move up near the top of the List. One thing that should be noted is that the top seven ETFs on the List are now inverse ETFs. EEV, the inverse Emerging Market ETF, has moved to the #2 position. So even though the positive U.S. index ETFs remain on the List, it’s NOT a healthy List.
BTW, if you want to balance your portfolio with some international exposure, you might want to look at EEV now. The ETF has a nice TLB Pattern, with positive indicators, so it satisfies all of the elements of the SIGN. Just remember that EEV is also in a down trend, so if you do plan a purchase, it MUST be considered as a trade only. I’d love to see it pull back a few cents before I bought it.
The two other index ETFs that should be watched closely now are the QQQ and SPY. Both of these index ETFs appear to have completed a major up leg of their patterns and could be ready for significant declines. If you look closely at both charts, you will see that the Bollinger Bands are the tightest they have been since last spring. If the PT indicators start to turn Red during the next day or two, and the ETFs fall off the List, I will be looking to buy either QID or SDS, the inverse ETFs.
All I’m doing now is watching the Dean’s List looking for additional shorts (inverse ETFs). With the Tide going out, I DO NOT want to be trading against the flow.
That’s what I’m doing.
h
Market Signals for 09-23-2014 |
|
---|---|
DMI (DIA) | POS |
DMI (QQQ) | NEG |
COACH (DIA) | NEG |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
BREADTH | NEG |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
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Category: Professor's Comments