Professor’s Comments Update 2/9/16

Posted by OMS  at February 9th, 2016

One of the ETFs I’m watching today is DIG.

Late yesterday, it was the energy sector that led the Dow higher.

DIG appeared to have complete a TLB pattern on 20 January with a low of 20.40. Since that time it has rallied to a high of 27.40 on 29 January. That high was no where anything needed for a ‘Rope Jump’, so I’m NOT looking for great things out of the ETF at this point. But nevertheless, the subsequent pullback since then argues that the recent pullback is corrective.

So with March only three weeks away, I have to be looking for some type of rally in energy. This year the rally may only be a retracement bounce in a Major Bear market. But after seeing energy lead the markets higher yesterday, I have to pay attention.

My money flow indicator on DIG is higher now than when the ETF was trading at 38.54 on 1 December. That is a very significant divergence!

And with the ETF trading at 24.4, the fast stochastic is entering oversold territory on the Daily chart.

So with positive Money Flow with oversold conditions….I’m watching the short term indicators to trigger a Buy Signal.

That’s what I’m doing.

h

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