The Professor’s sharing his comments for FREE today October 24, 2013

Posted by professor  at October 24th, 2013

The Dow fell 55 points, closing at 15,413.  After noting four days of EXTREME overbought conditions from the A-D oscillator, the decline was expected.  Volume was slightly heavier than normal, coming in at 110 percent of its 10 day average.  There were 154 new highs and only 10 new lows.

The markets still appear to be nearing completion of a rally leg within a much larger Ending Diagonal Pattern. If I’m correct about this pattern, the Dow could drop 400-500 points from current levels.  The S&P could fall below 1690, possibly to 1660.  Yesterday it closed at 1746.  The problem for now is that the pattern is still a Big ‘IF’.  But with this week being the week after options expiration, and the A-D oscillator still overbought at 149.65, I’m in no hurry to buy into this market. It’s just a matter of risk vs. potential reward.

I’m mostly watching the metals, bonds, and the A-D oscillator.

The Dean’s List remains long and positive.  The cockpit indicators are also positive.  However I did note that DIA has fallen to the very bottom of the List, so things could be changing.  Another thing I found interesting about the Dean’s List is that while QQQ, the positive NASDAQ ETF remains on the List, SSG, the inverse semiconductor ETF is there too.  It’s telling me that a lot of rotation is taking place within the NASDAQ.  Money is flowing out of the chip-makers into stocks like Apple and other non-chip making technology companies.

I’m also seeing more and more mining stocks starting to appear on the List, as well as the ETFs of the mining countries, like Canada, EWC, and Australia, EWA.

The PT indicators on Royal Gold, RGLD finally turned positive yesterday.  The P-volume remains very positive, so somebody is starting to get interested in RGLD.  I still don’t own any, but now that the indicators are positive, I will be looking for an entry point.  I’m still not convinced that the miners have bottomed, so any gold stocks I buy at this point will be as trades only.

TMF is still ranked vary high on the Dean’s List. Last week I talked about Bonds and how they appeared ready to rally.  At that time TMF was trading at 48.13 after it turned positive after a TLB pattern.  Now it’s at 51.45.  Because TMF appears to be in the transition zone now,  I’m watching for a Rope Jump.  IF this happens, it would suggest that the downtrend in Bonds is over, and that Bonds could trade back above the 150 level.  If this happens, TMF could be a nice place to be for the intermediate term.  A Rope Jump would  move the ETF above the 56 level.  Very interesting.  Especially for an ETF ranked #2.

CORN is still not on the Dean’s List, but DBA, the agriculture ETF is.   The reason I’m watching CORN now is because it has a beautiful TLB pattern with increasing P-Volume.  I’m just waiting for the PT indicators to turn positive. Actually I’m salivating!  CORN is at its lowest price in over two years.  And while the abundance of crude oil coming from new fracking operations throughout the country is depressing corn prices, all it will take is some type of weather related event in the mid-west to start moving corn prices higher.  Unlike the metals, which depend on a lot of complex monetary factors to appreciate, the factors behind corn prices are far more basic.  People have to eat.  And corn is in about 70-80 percent of everything in the supermarket.

I’m also watching silver.  With SLV and SIVR currently supporting a RS rating of 1 and moving up, these ETFs cannot be ignored. The PT indicators on SLV turned positive two days ago when the ETF closed at 21.41.  It moved up a few cents yesterday to 21.75 on a tough trading day, but is still close to the turn date price.  Next step for SLV would be a rope jump at the 23.27 level.  After that, things could get very interesting.

Mostly watching.

That’s what I’m doing,

h

Update Class at UNF tonight.  Valerie tells me that she still has a few seats open because she was able to secure a larger Classroom.

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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