Weekend Strategy Review March 8, 2020
Posted by OMS at March 9th, 2020
I will be traveling to Orlando this weekend to see my granddaughter perform in an aerobic dance competition. So, I’m posting this brief WSR tonight and follow up with a brief post after I look at the futures late Sunday night.
The markets rebounded from early losses to close moderately lower. This rebound was important to see, as it kept the triangle scenario, I talked about in Friday’s early comments alive.
If the Dow continued to trade lower after the gap down opening, it would have been very negative for stocks next week. But it didn’t, and that was a significant positive development.
Another major positive was the cluster of buy programs that came in during the last half hour of trading. So, after looking at the pattern during the last four trading days, I believe the Dow is forming a 5-3-5 triangle for wave ‘b’ down of Wave 2 up. IF this is the case today’s late rally could have been the start of wave ‘c’ of Wave 2 up. This wave could carry the Dow above the 27, lever, possibly as high as 27,500 before Wave 2 up completes.
The market timing indicators remain negative as do the DMIs, the Dean’s List, and The Tide.
The Sector Ratio fell to 1-23 Negative after Friday’s session.
The Model bought ‘trial’ positions in DUST (1,000 shares) and Crude Oil (1,000 shares). Cost was posted in an earlier update.
The shares of DUST were purchased because the pattern suggested wave 5 of Wave 5 up was nearing completion. The shares of UCO, the positive ETF for Crude Oil, were purchased after Crude fell 10 percent, after the Saudi’s announced they would not be cutting production. This pushed the price of crude oil to a 5-year low. It also pushed my timing indicators to EXTREME oversold levels. I like buying things during a Fire Sale, which is how I view crude at current prices. If the indicators begin to turn positive levels, the Model will add to its ‘trial’ positions.
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.
Have a great weekend.
That’s what I’m doing,
Market Signals for
|DOW||NEG||24 Feb 2020|
|NASDAQ||NEG||24 Feb 2020|
|GOLD||NEU||06 Mar 2020|
|U.S. DOLLAR||NEG||02 Mar 2020|
|BONDS||POS||07 Feb 2020|
|CRUDE OIL||NEG||24 Feb 2020|
As always, the Professor never makes recommendations. The information is provided on an educational basis so you can have informed discussions with your financial advisors and/or accountants about your individual investment decisions.
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.