Professor’s Comments March 30, 2017
Posted by OMS at March 30th, 2017
The Dow fell 42 points, closing at 20,659. Volume was moderate, coming in at 91 percent of its 10-day average. There were 88 new highs and only 8 new lows.
Not much changed yesterday. The Dow appears to be completing wave ‘b’ down of a corrective a-b-c move within Wave ‘B’ up. Once wave ‘b down completes, the Dow should rally to the 20,800-20,900 level to complete Wave ‘B’ up before Wave ‘C” down drops the Dow to the 20,000 level.
The last few days of the month usually have a Bullish bias, so the Dow should rally into early April. But once Wave ‘B’ up completes, April could be a very negative month.
The move down to the 20,000 level should complete Major Wave ‘D’ down of the large Bearish Ending Diagonal Pattern, setting the stage for a summer rally (Wave ‘E’ up) that should take the Dow to new highs.
Right now, I’m mostly on the sidelines, waiting for wave ‘c’ up of ‘B’ up to complete above the 20,800+ level where I plan to establish a significant short position, using inverse index ETFs. The two inverse index ETFs I’m watching for entry points are TWM and DXD. Both ETFs are on the Dean’s List.
DIG, the energy ETF, made a nice move up yesterday. However, its negative sister, DUG, is still on the Dean’s List, so I can’t get too excited about energy. With DUG on the Dean’s List, March was not a good month for energy. But we’re still only about half way through the EXTREMELY Bullish time-period for trading energy. Maybe yesterday’s 1.01 point move up in DIG was a sign of things to come. We’ll see.
Yesterday’s Sector Report was little changed. The report had 21 strong sectors and 3 weak. The Semiconductors, Leisure, and Transports continue to lead, with Energy, Service, and Telecoms lagging. Seeing the Energy Sector at the top of the Weak Sector Report is also concerning. It’s another reason why I need to see DIG replace DUG before I get excited about energy.
BTW, I ran The Professor algorithm last night just to check if he saw a potential down trend developing after yesterday’s decline. He didn’t. The Professor highlighted 29 new longs and 0 shorts, so he too has a Bullish bias for now. It will be interesting to see what he says next week.
Waiting for Wave ‘B’ up to complete.
That’s what I’m doing,
h
Market Signals for
03-30-2017
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | NEU |
SUM IND | POS |
VTI | NEG |
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Category: Professor's Comments