Professor’s Comments April 19, 2016
Posted by OMS at April 19th, 2016
The Dow rose 107 points, closing at 18,004. Volume was low, coming in at 89 percent of its 10-day moving average. There were 149 new highs and only 5 new lows.
In my WSR last weekend, I mentioned that the pattern suggested the Dow would likely test the 18,000 level. So now that this has happened, what next?
Yesterday’s rally appeared to be part or all of wave ‘e’ up within a small Rising Wedge Pattern for wave ‘C’ up of Major Wave 2 up. If this is the case, then stocks should be getting very close to completing the pattern. A major top should arrive sometime later this week.
One of the reasons I say this is because one of my custom Money Flow indicators has turned negative. The last time this indicator turned positive was on 16 February, when the Dow started its current rally. Since turning positive, the Dow is up over 1,800 Dow points.
This same indicator turned negative on 18 December 2015. That led to a 1,600 point decline in the Dow.
Before that, it turned positive on 6 October 2015 leading to a 1,100 point gain in the Dow.
And before that, it turned negative on 22 July 2015 which led to a 2,400 point decline in the Dow.
Now the fact that one indicator has turned negative does NOT mean that the market has topped. For me to call a major top, I would need to see The Tide turn negative. However, considering the past performance of this custom money flow indicator, and the fact that the Elliott Wave pattern suggests a top is near, I would be very cautious now.
Watching for signs of a top.
That’s what I’m doing,
h
Market Signals for
04-19-2016
| DMI (DIA) | POS |
| DMI (QQQ) | POS |
| COACH (DIA) | POS |
| COACH (QQQ) | POS |
| A/D OSC | |
| DEANs LIST | POS |
| THE TIDE | POS |
| SUM IND | POS |
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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Category: Professor's Comments