Professor’s Comments April 2, 2019

Posted by OMS  at April 2nd, 2019

Quick Update:

The markets rallied hard yesterday on relative light volume, most of which was short covering.

The Dow finished with a gain of 330 points, closing at 26,258. The NASDAQ and SPX were up 100 and 33 points, respectively. Volume on the NYSE was moderate, coning in at 100 percent of its 10-day moving average. There were 177 new highs and only 12 new lows.

There were several changes to the market timing indicators after yesterday’s session. The Dow, S&P, and Russell 2K joined the NASDAQ on a Buy Signal.

Yesterday’s rally confirmed the upside breakout of the consolidation triangle that has been forming on the major indexes for the past few weeks. The breakout means that the major indexes will likely be moving to new highs during the next several months with a major top being deferred until later this year. Students should remember that triangles are consolidation patterns where prices usually leave the pattern in the direction they entered the pattern. In this case, the direction is up. Also, from a technical perspective, the upside breakout is likely the start of Wave ‘C’ up of Major Wave ‘E’ up. If thus is the case, Wave ‘C’ up should take the Dow well above the 27,000 level with 27,500 -28,000 possible. On the other hand, because Wave ‘E’ up is likely the final wave in the Bull Market, it could terminate at any time.

The Sector Ratio moved to 19-4 positive after yesterday’s session. The Strong List was led by Semiconductors, Household Products, Technology, Retail, and Computers. The Weak List was led by FoodDrugs, Banks, Media, and Consumer Products. The fact that the Sector Ratio has remained strong for the past several weeks proved to be a good indication that that the upside breakout from the triangle would occur.

Model Portfolio: Just after yesterday’s open, the Model sold its shares of SKF, the Banking ETF for a small loss and bought a half position (269 shares) of DDM, the 2X positive leveraged ETF for the Dow at 47.18. This protective action was taken when it became obvious that the upside breakout from the triangle was underway.

The Model also purchased a half position (635 shares) in UCO, the positive ETF for Crude Oil. The remainder of the theoretical $100,000 portfolio, $76,170, remains in cash.

All of yesterday’s sales/ purchases were viewed as protective measures against the possibility of a runaway breakout. Because he markets were EXTREMELY overbought at the time of purchase, it was hoped that a better entry price could be obtained during the next few days.

Remember, even IF the markets are on an upside breakout where they could move several hundred points higher, the odds of a straight up rally are slim. There should be several pullbacks as the market moves higher and the Model will uses these opportunities to add shares. Students should watch the 2-period RSI on the Daily and 60 minute charts for opportunities to add shares.

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.

That’s what I’m doing,

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Market Signals for

04-02-2019

One hour video recorded from May 28, 2016 The Professor’s Signs of a Major Market Turn – Prospectives and the Projected Timing and Levels One hour streaming video – includes webinar handouts The Professor usually holds an update class whenever the Market looks like it may be making a major turn. If you have been following the Professor’s Comments you know that a turn is due….. LEARN MORE

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
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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.