Professor’s Comments April 21, 2020
Posted by OMS at April 21st, 2020
The markets had another tough day yesterday. The Dow finished with a loss of 592 points, closing at 23,650. The NASDAQ and SPX were down 89 and 54 points, respectively. Volume on the NYSE was low again, coming in at 88 percent of its 10-day moving average. There were 19 new highs and 14 new lows.
The market continues to work its way through corrective Wave C up of Major Wave B up. Once Major Wave B up completes, another crash wave (Major Wave C down) should begin. This wave should take the Dow trade back down to the 17,000-18,000 level, with 12,000 to 13,000 possible if Major Wave C down extends.
At this point, it’s still not clear if yesterday’s decline was the start of Major Wave C down. If the NASDAQ moves below the 8,500 level, it will increase the odds that the next major down wave is underway. My target for the NASDAQ is near or below the 5,200 level during Major Wave C down. Yesterday the NASDAQ closed at 8,561.
With positive indicators still on the cockpit, an unclear wave pattern, and a Positive Sector Ratio, it’s still possible that the markets could make one more rally. This is still not the time to be aggressive on the short side.
Yesterday I Scalp traded the Mouse (DIS), QID, DXD, and DDM for a total profit of just under $2,000. I will continue to use the Scalp Trading techniques I demonstrated in my Scalp Trading Class as long as the Market Timing indicators remain positive and the Dow stays above the 23,200 level. A break of trend line support near the 23,200 will likely send the markets reeling. BTW, I will be starting my live trading chat sessions for those students who took my Class in the next few days. Look for the email invite.
The Market Timing Indicators remain Positive.
The Dean’s List and The Tide also remain Positive.
The Sector Ratio strengthened to 14-10 Positive after yesterday’s session. The Strong List was led by Material, Utilities, Telecoms, PharmaBio, and Healthcare. The Weak List was led by Media, Leisure, Banks, Autos, and Transportation. As long as the Sector Ratio remains positive, it’s still possible for the markets to make one more rally.
There were NO CHANGES to the Model after yesterday’s session. The Model continues to hold 750 shares of DXD, 800 shares of TWM, 1,600 shares of QID, and 1,000 shares of UCO, the ETF for Crude Oil, with a cash balance of $39,366. The Model is currently up about 1 percent vs. a decline of 12.5 percent in the SPX for the same period. If the Market Timing signals turn negative the Model will add to the ‘trial’ positions it currently holds in inverse index ETFs.
Bottom Line: The Major indexes appear close to completing their Major corrective rallies.
That’s what I’m doing,
h
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.
Market Signals for
04-21-2020
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 31 Mar 2020 |
NASDAQ | POS | 08 Apr 2020 |
GOLD | NEU | 17 Apr 2020 |
U.S. DOLLAR | POS | 20 Apr 2020 |
BONDS | NEU | 06 Apr 2020 |
CRUDE OIL | NEG | 24 Feb 2020 |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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.
Category: Professor's Comments