Professor’s Comments April 9, 2020
Posted by OMS at April 9th, 2020
The markets had another strong rally yesterday, with the Dow approaching its target high. The large cap index finished with a gain of 780 points, at 23,434. The high for the day was 23,513. The NASDAQ and SPX were up 204 and 91 points, respectively. Volume on the NYSE was low coming in at 89 percent of its 10-day moving average. Once again, I found it strange that the volume was relatively low on a day when the Dow had such a large point gain. There were 7 new highs and 6 new lows.
The market appears to be in a short-term rally phase within a strong decline. Yesterday, the Dow formed an inside day where the high and low were within the range of the Tuesday’s session. Inside days sometimes mark the end of a rally phase, so Major Wave B up could be nearing completion. We’ll see.
Once Major Wave B up completes, another crash wave (Major Wave C down) should begin. This wave should see 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.
The final trading day before the Easter Holiday is usually positive. My indicators suggest that the market could begin to weaken later today and continue into next Tuesday. If the short-term indicators turn negative, I’ll look to establish a ‘trial’ position in DXDs.
The market timing indicators were Neutral after yesterday’s session. Strangely, the Dean’s List turned Negative after yesterday’s 780 point rally. The Tide remains neutral.
The Sector Ratio strengthened to 12-12 Neutral after yesterday’s session. The Strong List was led by Material, Telecoms, Semiconductors, Utilities, and Healthcare. The Weak List was led by Media, Service, Banks, Autos, and Leisure.
There were NO CHANGES to the Model after yesterday’s session. The Model remains heavily invested in cash with a few shares of UCO, the ETF for Crude Oil.
There was a report yesterday that Russia could be close to reducing the production of Crude Oil. If this happens, we could see a nice move in UCO.
Gold (GLD) fell 1.39 points yesterday to 154.65. The past three days of trading on the ETF have formed the Blade of a small Hockey Stick. If so, gold should begin to move higher once the Blade completes.
It’s possible that Wave 2 up in Bonds is either complete or nearing completing. If the short-term indicators turn positive on TBT, the Model will buy a ‘Trial’ position in the ETF today and look to add to the position once the Daily’s turn positive.
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.
With the Dow approaching its target near the 24,000 level, the Model bought a trial position of 1,000 shares of DXD. Price paid was 23.30.
The Model will add to this position if the Dow continues lower.
h
BTW, the technique I used to buy the DXDs today was straight from the Scalp Trading Class I plan to start next Tuesday. Currently I’m up over $1,400 on the day, scalping gold and DXD.
I plan to continue to look for scalping opportunities as the market moves lower.
Think about it….could you use a complete trading system like this? Watch for Dave’s email with the details.
h
Buying a ‘Trial’ position (800 shares) of TWM at 15.93. Adding to the DXDs.
h
Market Signals for
04-09-2020
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEG |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | NEU | 31 Mar 2020 |
NASDAQ | NEU | 08 Apr 2020 |
GOLD | NEU | 07 Apr 2020 |
U.S. DOLLAR | POS | 08 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