Professor’s Comments August 1, 2017
Posted by OMS at August 1st, 2017
The markets were mixed again yesterday. The Dow closed up 61 points at 21,891. The SPX and NASDAQ were down 2 and 27 points respectively. Volume on the NYSE was moderate, coming in at 100 percent of its 10-day average. There were 132 new highs and 23 new lows.
Not much changed with respect to the overall patterns. The Dow, SPX, and NASDAQ continue to finish large degree Ending Diagonal Patterns.
There was another small change in the A-D oscillator last night suggesting that the Dow will make another Big Move during the next 1-2 days. Given that the Dow is now very close to its pattern target, the Big Move could be a final through over rally, taking the Dow to near or slightly above the 22,000 level. We’ll see.
The NASDAQ and SPX continue to lag the Dow. Since the VTI on the NASDAQ turned negative on 27 July, technology stocks have been down every day. However as of last night, the 2-period RSI is EXTREMELY oversold (8.62) and the VTI, while falling, is still above 50. These conditions usually lead to a short-term rally.
Apple (AAPL) will be releasing its earnings after today’s close. Given the weakness we’ve seen in the technology sector recently, it will be interesting to watch how Apple stock reacts to its earnings announcement. It could set the tone for the overall market.
Three of the 4 breadth indicators that make up The Tide remain negative. The lone positive holdout is the Up-Down Oscillator, so The Tide remains neutral. The fact that breadth continues to diverge negatively from price on the NYSE is a major warning that a top is approaching. However, as long as the VTI and its key volume indicator remain positive, it’s likely that the rally towards 22,000 will continue.
The Dow transports took another beating yesterday. IYT, the Transportation ETF was down 0.80 cents while the Dow was up 61 points. Again, this classic non-confirmation, which has historical significance (Dow Theory) is another major warning of an approaching top.
Monday’s Sector Report showed 20 strong and only 4 weak sectors. Computers, Utilities, Media, Insurance, and Material lead the strong sector list, with Autos, Transports, Semis, and Food lagging. Energy and Material continue to move up the Strong Sector List. I should mention that even though Monday’s Strong Sector List improved to 20 strong sectors, the relative strength ranking of the top sectors is only a 2, with most of the sectors being ranked either 1 or zero. So, the List is NOT as strong as it first appears.
Gold (GLD) was up 0.06 cents yesterday at 120.75. Gold miners like GDX and GDXJ finished flat. The patterns and indicators continue to suggest higher prices. My target for GLD is near the 125 level. For GDX, its near 26. Yesterday GDX closed at 22.82.
I continue to accumulate trial positions in an energy ETFs, like XLE and DIG. Most energy ETFs were flat yesterday. Their VTI’s and volume indicators continue to suggest higher prices.
That’s what I’m doing,
h
Market Signals for
08-01-2017
DMI (DIA) | POS |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | SM CHG |
DEANs LIST | POS |
THE TIDE | NEU |
SUM IND | NEG |
VTI | POS |
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
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