Professor’s Comments August 23, 2019
Posted by OMS at August 23rd, 2019
The markets were mixed yesterday, with the Dow gaining 50 points while the NASDAQ and S&P lost money. Once again, volume was low. The Dow reached a high of 26,389 before pulling back, so it’s getting close to its projected top near 26,600. It still looks like the market will top sometime next week.
The transports looked extremely weak yesterday, with IYT dropping 0.60 cents to 181.54. The decline caused the ETF to move back to a Sell Signal, with a CCI that is close to entering the Down Trend mode.
If the market rallies today, which I expect as the seasonality remains positive, I will look to establish a few short positions in the transports. The Dow transports, currently trading slightly below 10,000, are in a long term pattern that suggest a decline from current levels to below the 24 December 2018 low, probably close to or below the 8,300 level. There are several complex patterns in the chart of the transports, all negative, and a move below 175 on IYT would trigger all of them.
Gold pulled back slightly yesterday as did mining stocks. The sideways to down action we’ve seen for the past few days in GLD appear to be a wave 4. If this is the case, gold (GLD) could be ready to rally to the 147 level in the weeks ahead. Right now, I believe that going long gold (the metal) and shorting transportation stocks from slightly higher levels are the two best bets on the board.
Also, the past few days of sideways trading in the NASDAQ has formed a small rising wedge pattern on the short-term bars (60s). If I draw a trend line under the two most recent lows of the wedge, it comes in near the 7650 level. Rising Wedges are very reliable patterns, and this one appears to be final wave ‘c’ up of corrective Wave 2 up. Bottom Line: If 7650 is broken, the NASDAQ-100 should begin a Wave 3 decline to the 7200 level. Because of the pattern, I’m making a short of the NASDAQ-100 below 7650 as the third best bet on the board.
Sector Ratio fell to 9-15 Negative after yesterday’s session.
h
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