Professor’s Comments August 26, 2021
Posted by OMS at August 26th, 2021
The markets continued their rise into a final top yesterday. The Dow finished with a gain of 39 points, closing at 35,404. The NASDAQ and S&P were up 22 and 10 points, respectively. Volume on the NYSE was moderate, coming in at 97 percent of its 10-day moving average. There were 141 new highs and 36 new lows.
In Tuesday’s Comments I discussed how the Dow would likely rally in three waves to a final top. Yesterday’s small rally was likely the completion of wave ‘a’ of the pattern. Next should be wave ‘b’ down. Then once wave ‘b’ down completes, probably near the 35,100 level, there should be a final wave ’c’ rally that takes the Dow toward the 35,700- 35,800 level.
I still believe the Dow will complete its final rally to a top within my projected window of 26 August to 10 September plus or minus a week. My projected target for this Bullish scenario remains near the 35,800 level. A close below 34,500 would negate the a-b-c Bullish pattern and suggest that Wave 5 up has truncated.
The Market Timing Indicators for the Dow, S&P, and NASDAQ remain Positive.
The Scalp Trading Indicators for the Dow (DIA), S&P (SPY) and NASDAQ (QQQ) remain Positive.
The Dean’s List remains Positive. The Tide turned Positive after yesterday’s session.
The Sector Ratio weakened to 13-11 Positive after yesterday’s session. The top five strong sectors were Food Drug (3), PharmaBio, (2), Computers (2), Cap Goods (2) and Retail (2). The top five weak sectors were Energy (-4), Autos (-2), Real Estate (-2), Foods (-1) and Service (-1).
Model Update: There were NO Changes to the Model. It is still 100 percent in cash.
Top Stocks: Ben Franklin said that nothing in this world is certain except, death and taxes. He missed a few things, like the sun rising, and a few others. But if old Ben were alive today, I would really like to have long talk with him about the Member’s Watch List. Since its inception, it has continued to produce one winning trade after another. It may not be ‘certain’, but it’s pretty darn close.
So, last Friday, when I saw the two Bitcoin miners, MARA, and RIOT, appear at the top of the Member’s Watch List, I was excited. Talk about timing. I had just conducted an Update on a few new technologies, including Bitcoin, a few weeks before. So, I couldn’t wait to start trading both stocks this week. MARA, the # 1 stock on the List was at 35.26 last Friday. Yesterday it closed at 38.33 after reaching a high of 38.99. #2 RIOT was at 34.33 last Friday. Yesterday it closed at 37.72. Both stocks remain at the #1 and #2 positions on the MWL with strong RS rankings of 12 and 7, respectively. I continue to hold and scalp trade both stocks.
With Bitcoin looking like it’s starting a Wave 5 up, the miners should continue to move higher. Earlier this year, Bitcoin reached a Wave 3 high of 63,300. Wave 5 up should exceed that level. As Bitcoin was pushing toward its high, MARA and RIOT were pushing toward their Wave 3 highs near 57.75 and 79.5, respectively. If the current rally is a Wave 5 up, both stocks should re-test and likely exceed their previous highs in the months ahead.
So, if you want to know what I’m doing today, I’m trading MARA and RIOT. That’s it. I’m simply watching the 10 min bars and taking all trades to the upside once the ST indicators confirm the trade.
Yesterday, my friend Sal stopped by to deliver some honey for Marcia. Sal is a backyard beekeeper, and his honey is great for treating local allergies. Anyhow, as we got caught up over a glass of wine, Sal watched me trade. I showed him the new indicator I was testing and as we talked, he watched me make about $250 trading MARA and RIOT. The previous day I did the same thing for a $990 profit. I was only trading 300-400 shares. The thing that makes the indicator easy to use is that it complements the Scalp Trading Indicators with Buy/Sell arrows. Talk about easy! If I’m right about the market topping somewhere between today and mid-September, it might be a good time to have another Update Class so you can get the new indicator …if it continues to perform successfully. Because the new indicator is intended to be used with the existing Scalp Trading Indicators, only students who purchased the ST Class will be eligible to attend. BTW, if you are still one of those students who has not purchased the class, you are really missing out. I urge you to get the class, the free follow-on training, a free half hour live video conference with the Professor, where all your questions will be answered AND be eligible for all future Update Classes, including access to the new indicators. You can purchase the ST Class directly from the web site. Do it today!
Gold: Gold (GLD) dropped 1.17 points yesterday, turning the Market Timing Indicator for gold back to Neutral. At this point, it’s still possible that the a-b-c pattern on gold is complete. However, I need to see positive indicators again before buying. Right now, I’m on the side lines with gold. However, I am looking closely at shorting a few miners, specifically GDX. Yesterday I bought a few17 January 22 Puts on GDX. Strike price was 21. Cost me 0.15 cents. I don’t expect GDX to drop all the way down to the 21 level, but if it drops enough for me to double my money, I’ll exit the trade. Again, the gold miners are NOT gold.
Bonds: Bonds (TMF) fell 0.77 cents yesterday to 28.47. The pattern still suggests that Bonds are nearing completion of a Wave 4 retracement. If the pullback we’ve seen during the past few days is a small wave 4 triangle, Bonds could have a small rally before the pattern is complete. Again, what’s a few points when there is so much downside risk. I still believe that once the current rally in Bonds is complete, Bonds will tank as interest rates begin to rise.
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
08-26-2021
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 23 Aug 2021 |
NASDAQ | POS | 23 Aug 2021 |
GOLD | NEU | 25 Aug 2021 |
U.S. DOLLAR | NEU | 23 Aug 2021 |
BONDS | NEU | 18 Aug 2021 |
CRUDE OIL | NEG | 02 Aug 2021 |
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