Professor’s Comments August 30, 2022
Posted by OMS at August 30th, 2022
Stocks opened lower yesterday, then caught a bid and started a small retracement rally but still managed to close lower. The Dow was down 185 points, closing at 32,098. The NASDAQ and S&P were down 124 and 27 points, respectively. Volume on the NYSE was moderate, coming in at 91 percent of its 10-day moving average. There were 30 new highs and 137 new lows.
Yesterday’s early decline into the 11:30 time slot appeared to complete sub-wave 1 of Wave 3 down with the afternoon rally being part of a small sub-wave 2 a-b-c retracement. After declining almost 1,400 Dow points in sub-wave 1 down, it was time for some type of retracement. If I’m right about this, the market should rally during the next day or so to complete sub-wave ‘C’ up of the pattern. Once complete, the market should resume its decline. The sub-wave ‘C’ retracement rally could carry the Dow back to the 32,400+/- level. My next downside target is still near the 31,050 level+/-. The next decline should be impulsive.
My next downside target for the S&P stays near the 3,900 level. The S&P closed at 4,30.61 yesterday.
The Market Timing Indicators for the Dow, S&P, NASDAQ, and Russell are negative.
The Scalp Trading Indicators on the same indexes are negative.
The Dean’s List and The Tide are negative.
The Sector Ratio weakened to 17-7 positive after Monday’s session. The top five strong sectors were Autos (5), Utilities (4), Cap Goods (2), Retail (2) and Energy (2). The top five weak sectors were Financial (-1), Semiconductors (-1), Media (-1), PharmaBio (-1), and Computers (-1).
My Doctor’s Trade on TZA was up 0.85 cents yesterday, closing at 33.07. My short-term target is still near 39.40. This is the level near the earlier wave 4 which should now at as upside resistance. This level is equivalent to 179-180 on IWM, the ETF I use to track the Russell 2K. BTW, IWM is now down about 31 percent since its mid-November all-time high. I believe the decline in the small caps is only getting started. Yesterday. IWM closed at 187.24. By the time Wave 3 down completes, IWM could be trading below 150, with 140 possible. Think about this the next time you see a Green Arrow on TZA.
Gold and silver could be close to starting their next rally wave. Yesterday’s decline to 1,720 on gold appeared to be the bottom of wave ‘B’ down of an a-b-c retracement move. If I’m right, wave ‘C’ up could carry to the 1,860-1,870 level. This would put UGL near or above its wave ‘A’ high of 55.79. I’ll be using the 56 level as my target. The same a-b-c pattern on silver could take the metal back to 22. This would put my target for SLV somewhere between 19.50 and 20. I’ll be buying both ETFs on a Green Arrow on the 30-min chart. I’ll start with a small position and then add to it if the 60s turn positive. This will be a short-term trade only. A close below the mid-July lows would negate the a-b-c pattern.
Bottom Line: It appears that Wave 3 down is now underway. If the market retraces today, I will be using a 3-day, 12-minute chart to add to my existing positions SDOW, TZA, SQQQ, SPXU, and SARK.
That’s what I’m doing
h
Market Signals for
08-30-2022
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
A/D OSC | |
DEANs LIST | NEG |
THE TIDE | NEG |
Index | Signal | Signal Date |
---|---|---|
DOW | NEG | 29 Aug 2022 |
NASDAQ | NEG | 26 Aug 2022 |
GOLD | NEG | 26 Aug 2022 |
U.S. DOLLAR | POS | 23 Aug 2022 |
BONDS | NEG | 11 Aug 2022 |
CRUDE OIL | POS | 23 Aug 2022 |
CRYPTO | NEG | 19 Aug 2022 |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
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Category: Professor's Comments