Professor’s Comments Correction 2/1/16

Posted by OMS  at February 1st, 2016

One of the things I’m watching today is for the Dow to start an impulsive decline.  And with that decline, the Money Flow indicators need to turn negative.

Here’s the thing: 

Friday’s rally was very powerful, with the Dow closing on its highs. The trading action was impulsive.  Anytime I see impulsive action to the upside, I have to consider Bullish alternatives.  Yeah, the Dow closed above the 16,400+ level where I thought it would.  But now it MUST start an impulsive decline. 

If the market only declines 150 points and then stabilizes, it could be that today’s decline is a small wave 2 correcting Friday’s rally.

In other words, Friday’s rally was NOT the completion of minor wave 4 but rather part of Major Wave 2 up.  If this is true, it means that Major Wave 1 down bottomed on 20 January and everything since has been part of Major Wave 2. It also means that Major Wave 2 up will likely complete close to the 17,000 level.

Watching.

That’s what I’m doing,

h

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The Hockey Stick Pattern
The Creation of Waves and Trends
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