Professor’s Comments December 1, 2015

Posted by OMS  at December 1st, 2015

The Dow fell 79 points, closing at 17,720.  Volume was moderate, coming in at 107 percent of its 10-day moving average.  There were 99 new highs and 63 new lows.

Although the Dow pulled back yesterday, it did not change any of the two scenarios currently on the Board.  Right now, I still have to consider the five wave stair-step rally to 18,350+ as my primary scenario.  However IF the Dow does not exceed the 17,978 level and the Dean’s List and Tide turn negative, the Ending Diagonal scenario will start to take on added significance. 

One of the reasons I’m being extremely cautious now is because there is no trend in place.  Last night the 35 period CCI came in with a reading of 53.3 which was a decline from the previous days reading of 64.7.  So not only is the CCI not in a trend mode, it’s also declining which is troublesome in a market where the two primary patterns are both terminal patterns that could truncate at any time.

The Dean’s List continues to remain positive.  However last night, the Up-Down oscillator, one of the four indicators that make up the Tide, turned negative.  This means The Tide has turned neutral.  As long as it does not turn negative, it’s likely that yesterday’s pullback was part of a Hockey Stick pattern that will lead to higher prices.

So with mixed indicators, and no trend in place, I plan to remain on the sidelines and look for a breakout on the shorter term bars. Yesterday’s high on the Dow was 17,837.  If the Dow moves above that level, the odds for an upside move above 18,100+ are high.  Remember, the past six days of sideways trading have developed the ‘Blade’ of a nice Hockey Stick pattern with a 700+ point ‘Stick’. This ‘Stick’ suggests that a re-test of the May highs at 18,350 is likely.

So IF the market starts to strengthen today, I will be looking for entry points to buy DDM on the shorter-term bars. If I enter this position trade, my short term target will be the 18,100 level.

That’s what I’m doing,

h

Market Signals for

12-01-2015

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
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