Professor’s Comments December 29, 2016

Posted by OMS  at December 29th, 2016

The Dow fell 111 points, closing at 19,834.   Volume was low again, coming in at 76 percent of its 10-day average.  There were 80 new highs and 30 new lows.

Yesterday’s decline caused several of the cockpit indicators to turn negative.  The Summation Index, A-D Oscillator, and Up-Down Oscillator joined the Hi-Lo indicator in negative territory causing The Tide to turn negative.   With a negative A-D oscillator, it means that most stocks on the NYSE have started to move down.

The VTI on the Dow also turned negative yesterday. However, the VTI is still in Up Trend territory and several of my key volume indicators are still positive.  So, without confirmation from the volume indicators, I still don’t have a Sell Signal.  Be patient.

Most gold stocks had a nice day yesterday.  The VTI on GLD is very similar to the VTI on the Dow, only opposite.  It is now moving up, but still in Down Trend territory.  By turning positive, the VTI is telling me that gold and mining stocks could be bottoming.  However, until the volume indicators turn positive, it’s still a bit early.  Again, be patient.

BTW, even though gold has fallen more than I expected during its corrective wave 2, the upside target remains the same.  Wave 2’s seem to have a mind of their own, and this one was no different.  I originally thought that GLD would decline to the 117 level.  However, because of the ‘through over’ wave in the Dow, it dropped another 10 points as the VTI remained negative.  I’m still using 1500+ for my target on physical gold and 135 for GLD. 

Tomorrow’s report will be the last one for the year.  Once again, it will be a brief Comments-WSR.  If the market declines today causing the volume indicators to turn negative, I’ll let you know with a brief mid-day post.  Remember what I said about the lack of tax selling that I talked about yesterday. If the volume indicators turn negative with the VTI already heading down, it sets up the possibility of a few Big down days early next year.

Also, yesterday’s decline caused a few more sectors to join the Weak List.  Right now there are 15 strong and 9 weak sectors.  A few days ago, there were only 3 weak sectors on the List, so the Weak List is increasing fast.  The two sectors with the largest negative change are Household Products and Service.  So, IF the volume indicators confirm the VTI move, it’s likely that an ETFs in these Sectors will be my first short.

One stock in the Household Products Sector that looks weak is Mead Johnson (MJN).  The stock has been trading sideways for the past two months as the overall market rallied.  The sideways movement appears to be the ‘Blade’ of a negative Hockey Stick Pattern. The VTI on MJN had been moving down and now suggests the stock could be entering a Down Trend Mode.  We’ll see.

Watching the volume indicators on the Dow and gold.

That’s what I’m doing,

h

Market Signals for

12-29-2016

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

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The Hockey Stick Pattern
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