Professor’s Comments February 20, 2019

Posted by OMS  at February 20th, 2019

The markets were slightly higher yesterday. The Dow was up 8 points, closing at 25,891. The NASDAQ and SPX were up 14 and 4 points, respectively.  Volume on the NYSE was moderate, coming in at 97 percent of its 10-day moving average. There were 122 new highs and 10 new lows.

There were no changes to my market timing signals for equities.  All major equity indexes remain on Buy Signals. There was a change in the timing signal for Bonds as TMF moved from Neutral to a Buy Signal. This is interesting because the overall pattern for TMF suggests the ETF could move a few points higher before Bonds resume their down trend.  BTW, the Fed will be releasing the minutes from its last meeting today, so any perceived change to its current interest rate policy could move the market.

There was a small change in the A-D oscillator last night, so we need to be on the lookout for a Big Move within the next 1-2 days.

The Tide and Dean’s List remain positive.

While most of my indicators are positive at this point, I continue to see negative divergence in the Split Volume Moving Average (SVMA) and On-Balance Volume (OBV) indicators. This non-confirmation is usually an early warning that an important market top is approaching.  They are telling me to pay close attention to the market timing indicators. 

The Sector Ratio increased to 23-1 positive after yesterday’s session. The Strong List was led by Semiconductors, Household Products, Transportation, Technology, and Computers.  The only Weak Sector was Food.

Gold and mining stocks had a nice day yesterday as GLD gaped open and finished the day 1.9 points higher at 126.7.   GLD remains on a Buy Signal.  The overall pattern suggests gold (the metal) has begun its Major Wave 3 up.   The short-term pattern for the metal suggests it’s currently in sub-wave 1 of Wave 3 up.  If I’m right about this, the metal should move from where it is now, near 1340 to about 1360-1365, before pulling back to about 1320. In other words, I believe that gold’s upside potential is likely limited to about 20-25 points before it begins its sub-wave 2 pullback. Then once it completes sub-wave 2, GLD should begin a significant wave 3 of Wave 3 rally.  If you’re not on the gold train now, I believe there will be another opportunity to buy a ticket to ride a few weeks from now.  As long as my market timing indicator remains positive, I will look for opportunities to buy gold on pullbacks.  

Crude Oil (UCO) rose 0.16 cents to 19.36 yesterday as institutional buying continues to come into the ETF.  UCO has now moved above its early February high of 19.15, so it’s next move should be a test of overhead resistance of its 200-day moving average located at 23.35.  Crude Oil (UCO) remains on a Buy Signal.

That’s what I’m doing,

h

BTW, here’s a 60 minute chart of the SPY that shows a wave count that suggests Wave ‘C’ of Wave 2 up could have completed yesterday. Again, with my volume indicators showing negative divergence, we need to be watching for a potential top. However, as we all know, wave counts can morph into other wave counts, so we DON’T trade just on wave counts. We wait for signals, and right now all of the timing indicators for equities, including the SPY (S&P500) remain positive.

h

Market Signals for

02-20-2019

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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