Professor’s Comments February 8, 2019

Posted by OMS  at February 8th, 2019

The markets fell sharply at the open yesterday, then clawed their way back into the close.  The Dow finished the day down 220 points at 25,170.  The NASDAQ and SPX were down 87 and 26 points, respectively.  Volume on the NYSE was heavy, coming in at 110 percent of its 10-day moving average. There were 64 new highs and 24 new lows.

Yesterday’s opening decline was likely the Big Move predicted by Tuesday’s small change in the A-D oscillator. The impulsive decline could have been the start of sub-wave 3 down within Wave 3 down. If this is the case, there should be more downside follow through today. We’ll see.

Yesterday’s decline was not enough to change my market timing signals on the cockpit for equities.  The Dow, NASDAQ, SPX, and RUT remain on Buy Signals.   However, the VTI-volume indicator that generates these timing signals is very close to a Sell.  Another down day today could do the trick.

The Tide and Dean’s List also remain positive.

Given that the pattern suggests sub-wave 2 may have completed on Wednesday, students should watch for a change in the market timing signals on the cockpit.  They could be signaling the start of the next wave down, which could last for several weeks.

The Sector Ratio weakened again yesterday.  It now stands at 13-11 positive.  Another down day today could cause the Sector Ratio to turn negative.  Students should continue to watch for changes to the Strong and Weak Lists.  If Wave 3 down is about to begin, the Sector Ratio and the Lists should begin to reflect the new change in direction.

After yesterday’s session, the Strong List continued to be led by Household Products, Semiconductors, Real Estate, Technology, and PharmaBio.  The Weakest Sectors were Energy, Telecoms, Autos, Food Drug, and Healthcare.  If/When the markets start to head down in earnest, many of the defensive sectors currently on the Weak List should begin to move to the Strong List.  Students should note that the defensive Household Products Sector (toothpaste and toilet paper) is now at the top of the Strong List.

At last night’s PT Class, I showed students (again) how I use my Flow Chart to find stocks and ETFs to trade.  Everything starts with the Market Timing Signals. If these signals begin to turn negative, I’ll look to see which sectors are moving to the top of the Weak List. Then I’ll look to short stocks and buy inverse ETFs in these sectors IF they are available.  I’ll also look to see how many of the sectors on the Weak List are related to technology.  If the weakest sectors are closely related to technology, I’ll look to buy QID, which is the inverse leveraged ETF for the NASDAQ-100.  If the Weak Sector List contains sectors related to the general economy, I’ll buy DXD, which is the inverse index ETF for the Dow.  In other words, I’ll use the Sector Lists to help select the inverse index ETFs I want to buy (or short) from the Dean’s List and Member’s Watch List.

Gold (GLD rose mildly yesterday, gaining 0.30 cents to 123.74.  GLD still appears to be starting a small wave 2 pullback.  It remains on a Buy Signal.

Crude Oil (UCO) remains on a Neutral Signal.  UCO continues to trade along its 50-day moving average causing its Bollinger Bands to narrow.  The Bands are EXTREMELY narrow at this point, suggesting a Big Move is coming.  If UCO starts to move higher and causes the timing signal for Crude to turn positive, I’m a buyer.

That’s what I’m doing,

h

Market Signals for

02-08-2019

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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