Professor’s Comments January 15, 2016

Posted by OMS  at January 15th, 2016

The Dow rose 228 points, closing at 16,379.  Volume was heavy, coming in at 125 percent of its 10-day moving average.  There were 7 new highs and 718 new lows.

Yesterday’s early decline to 16,075 and subsequent rally to 16,482 appeared to be the completion of sub-waves 3 and 4 of wave 3 down of Wave 1 down.  If this is the case, the Dow should start a wave 5 decline taking it below the 16,000 level. 

All of the energy stocks that my oversold algorithm highlighted as longs had nice pops yesterday.  Haliburton (HAL) and Schlumberger (SLB) produced the best scalp trades closing up 1.38 and 0.73 points respectively.  Again, these stocks were from the same algorithm that predicted Tuesday’s 118 point rally in the Dow.    

If this algorithm highlights another batch of oversold stocks during the next few weeks, I’ll post a few of them so you can watch how they trade on the 10 minute bars.  They made for pretty easy scalp trades.

As I mentioned yesterday, with the Dow over my target of 16,400 and the Money Flow indicators starting to weaken, I exited my long positions in energy and started to establish a few positions in inverse index ETFs.  Because my next target for the Dow is below 16,000, I will hold these positions and look to add to them if the market continues to decline.

That’s what I’m doing,

h

Market Signals for

01-15-2016

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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