Professor’s Comments January 26, 2016

Posted by OMS  at January 26th, 2016

The Dow fell 208 points, closing at 15,885.  Volume was low, coming in at 83 percent of its 10-day average.  There were 17 new highs and 103 new lows.

Not much changed yesterday.  The Dean’s List is still negative and The Tide is neutral.  So it’s possible that yesterday’s decline was either all or part of wave ‘b’ down within wave 4 up or the start of wave 5 down.

Wave 4s tend to be complex structures.  Just when you expect them to do one thing, they do something entirely different.  In this weekend’s WSR, I showed a pattern for how wave 4 could develop.  So far the Dow has followed that pattern exactly.  This is what has me a bit scared this morning, because I know that this usually doesn’t happen very frequently in a wave 4.

So with mixed indicators, I’m on the sidelines.

If yesterday’s decline was part of wave ‘b’ down, then it’s still possible that the Dow could rally back to the 16,200+ level before wave 4 up completes.  As long as The Dean’s List and The Tide are mixed, I cannot conclude that wave 5 down has started. 

Once wave 4 down does complete, the pattern suggests that wave 5 down will drop the Dow to near or below the 15,000 level.

BTW, the Emeritus algorithm was silent yesterday.  By not highlighting any stocks as either longs or shorts, it didn’t give me any clues about the next move in the market.

I received several emails yesterday expressing interest in my individual tutoring program.  So far three students have committed.  I’m looking for a maximum of 4 students to help me work out the details of teaching this methodology which is primarily focused on scalp trading. Yesterday I used this methodology to generate another nice profit. My one day profit was more than I what I plan to charge these first four students! If you’re interested, please send me an email and I’ll get back to you with the details.  I’ll probably start the tutoring program in about two weeks.

That’s what I’m doing,

h

Market Signals for

01-26-2016

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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