Professor’s Comments July 25, 2017
Posted by OMS at July 25th, 2017
The markets were mixed again yesterday. The Dow was down 67 points, closing at 21,513. The NASDAQ finished up 23 points. Volume on the NYSE was moderate, coming in at 103 percent of its 10-day average. There were 150 new highs and 25 new lows.
Not much changed after yesterday’s trading. The DMI on the Dow remains negative, but the same indicator on the NASDAQ remains positive. Same for the VTI. It’s negative on the Dow but positive on the NASDAQ. So at least for the time being, there appears to be some rotation going on.
Last week I talked about what happens when the VTI turn negative when one of my key volume indicators is also negative. The market usually goes down. And that’s what has happened for the past two days. The Dow has been off 32 and 67 points.
On the other hand the VTI on the NASDAQ has been positive while the same volume indicator has also been positive. Result: The NASDAQ has been flat and up 23 points.
So once the patterns complete, I’d be very careful of any situation where the VTI and volume indicators start to line up and turn negative on all the major markets. That’s when trouble will start to happen. But it’s not happening now.
I ran The Professor again last night. Not much there either. The Professor had 16 longs and 10 shorts. If a trend is going to start one way or the other, we’re going to need to see 40-50+ stocks being highlighted. So it appears the markets will likely keep wallowing around a bit longer. Be patient. A trend will start and our indicators will catch it. But right now the indicators are mixed.
One thing to keep an eye on is the SPX. Last night my key volume indicator for the SPX fell to a point where it is very close to going negative. It’s one thing for this volume indicator to turn negative when its measuring the 30 stocks in the Dow. It’s an entirely different issue if that same indicator turns negative when the amount of stocks is 500.
So with mixed indicators, I’m just going to wait another day or so to see what happens. DXD, the inverse ETF for the Dow has re-appeared on the Dean’s List. But I still believe it’s a bit early to state shorting. If the VTI and the volume indicators on the SPX turn negative, that will probably convince me. That’s when I’ll start looking to establish a few short positions using inverse ETFs as they appear on the Dean’s List.
That’s what I’m doing,
h
Market Signals for
07-25-2017
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | POS |
SUM IND | POS |
VTI | NEG |
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Category: Professor's Comments