Professor’s Comments July 28, 2017
Posted by OMS at July 28th, 2017
The markets had another mixed day yesterday. The Dow closed up 85 points at 21,797. The SPX and NASDAQ were down 2.41 and 41 points respectively. The Dow Transportation Index got clobbered, dropping 295 points or 3.11 percent.
Volume on the NYSE was moderate, coming in at 99 percent of its 10-day average. There were 163 new highs and 25 new lows.
Not much changed with respect to the overall patterns. The Dow, SPX, and NASDAQ are all finishing large degree Ending Diagonal Patterns.
Yesterday’s major change was that the A-D oscillator on the NYSE turned negative. So with one of the 4 breadth indicators that make up The Tide turning negative, The Tide has turned neutral. Also, the fact that the A-D oscillator is negative means that most of the stocks on the NYSE are now in downtrends. Things could be starting to change.
Same for the NASDAQ. Yesterday’s decline turned both parts of my volume / VTI combination indicator negative. This mean the NASDAQ is now on a Sell Signal.
The VTI on the Dow and its volume indicator is still positive and moving up. As long as this indicator continues to rise, it’s possible that the Dow can continue to chop slightly higher before reaching a final top. However with the NASDAQ now on a Sell Signal, and a negative A-D Oscillator, it will become increasingly difficult for the Dow to move higher.
At this point, with high odds that a significant top is approaching, I don’t see any point in establishing new long positions in most equities. But with mostly positive signals on the cockpit and a positive VTI on the Dow, I’m going to wait for a few more cockpit indicators to change before I start shorting.
BTW, yesterday’s decline on the transports turned the Weekly DMI and the VTI on the Dow Transportation Index negative. The fact that the transports are now diverging negatively from the Industrials with negative indicators is a classic sign that a top is fast approaching.
I continue to accumulate trial positions in an energy ETFs, like XLE and DIG. Most energy ETFs made a nice move up yesterday following their VTI’s and volume indicators higher.
Gold miners like GDX and GDXJ were up most of the day but finished lower. The patterns and indicators continue to suggest higher prices.
That’s what I’m doing,
h
Market Signals for
07-28-2017
DMI (DIA) | POS |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | NEU |
SUM IND | POS |
VTI | POS |
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Category: Professor's Comments