Professor’s Comments July 31, 2014
Posted by OMS at July 31st, 2014
The Dow fell 32 points, closing at 16,880. The OTC rose 20 points and the SPX was flat. Volume on the NYSE was heavy, coming in at 115 percent of its 10 day average. There were 91 new highs and 55 new lows.
The Dean’s List turned negative. DXD and SDS, the inverse index ETFs for the Dow and the S&P500 appeared on the List joining TWM, the inverse index ETF for the Russell 2000. The only positive index ETF that remains on the List now is the QQQ.
So now 2 of the 3 required elements of the SIGN are in place for most of the inverse index ETFs. All I need to see now before I start taking ‘trading’ positions is a change in the indicators. This could happen very soon.
While I was watching the market decline yesterday, there was a point when the indicators on the DIA actually turned Red. However after Janet Yellen’s benign comments, the Dow started to rally into the close and the MACD returned to positive territory. It won’t take much of a decline for the MACD to turn Red now.
Breadth continues to decline. I received several positive comments from students yesterday about the breadth indicators I have been posting. Most of my students never saw breadth indicators posted in this manor, and found the correlation between breadth and the movement of the market very interesting. I will continue to post this breadth chart whenever all four indicators line up one way or the other. Like I said, you NEVER want to trade against breadth. At the end of the day, its almost always breadth that wins. That is IF you can measure it the right way :>)
I’m still in my ‘trade’ of TWM. Yesterday’s early decline gave students another opportunity to add a few shares when the 2-period RSI Wilder dipped below the 30 level. At this point, a nice ‘Blade’ has formed with the 50 acting as strong support. The ‘Blade’ appears to be nearing completion, so the next move should be an assault on the 200 which is slightly above the 51 level. If this happens, it will set-up a possible ‘Rope Jump’ that will signal the next major move in the ETF.
I’ve been spending a lot of time talking about my ‘trade’ in TWM these past few weeks . The reason I’m doing this is so you can see how a stock or ETF starts to move from a down trend into an uptrend. It all starts with a TLB Pattern followed by an appearance on the Dean’s List and finally Green indicators. The reason I’m doing this is so you can fully understand this turn around process and take advantage of it.
If you don’t fully understand how to Trade the Turns, you might want to order the webinar I did for AIQ Systems several months back. Just call Barbara Greer at 1-800-332-2999 and she will fix you up. The cost is minimal and with all of the trading opportunities I’m seeing now, it might be worth 45 minutes of your time to get this technique down cold.
Things are changing fast now. Be prepared.
That’s what I’m doing,
h
Market Signals for 07-31-2014 |
|
---|---|
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | NEG |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEG |
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
All of the commentary expressed in this site and any attachments are opinions of the author, subject to change, and provided for educational purposes only. Nothing in this commentary or any attachments should be considered as trading advice. Trading any financial instrument is RISKY and may result in loss of capital including loss of principal. Past performance is not indicative of future results. Always understand the RISK before you trade.
Category: Professor's Comments