Professor’s Comments June 1, 2017

Posted by OMS  at June 1st, 2017

The Dow fell 21 points, closing at 21,009.  Volume was heavy, coming in at 121 percent of its 10-day moving average.  There were 182 new highs and 98 new lows.

Yesterday’s decline appeared to be the initial waves of Wave ‘D’ down.  Remember, Wave “D” down is a corrective wave within a five wave consolidation triangle.  The one thing we know about a corrective wave is that it will NOT be straight down.  Students should expect choppy trading while Wave ‘D’ down is tracing out and take profits when they present themselves.  Otherwise those profits may evaporate the next day when the market retraces the previous day’s decline.

I’m still expecting Wave ‘D’ down on the Dow to complete near the 20,500 level if Dow continues to correct sideways. If Wave ‘D’ down starts to form a 3-3-5 flat, it could fall to the  20,100 level.  At this point, there is no way to tell.

There was another small change in the A-D oscillator yesterday, this time less than 6 points.  Small change signals like this usually lead to a Big Move in the Dow within the next 1-2 days. We’ll see.

Today is the first day of June, so the positive bias from end of month window dressing should be complete. However, with the May Jobs Report scheduled to be released at 8:30 am on Friday, traders will likely wait to see what the report says before taking positions. In other words, the Big Move could be postponed until after the Jobs Report is released.

The Sector Report was little changed.  The report continues to show a negative bias, with 11 strong and 13 weak sectors.  The Semis, Computers, Leisure, Utes, and Foods remain strong, with Specialty Banks, Autos, Energy, Service, and Financials being the weakest.

Gold and mining stocks bounced off their intraday lows to finish mostly higher.  GLD rose 0.48 cents to 120.62. The VTI on GLD continues to rise and now has a reading of 69.1. If the VTI continues to move up and rises above 70, look for gold to start trending higher. Once GLD goes into the Trend Mode, interest in mining stocks should also start to pick up.

My next report will be the WSR.

That’s what I’m doing,

h

Market Signals for

06-01-2017

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