Professor’s Comments June 13, 2018

Posted by OMS  at June 13th, 2018

The markets were mixed yesterday. The NASDAQ and Russell 2K made new all-time highs while the Dow was down 2 points at 25,321.  The SPX was up 5 points. Volume on the NYSE was moderate, coming in at 97 percent of its 10-day moving average.  There were 129 new highs and 29 new lows.

There were no changes to any of the cockpit indicators after yesterday’s trading.  All indicators on the major indexes remain on Buy Signals with my combination VTI-volume indicator in the Up-Trend Mode.  My upside target for Wave 5 up remains near or above the 26 January high of 26,616.

The Fed will announce its latest policy on interest rates at 2pm today.  A rise of a quarter point is widely expected.  Raising interest rates is positive for the banks, but not for consumers. It means that consumers will eventually pay more for the things they buy. The higher cost of money effectively reduces the money supply.  This Fed tightening is occurring at the same time it is ‘unwinding’ (selling) assets from its balance sheet at the rate of $30 Billion per month.  Students should understand that both of these Fed policies will slow the U.S. economy and lead to a major pullback in stocks once Wave 5 up completes. 

Monday’s small change signal from the A-D oscillator is still on the board.  So, with the Fed announcement scheduled for 2pm today, a Big Move after the Fed announcement is possible.

The Sector Ratio remained at 23-1 positive after yesterday’s session.  The Strong Sector List continues to be led Retail, Healthcare, Energy, Consumer Products, Computers, and Semiconductors.  The only Weak Sector was Household Products.  With the Sector Ratio extremely strong now and major indexes in the Up-Trend Mode, I continue to look for opportunities to Buy and HOLD stocks and ETFs in the strongest sectors.  As long as the Sector Ratio maintains its positive bias, Buying and HOLDING stocks remains my primary strategy.

With Healthcare near the top of the Strong Sector List, two of the stocks I’m watching are Cardinal Health (CAH) and Acadia Healthcare (ACHC).  My VTI-volume indicator on CAH is neutral, but the Bollinger Bands have tightened to the point where a Big Move is possible IF the VTI-volume indicator turns positive.  The VTI-volume indicator on ACHC is already positive.  The Hockey Stick pattern on ACHC that has been developing since mid-November 2017, suggests further upside is likely.

Gold and the miners were down slightly yesterday.  GLD finished down 0.41 cents at 122.82. I’m still waiting for gold to generate a new Buy Signal.  My VTI-volume indicator on gold is still neutral.  The VTI-volume indicator on SLV remains positive.

Waiting for the Fed announcement.

That’s what I’m doing,

h

Market Signals for

06-13-2018

One hour video recorded from May 28, 2016 The Professor’s Signs of a Major Market Turn – Prospectives and the Projected Timing and Levels One hour streaming video – includes webinar handouts The Professor usually holds an update class whenever the Market looks like it may be making a major turn. If you have been following the Professor’s Comments you know that a turn is due….. LEARN MORE

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The Hockey Stick Pattern
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