Professor’s Comments June 14, 2018

Posted by OMS  at June 14th, 2018

The markets were modestly lower yesterday after the Fed raised interest rates a quarter of a point.  After being up for most of the day, the Dow finished down 120 points at 25,201.  The NASDAQ and SPX finished down 8 and 11 points, respectively. Volume on the NYSE was moderate, coming in at 107 percent of its 10-day moving average.  There were 104 new highs and 33 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.

Yesterday’s 100 point+ move the Dow was predicted by Monday’s small change signal from the A-D oscillator.  Given that all my indicators were positive, I was somewhat surprised that the 100+-point move was down.  I used the opportunity to add a few shares to my long positions.  Remember, when the current Wave 5 rally started, I said it would NOT be straight up. I said there would be pullback along the way as the rally progressed and I would view them a buying opportunity. This is why I was adding to my positions yesterday. 

Late in the day, I saw the 2-period RSI on the Dow was oversold at 19.92, with the VTI-volume indicator AND the 35-period CCI both in the Trend Mode.  In other words, the conditions for a Rifle Trade were present.  With Rifle Trades, I add to my position when the market becomes oversold and then sell the additional shares when the 2-period RSI becomes overbought.  

The Sector Ratio fell to 18-6 positive after yesterday’s session.  The Strong Sector List continues to be led Healthcare, Energy, Retail, Consumer Products, Computers, and Semiconductors.  The Weak Sector List was led by Household Products, Telecoms, Leisure, CapGoods, and Foods.  As long as the Sector Ratio maintains its positive bias, Buying and HOLDING stocks remains my primary strategy.

Gold and the miners were up slightly yesterday.  GLD finished up 0.37 cents at 123.19. With GLD moving sideways for the past few weeks, the Bollinger Bands on GLD have tightened to the point where it appears ready to make a Big Move. Almost any move up on GLD now will likely cause my combination VTI-volume indicator to generate a Buy Signal.  The VTI-volume indicator on silver (SLV) remains positive. Yesterday SLV was up 0.21 cents to 16.08.  My target for SLV remains near the 23-24 level. BTW, yesterday’s rise in SLV caused its VTI-volume indicator to enter the Trend Mode. If silver continues to trend, it will likely take gold along with it. Pay attention to the metals now.

That’s what I’m doing,

h

Market Signals for

06-14-2018

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