Professor’s Comments March 13, 2019

Posted by OMS  at March 13th, 2019

The markets were mixed yesterday.  The Dow was down 96 points, closing at 25,555.  The decline was mostly due to Boeing which dropped over 6 percent on concerns that their new 737 MAX airplane might not be safe.  Investors are worried that the second crash in five months could impact orders for the 600 new planes. The NASDAQ and SPX were up 33 and 8 points, respectively.  Volume on the NYSE was moderate, coming in at 90 percent of its 10-day moving average. There were 143 new highs and 14 new lows. 

There were NO CHANGES to the market timing signals for equities after yesterday’s session.  The Dow (DIA) remains on a Neutral Signal from a Sell.  The same indicator is showing a Neutral Signal for the NASDAQ-100 (QQQ), S&P500 (SPY), and Russell 2K.

With no changes to the signals, it’s still unclear whether the recent up-down trading action of the past few days is associated with corrective wave ‘a’ down within Wave 2 down OR the start of the final rally wave (wave 5 up) within Wave 1 up.  We’ll just have to see what happens during the next few days.  If the market begins to fall again later this week, the odds will shift in favor of the Wave 2 decline.

The Sector Ratio remains at 23-1 positive with Semiconductors, Household Products, Computers, Real Estate, and Technology leading the Strong List.  The fact that three ‘technology’ sectors are still on the Strong List is a concern for any Bearish scenario.  The only Weak Sector was FoodDrugs.

Gold and mining stocks rallied yesterday.  GLD rose 0.74 cents to 122.98.  Yesterday’s rally caused the indicators on several of the mining stocks I watch to generate Buy Signals.  However, gold (the metal) is still on a Sell.  With mixed signals between the miners and the base metal I’m still watching from the sidelines and being patient.

Crude Oil (UCO) rose 0.06 cents to 19.51 after its VTI-volume indicator moved back to a Buy Signal (from Neutral).  I’m still watching for UCO to test resistance at 20.24 after completing all five waves of its consolidation triangle.  A break above 20.24 would project a move to the 23+ level.

Model Portfolio:  There were NO CHANGES to the Model Portfolio after yesterday’s session.  The Model remains 25 percent invested in Crude Oil (UCO), 25 percent invested in DXD, the inverse ETF for the Dow, and owns 1,000 shares of TZA, a 3X leveraged ETF for the Russell 2K.  The remainder of the Model, just under 40 percent, is in cash.  The Model is being shown for educational purposed only.  The Buy/Sell actions in the Model Portfolio are made based on technical indicators that can and do change frequently and should not be considered as recommendations for trading an actual portfolio. 

BTW, the shares of Crude Oil (UCO) are carrying the Model Portfolio at this point, up 3.83 percent.  Overall the Model is currently showing a gain of 0.84 percent.  With the possibility of either a corrective Wave 2 beginning or a Wave 1 up that’s still underway, the Model was started at an EXTREMELY difficult time, especially for one that uses leveraged ETFs.  One of the things I’m monitoring on the Model is the average draw down vs. the rate of return.  With leveraged ETFs, drawn down is always something that must be monitored closely as it can quickly impact the performance of the Model.  Market turns, where the direction of the market is uncertain (CCI at 29.8, so there’s NO Trend) are places where draw downs can be high.  In other words, the current period will be a real stress test for the Model.  So far, the average draw down has been limited to 2.29 percent.  If the timing indicators can keep the average draw down at reasonable levels, the Model should do fine once the overall direction of the market is resolved.  We’ll see.

That’s what I’m doing,

h

Market Signals for

03-13-2019

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

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.