Professor’s Comments March 29, 2015 Update

Posted by OMS  at March 30th, 2015

With the Dow up 275 points, it appears that the wave 2 rally I talked about this weekend is underway.

The question now is how long will the rally continue?

Here’s the thing: With wave 2’s, you never really know how much they will retrace. They usually retrace 50 – 75 percent, but they can go a little higher. Right now, even though the rally could go higher as waves a-b-c unfold, the retracement is enough for me to start looking for shorts on the shorter term bars.

One of the places that I’m looking is in the transportation sector.

Last week I had a nice short on a local trucking stock that was highlighted by Emeritus. I took profits on Land Star Systems, LSTR, when it appeared that wave 1 down on the Dow appeared complete. But as I watched today, the stock continues to be weak, even though the overall market is having a nice rally day. So I want to re-establish that short.

I’m also looking to short a railroad, probably CNI.

Right now, IYT, the transportation ETF is positive on the 30 min bars. If it starts to turn negative, I will look to short LSTR and CNI.

That’s what I’m doing,

h

BTW, I know that several of my subscribers in the Jacksonville area either work for or own transportation stocks like LSTR or the local railroad, CXS.

CSX has a chart that is very similar to the chart of CNI. So if you currently own CSX or any stock with negative PT indicators, please be manage your shares carefully.

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
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