Professor’s Comments March 3, 2016

Posted by OMS  at March 3rd, 2016

The Dow fell 100 points early before closing up 34 points at 16.899.  Volume was heavy, coming in at 110 percent of its 10-day average.  There were 54 new highs and 15 new lows.

It appears that yesterday’s early pullback and late rally was a small wave 4 correction within wave 3 up within the Ending Diagonal pattern for wave ‘c’ up.

If this is the case, then the Dow should continue to rally a bit higher before wave 3 up completes, probably between 16,950 and 17,000.   After that there should be a small wave 4 retracement followed by a final push to the top. 

Right now it appears that the Dow will be topping somewhere between 17,000 -17,200.  The pattern suggests this will happen within the next two weeks.

There was a small change in the A-D oscillator last night, so we need to be on the lookout for a Big Move within the next 1-2 days.  If the Dow pushes toward 16,950 today, the Big Move could be to the downside for wave 4.  But it’s hard to tell.

The current wave count is telling me that trading from now to the top is going to be very choppy.  Most students should be asking themselves if it will be worth the trouble to get the final 100 – 300 points out of this market. 

Energy stocks had a nice day yesterday.  The money flow indicators in all of the energy stocks I watch continue to remain very strong.  I’m still mostly scalping energy stocks and not holding them overnight   However the energy stocks that I have been trading have now formed two lower lows in their ‘Blades’, so the consolidation process could be over. 

The DMI on DIG, my ‘Stick in the Sand’ for energy turned positive yesterday.  As long as this ETF remains positive, I will remain positive on energy.

Right now the DMI on GPOR is negative.  If it turns positive and the Money Flow indicator continues to remain strong, I will start holding my scalp trading positions overnight.  Same for EQT.

Students should also note that MRO has completed a TLB pattern and is now the leading energy stock on the Dean’s List.   Also, the top country ETF on the List is EWZ, the ETF for Brazil.  This is followed closely by EWC, the ETF for Canada.  Hmmm?  Both Brazil and Canada are oil producing countries.  Could the Dean be telling us something?

After all, it is March.

Still scalping energy.

That’s what I’m doing,

h

Market Signals for

03-03-2016

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The Hockey Stick Pattern
The Creation of Waves and Trends
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