Professor’s Comments May 1, 2014

Posted by OMS  at May 1st, 2014

The Dow rose 45 points, closing at 16,580.. The Dow got as high as 16,592, only 8 points from 16,600, the level I need to see broken before I can confirm that wave 3 up is underway. Volume was moderate on the rally, coming in at 107 percent of its 10 day average.  There were 108 new highs and 38 new lows.

The BLS will be releasing last month’s Jobs Report tomorrow morning at 8:30. And because of this, it’s likely that traders will stay mostly on the sidelines today.

All of the indexes that I’m watching appear to be poised to move higher, but because no sector is stepping up to the plate to take the lead, the odds are high that we will see some choppy trading ahead.

The Dean’s List is positive, but even though DIA, DDM, SPY and SSO are on the List, the two big inverse technology index ETFs for the NASDAQ and Russell 2000 are still present.  Also, the DMI on the QQQ is still negative, so clearly technology and the small caps are NOT giving the ‘go ahead’.

I stopped by The Professor last night on my way to the Social, and he only had 23 stocks identified as trending to the long side.  It appears that he  too wants to see more participation before he’s ready to change his cautious stance.

So with the Dow overbought and at the top of its trading range, negative signals in technology, and no strong trend signal coming from The Professor, I’m going to wait for tomorrow’s Jobs Report before I commit any new money to this market.

I did short a few shares of gold yesterday as a trade by buying DUST, a leveraged inverse gold ETF.  If gold starts to break lower today, I will likely close this position later today.  I do not want to be holding a leveraged gold ETFs in front of tomorrow’s Jobs Report.  Jobs Report Fridays usually make for EXTREMELY volatile trading, so if I have a profit today, I will book it. If I’m right about gold going lower, there will be plenty of time to re-establish this trade.

Unless something major happens today, which I don’t expect, I will wait until after tomorrow morning’s announcement before posting new Comments.

That’s what I’m doing,

h

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