Professor’s Comments May 12, 2016

Posted by OMS  at May 12th, 2016

One day after the Dow gained 222 points, it fell 217 points to close at 17,711.  The only difference between the two days was that the volume on the decline was a lot more than on the advance. Yesterday’s volume was 96 percent or 13 percent more than the previous day’s 10-day average which is Bearish.  There were 139 new highs and 26 new lows.

Yesterday’s hard decline did not produce any significant changes to the cockpit indicators.  They remain mixed. 

It appears that the Head &Shoulders sub-pattern within the larger Rounding Top pattern continues to develop.  The neckline for this H&S pattern is at the 17,500 level.   A break of 17,500 would likely mean that Major Wave 3 down is underway.

My custom Money Flow indicator for gold (GLD) turned positive yesterday, so it’s possible that gold shares are starting major wave 3 up.  However, UUP, the positive ETF for the U.S. Dollar remains on the Dean’s List near the bottom.  My Money Flow indicator for the Dollar turned negative yesterday, so if UUP falls off the List in the days ahead, it would be a very positive sign for gold.  

All I’m doing now that I have a few ‘trial’ inverse positions established is waiting for the cockpit indicators to turn negative.  If they turn, I’ll add to my positions.

That’s what I’m doing,

h

Market Signals for

05-12-2016

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The Hockey Stick Pattern
The Creation of Waves and Trends
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