Professor’s Comments May 22, 2018

Posted by OMS  at May 22nd, 2018

The markets rose impulsively on Monday.  The Dow finished up 298 points, closing at 25,013, The NASDAQ and SPX were up 40 and 20 points, respectively. Volume on the NYSE was moderate, coming in at 91 percent of its 10-day average.  There were 191 new highs and 57 new lows.

Monday’s impulsive rally was the Big Move predicted by the two consecutive small change signals generated by the A-D oscillator on Thursday and Friday.  The move was likely the start of Wave 3 of Major Wave 5 up.  If this is the case, the rally should have a lot more upside to go before it completes. My immediate target for Major Wave 5 up is the 26 January high of 26,617. If the current rally is the start of Major Wave 5 up, it should easily exceed this level.  If Major Wave 5 up has a typical ‘through over rally”, the high could approach the 28,000 level.

Monday’s rally caused the VTI on the NASDAQ to turn from negative to positive and enter the Up Trend Zone.  So now that my key market timing indicators for the Dow and NASDAQ are in the Trend Zone. I’m looking to buy and hold stocks. The time for scalp trading is over.  The VTI and CCI are telling me the market is entering an Up Trend. With minimum upside targets over 1,600 points away, the Up Trend could be a good one.

Monday’s Sector Ratio increased to 15-8 positive.  Energy, Healthcare, Cap Equipment, Consumer Products, Media, and Leisure were the Strongest Sectors. The Financials moved on to the Strong List, near the bottom.  The Semiconductors and Banks still have not appeared on the Strong List. If yesterday’s breakout rally is the start of Wave 3 of Major Wave 5 up, I believe these sectors and others will start to appear on the Strong List. This should cause the Sector Ratio to show numbers close to or better than 20-4 positive.  Watch for it to happen.  It will confirm that Major Wave 5 up is underway.

Gold and Silver appear to be nearing completion of their triangle patterns. The Materials Sector has moved on to the Strong Sector List near the bottom.  If I’m right and the metals are starting their next major move up, look for the Materials Sector to move into the top 5 Sectors on the Strong List.

Buying and holding stocks in the strongest sectors.

That’s what I’m doing,

h

Market Signals for

05-22-2018

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