Professor’s Comments May 24, 2017
Posted by OMS at May 24th, 2017
The Dow rose 43 points yesterday, closing at 20,938. Volume was moderate, coming in at 90 percent of its 10-day average. There were 150 new highs and 20 new lows.
Not much changed after yesterday’s trading.
The Dow and SPX continue to trade near the upper level of a trading range within a sideways triangle. It’s still not clear if the current wave is Wave ‘D’ up or sub-wave ‘c’ up of Wave ‘C’ down. As long as the Dow stays below 21,169, the choppy trading within the triangle should continue until all five waves of the pattern are complete, probably in mid-June.
The recent rally on the Dow has caused the Russell 2K to rally back to moving average resistance near the 1,380 level. This 3-day rally has formed the ‘Blade’ of a declining ‘Stick’ made on 17 May. So now IF the RUT starts to break below 1,380, it could start a move down to the 1,320 level. A break below 1,320 would constitute a ‘Rope Jump’ which would identify the move as Major Wave 1 down of a new Bear Market. Continue to watch the RUT as an indicator of things to come with the other indexes.
The 2-period RSI on the Dow closed with a slightly oversold reading of 84.75 with the 35-period CCI showing No Trend. With the Dow trading near the upper portion of its trading range, the next wave down of the triangle should start within the next day or so.
Yesterday’s Sector Report had 9 strong and 13 weak sectors. The Semis, Leisure, Computers, Food and Utility Sectors continue to show strength with Autos, Specialty Banks, Real Estate, Service, and Telecoms lagging. If the weak Sectors continue in the majority, it’s likely the Dow and SPX will remain in the triangle.
Gold pulled back yesterday as expected from overbought conditions. GLD fell 0.76 cents to 119.14. The 2-period RSI closed at 38.64 with the VTI and CCI showing No Trend. If the 2-period RSI drops below 30, it will set-up a Rifle Trade on gold. I remain on a Buy Signal for gold.
That’s what I’m doing,
h
Market Signals for
05-24-2017
DMI (DIA) | NEG |
DMI (QQQ) | POS |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | NEU |
THE TIDE | POS |
SUM IND | POS |
VTI | POS |
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