Professor’s Comments May 29, 2019
Posted by OMS at May 29th, 2019
The markets rose early, then fell hard into the close. After being up 137 points, the Dow fell 375 points intraday, closing with a loss of 238 points at 25,348. The NASDAQ and SPX finished down 30 and 23 points, respectively. Volume on the NYSE was moderate, coming in at 104 percent of its 10-day moving average. There were 127 new highs and 108 new lows. Students should note that the number of new lows continues to increase and is now over 100. Anytime the number of new lows exceeds 100, it’s a Red Flag.
Yesterday’s early rise and late decline was likely part of wave ‘c’ down within Wave ‘B’ down. It still appears that the Dow begins will test the 25,000+/- level before Wave ‘B’ down completes. The 25,000 to 25,200 level remains critical to the future direction of the markets as this level is the ‘Neckline’ of a Head & Shoulders Pattern. If the 25,000 level is broken, the Dow will likely decline to the 24,000 level or lower. If this happens, the odds are high that the next Bear Market has arrived.
Yesterday, my custom Money Flow indicator on the Dow turned negative for the first time since 28 March. If you consider that except for that brief period in mid-March, the indicator has been positive since 31 December 2018. So, the fact that the Money Flow indicator turned negative yesterday is a pretty Big Deal. It tells me that the Big Boys have begun to sell. They are no longer just moving money around between sectors. Now they’re moving money out of the markets. This is a Major change that needs to be watched.
The market timing indicators for the Dow and SPX moved to Sell Signals after yesterday’s session. So now, The DOW, SPX, NASDAQ, and Russell 2K are all on Sell Signals. It’s still NOT clear if the current decline is Wave ‘B’ down or something larger. As long as the 25,000 level holds, there is still a change that the markets could rally once Wave ‘B’ down completes. However, now that the market timing signals have moved to Sell Signals, the odds for a break below 25,000 have increased.
The Tide and the Dean’s List remain negative. The DMIs remain Negative.
The Sector Ratio stayed at 17-7 negative after yesterday’s session. The Strong List continues to be led by Real Estate, Household Produces, Insurance, Telecoms and Foods. All defensive sectors. This is NOT the List you want to see if you’re Bullish on the markets. The Weak Sector List continues to be led by Service, Energy, Semiconductors, Retail, and Material.
Model Portfolio: There were NO Changes to the Model after yesterday’s session. The Model continues to hold 500 shares of DXD and QID. The Model Portfolio’s cash balance remains at $79,169. The Model is still void of gold and looking for an opportunity to re-enter the inverse crude oil trade. Crude oil prices are tied to the overall economy. So, IF the ‘Neckline’ in equities is broken, I’d feel better about the inverse crude oil trade. But right now, because crude its still developing the legs of its triangle, I’m in no hurry to re-enter the trade.
The Model Portfolio is being shown for educational purposed only. The Buy/Sell actions in the Model Portfolio are made based on technical indicators that can and do change frequently and should NOT be considered as recommendations for trading an actual portfolio. Any gain or loss in the Model Portfolio should not be used to predict future performance of the Model.
That’s what I’m doing,
h
Market Signals for
05-29-2019
DMI (DIA) | NEG |
DMI (QQQ) | NEG |
A/D OSC | |
DEANs LIST | NEG |
THE TIDE | NEG |
Index | Signal | Signal Date |
---|---|---|
DOW | NEG | 28 May 2019 |
NASDAQ | NEG | 20 May 2019 |
GOLD | NEU | 23 May 2019 |
U.S. DOLLAR | POS | 16 May 2019 |
BONDS | POS | 23 May 2019 |
CRUDE OIL | NEG | 23 May 2019 |
One hour video recorded from May 28, 2016 The Professor’s Signs of a Major Market Turn – Prospectives and the Projected Timing and Levels One hour streaming video – includes webinar handouts The Professor usually holds an update class whenever the Market looks like it may be making a major turn. If you have been following the Professor’s Comments you know that a turn is due….. LEARN MORE
Not sure of the terminology we use? Check out these articles
The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ
All of the commentary expressed in this site and any attachments are opinions of the author, subject to change, and provided for educational purposes only. Nothing in this commentary or any attachments should be considered as trading advice. Trading any financial instrument is RISKY and may result in loss of capital including loss of principal. Past performance is not indicative of future results. Always understand the RISK before you trade.
Category: Professor's Comments