Professor’s Comments May 9, 2018

Posted by OMS  at May 9th, 2018

The markets were mostly flat yesterday after Monday’s light volume rally. The Dow finished up 3 points at 24,360.  The NASDAQ and SPX finished the day up 2 points and down 1 point, respectively.  Volume on the NYSE was moderate, coming in at 103 percent of its 10-day moving average.  There were 80 new highs and 67 new lows. 

In yesterday’s Comments I talked about how the markets probably needed a day or so before a breakout occurred, and that’s what happened.  But today could be different.

That’s because last night, the A-D oscillator generated a small change signal.  The signal occurred at the same time my combination VTI-volume indicator generated Buy Signals on the Dow and NASDAQ markets.  So, IF the markets make the BIG Move predicted by the A-D oscillator, they could start to break out of the triangle pattern they have been in for months.  IF this happens, the ensuing rally could take the markets to new highs.

Last night, The Professor had another 27 stocks highlighted as longs.  This goes with the 32 he had on Monday.  So, while he still isn’t highlighting the 50 stocks or more I need to see before I become aggressive, he’s certainly NOT sleeping like he normally does. He’s starting to see something.  It’s enough for me to continue adding to my ‘trial’ positions.

And that’s what I was doing yesterday.  I bought a few shares of the standard index ETFs, and a few of the very aggressive UDOW, an ETF that trades at 3X the Dow. 

Today, IF the markets start to move higher, I’ll look for opportunities to add to my positions.  This might not be so easy because IF the markets start to break out of the triangle, the move could be impulsive.  This is one of the reasons I bought a few ‘trial’ positions.  I wanted to have something on just in case an upside break-out occurred.

Anyhow, keep something in perspective when you go shopping today.  Ask yourself why you’re buying into this market?  I know why I am.  It’s because I’ve been patiently waiting during the last few months for the indexes to complete their triangle patterns.  I know that triangles are almost always consolidation patterns, where the price usually leaves the triangle in the same direction it entered the pattern.  In this case, the direction would be up.  So, I have that in my corner. 

Also, I now have valid Buy Signals on two markets from my combination VTI-volume indicator. And with the triangle projecting a move above the old high of Dow 26,617, it gives me a potential reward of over 2,000 Dow points from current levels.  Keep this in mind IF the market opens higher and you decide to go shopping for stocks today.

On the negative side, I’m still concerned about the Sector Ratio.  Last night, the Ratio came in at 19-5 negative.  But there was one major change that could be a ray of positive light.  The Computer Sector joined Energy, Leisure, Utilities, and Healthcare on the Strong List. Computers, unlike Utilities, are one of the sectors that could lead the market higher. And now they’re back on the strong List.  This gives me something to work with.  BTW, the Computers and Healthcare Sectors had the highest Delta Trend Scores (DYS) yesterday.  This is something I always pay attention to because large changes in DTS usually lead to out-sized moves in stocks in these sectors.

So IF the market starts to move higher today, I’ll be using the Strong Sector List to help me select a few stocks and ETFs in the Energy, Healthcare and Computer Sectors from the Member’s Watch List and Dean’s List.  BTW, the Leisure Sector is also strong now, so one of the stocks I’ll be watching is Disney (DIS).  The stock was down 0.69 cents yesterday to 101.79.  The stock appears to be completing a Three Lows to a Bottom (TLB) pattern off its January high of 113+.  IF DIS can move above 103.78 in the days ahead, it will have completed a ‘Rope Jump’ which would increase the odds that the January highs will be tested.

Another stock I’m watching in the Leisure Sector is Royal Caribbean (RCL).  Unlike Disney, Royal is still in the down trend its been in for the past few months. But it too has a TLB pattern.  My VTI-volume indicator is still negative on both DIS and RCL, so all I’m doing now is watching.  But IF the indicators turn positive, I’m a buyer of both.

For today, I’ll be focusing on stocks in the Energy, Healthcare, and Computer Sectors. Right now, there are many energy stocks on the MWL with nice patterns and positive indicators. Cisco Systems (CSCO) and Intel (INTC) are on the List.  Both have nice patterns, positive VTI-volume indicators and appear to be starting up trends.  

Acadia Healthcare (ACHC) is also on the List.  It too has a nice pattern with positive indicators.

With positive signals and a potential breakout at hand, I’m looking for opportunities to buy stocks.  If the breakout occurs, I’ll become more aggressive with my purchases.

That’s what I’m doing.

h

Market Signals for

05-09-2018

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

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The Hockey Stick Pattern
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