Professor’s Comments November 18, 2016
Posted by OMS at November 18th, 2016
The Dow rose 36 points, closing at 18,904. Volume was low again, coming in at 82 percent of its 10-day average. There were 176 new highs and 25 new lows.
Yesterday’s low volume rally appeared to be part of small sideways consolidation triangle that has been forming on the Dow for the past 4 days. If this is the case, it’s likely the ‘b’ wave of an a-b-c move to a final top. If the market pulls back today, it would complete the last leg of this small triangle, setting the stage for the final rally.
There was another small change in the A-D oscillator last night. This was the second small change signal in as many days. So, we need to be prepared for a Big Move within 1-2 days. If the Big Move does not occur today, and the market pulls back 40-70 points, the odds are high that the final rally will occur next week into the Bullish Thanksgiving Holiday period.
I’m still using the 19,000+ level on the Dow as my target. BTW, the target I’m using for the S&P is the 2,225 – 2,240+ level. After the Holiday…be careful.
I had a nice day scalping the two stocks I mentioned yesterday from the Honor Roll. Checkpoint Software (CHKP) finished the day up 0.65 cents at 83.8. Akamai Technologies finished 0.70 cents higher at 66.6. Both stocks provided nice entry points on the short-term bars.
If the market pulls back early today, I will continue to look for entry points on these two stocks based on the nice Hockey Stick patterns they have developed on the Daily Charts. Given that today is a Friday, and I usually don’t like to hold stocks I’m scalping or Position Trading over the weekend, I’ll have a decision to make later today, especially if I have scalping profits.
If I have a profit, I’ll likely book some of it and hold a small percentage of the shares over the weekend. That way if the market opens higher on Monday, because of the small change in the A-D oscillator, I’ll have some skin in the game.
On the other hand, if the market continues to fall today and makes the Big Move today, I don’t want to be holding anything over the weekend. If the small triangle pattern I talked about above is broken to the downside, there is a possibility that the larger pattern for the Dow is truncating and the top is in. I don’t think this will happen, but you never know.
Gold continues to be pressured by a strong Dollar. For a while yesterday, it looked like UUP, the ETF for the Dollar would close below its Upper Bollinger Band and generate a Sell Signal. However, the ETF rallied into the close and finished 0.15 cents higher at 26.10. The Upper Bollinger Band on GLD is 26.05. The VTI on GLD remains negative, but the 2-period RSI is starting to show positive divergence from oversold levels. This usually means that a bottom is near, but not in yet.
Bonds and oil got clobbered again yesterday, with TLT, the Bond ETF, falling 1.81 to 121.2. Students should watch TLT and TMF in the days ahead. Both ETFs are now trading at EXTREME lows as equities have rallied. I strongly believe that once the equity market tops, money will start pouring into U.S Bonds and drive these two ETFs to significantly higher prices. TBT the inverse Bond ETF replaced TLT on the Dean’s List on 30 October. At the time TBT was trading at 31.60. Yesterday TBT closed at 39.32. If TBT drops off the List next week and TLT appears, I’m a buyer.
The Daily charts for Bonds, Oil, and the metals, are setting up for significant rallies once the equity markets top. So, watch for TLT, TMF, DIG, GLD, and other mining stocks to appear on the Dean’s List. There should be many opportunities to establish trading and longer term positions in these sectors.
That’s what I’m doing,
h
Market Signals for
11-18-2016
DMI (DIA) | POS |
DMI (QQQ) | NEG |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | SM CHG |
DEANs LIST | POS |
THE TIDE | POS |
SUM IND | POS |
VTI | POS-T |
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
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Category: Professor's Comments