Professor’s Comments November 2, 2021
Posted by OMS at November 2nd, 2021
The markets rose slightly on Monday, with small cap issues seeing the most gains. The Dow finished with a gain of 98 points, closing at 35,9139. The NASDAQ and S&P were up 99 and 8 points, respectively. Volume on the NYSE was moderate, coming in at 100 percent of its 10-day moving average. There were 209 new highs and 20 new lows.
The indexes continue to look like they are working their way through Wave 5 up toward the targets I discussed several weeks ago when they broke out of their sideways triangle patterns for consolidation Wave 4. Those targets are 36,000 to 36,500 on the Dow and 4,600 to 4,650 on the S&P. The NASDAQ’s target is less clear, but it should be slightly above the 16,000 level.
While yesterday’s solid breadth tends to tilt the odds toward higher prices in the indexes, it’s still possible that the market has topped and could start lower at any time now. That’s because all the indexes have now made five complete waves to the upside with yesterday’s highs. If you look at a 15-minute chart of the S&P, you can see that after yesterday’s opening high, the index pulled back two bars later to make a low for the day, and then went on to form an a-b-c retracement pattern for a possible wave 2 into the close. This isn’t much to go on right now, but coming where it is in the overall pattern, the move certainly looks strange and out of place. We will know more about this potential pattern IF the indexes begin to pull back hard today. The thing to watch for is a decline below 4,590 without exceeding yesterday’s high. If this happens, the odds will start to favor the Bearish case. Otherwise, I expect the market to chop higher.
The Market Timing Indicators for the Dow (DIA), S&P (SPY), and NASDAQ (QQQ) remain Positive.
The Scalp Trading Indicators for the Dow (DIA), S&P (SPY), and NASDAQ (QQQ) are also Positive.
The Dean’s List and the Tide remain Positive.
The Sector Ratio weakened slightly to 19-5 Positive after yesterday’s session. The top five strong sectors were Energy (7), Autos (4), Semiconductors (3), Service (3), and Banks (3).
The top five weak sectors were Media (-1), Technology (-1), PharmaBio (-1), Foods (0), and Household Products (0).
Top Stocks: Once again, yesterday was all about the cryptos and crypto miners. As a supplement to the WSR, I posted a few charts that showed how triangle patterns were forming on the miners. Triangles are consolidation patterns that give prices a chance to rest after making large moves. Once complete, and prices start to break out of their triangles, the price usually continues in the direction it entered the pattern. In this case, the direction should be up. So, with the Crypto miners at or near the top of my Lists, it wasn’t surprising to see them have a big day.
Marathon Digital (MARA) was my first trade. The stock was on a confirmed Green Arrow from the 51.67 level on Friday. Talk about a no-brainer! The stock opened at 52.34 and continued to move higher reaching an intraday high of 57.79 before pulling back. I was trading MASRA on the 12s, so the Safety Valve took me out of the trade at 57.22, just before a confirmed Red Arrow was generated. I then stayed on the side lines, and watched the stock pull back to the 53.46 level, before another Green Arrow was generated at the 15.06 mark, which resulted in another gain of over a point into the close. So, IF you used the Arrows, the total gain for the day on MARA was just under 6 points. In other words, if you traded 500 shares of the stock and followed the Arrows, you would have made about $2,940. Not bad for a day’s work.
But the day was not complete. RIOT, one of the other crypto miners I highlighted as being in a triangle, was also on the move. The stock opened higher after generating a confirmed Green Arrow on Friday. An entry near the open of 27.01 would have resulted in a gain of about 1.75 points less than two hours later, when the Safety Valve told you to exit the trade. One bar after the Safety Valve exit, the stock generated a Red Arrow, telling it was time to take a break for lunch. The stock continued to decline for the rest of the day, but as you were safely on the side lines. Another $875 gain on 500 shares. Nice.
Ok, I’m not gonna tell you again. If you didn’t buy the Update Class and don’t want to trade with the new Arrows, that’s OK. It’s entirely up to you. I’m not going to rub it in. But I do want you to be honest with yourself. If you made a mistake and for some reason missed the Class and are still trading with old technology trading platforms, like Trade Station or Schwab, that don’t have the Arrows, be honest with yourself and ask why? Yesterday, by simply following the Arrows, you would have made over $3,000 trading 500 shares of two stocks. The price for the Arrows is now $399. But if you send me an email today and say, Hank, “the dog ate Dave’s announcement email”, you’ll get the Class for the pre-webinar price of $199. No, you won’t get it for the original price of $99. That won’t happen. That’s over. I only did that because a most of my students are EXTREMELY loyal and sign up for my Update Classes immediately. So, they get rewarded. Those that stay on the fence get charged more. In the future the price will start at $399. So, like I said, think about it…but don’t think too long.
Also remember, if you signed up for my original Scalp Trading Class, you got the follow-on training for free and were invited to buy the Arrows webinar. Those students who didn’t buy the Scalp Trading Class did not get the email announcing the Arrows Update Class. I did this because I thought it wasn’t fair to those students who paid $249 for the ST Class. That’s why the Arrows Class was only $99 for them. So now you can see why I raised the price of the Arrows Class to $399. It’s basically an improvement to the ST Class with all the new indicators. So, at $199, today only, it’s a steal! But like I said at the beginning, I’m NOT going to tell you to do it. You do the math…$199 for two trades that made over $3K in one day. Hmmm?
Ok, today, I plan top do the same thing I did yesterday…. follow the Arrows. MARA is at the top of the MWL followed by Coinbase (COIN). Several of the stocks I mentioned in last week’s webinar, like Nvidia (NVDA), are also high on the List, but given the triangle pattern, I’m going to stick with the miners. Besides, If the market is going to pullback today, the miners will likely see some additional strength. People are starting to get concerned about the shortages, inflation and the plans for increased government spending. A poll came out yesterday showing that less than 25 percent of the people feel that the country is headed in the right direction. That’s pretty low and is causing people to worry about the dollar. More people are now looking at Bitcoin as a store of value, perhaps even replacing gold. So, with the cryptos at the top of my Lists, I’m gonna go with the flow.
BTW, If you are trading the arrows on the 2 hour charts, you will notice that a Green Arrow was generated on MARA at 11:30 last Friday at 51.21. So, for the past two days and into today, MARA is still on a confirmed Green Arrow with the stock set to open more than two points higher.
Bottom Line: Professionals and others who can’t spend all day watching their computers should pay more attention to the Arrows on the longer term charts. The new arrows will make your life a whole lot easier. Follow the arrows.
That’s what I’m doing.
h
One more BTW, …. please take some time today and think about what I said above about the Arrows. You should know by now that I’m not in this for the money. I do this for you. The arrows are the best thing I have ever done to help make your trading easier and more profitable.
Also, please tell your friends and co-workers about the Arrows Class. Dave will give you a referral fee for doing it. Thank you.
Market Signals for
11-02-2021
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 15 Oct 2021 |
NASDAQ | POS | 19 Oct 2021 |
GOLD | POS | 01 Nov 2021 |
U.S. DOLLAR | POS | 17 Sep 2021 |
BONDS | NEU | 29 Oct 2021 |
CRUDE OIL | POS | 15 Sep 2021 |
CRYPTO | POS | 04 Oct 2021 |
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