Professor’s Comments November 29, 2022

Posted by OMS  at November 29th, 2022

Things could be changing with the markets. It’s too soon to tell, but after watching the indexes tonight here in Munich, it appears that today’s decline is impulsive. So far, the Dow is down about 450 points which puts the large cap index back under 34,000.  If you look at the 5 min chart, you can see how the five waves developed into the 12:50 mark.  If I’m correct about the market turning. once this decline completes, there should be a small retracement wave that will set up the next series of down waves.  These too should be Impulsive and if they are, it will increase the odds that Wave 3 down is starting.

Remember, the positive Thanksgiving Holiday bias I talked about last week is no longer present to support the market.  So, the termination patterns that are present on all the indexes should now become dominant.  These patterns should be impacted by news of unrest in Chain, less than stellar company earnings, and several key data reports as the week progresses.

As I mentioned last weekend, it still appears that the Dow is nearing completion of an a-b-c flat pattern for its Wave 2. The NASDAQ, S&P and RUT may have completed 3-3-5 Double Zig-Zag Patterns for their Wave 2s. All of three of these major indexes are still below their 15 November highs, which creates an intermarket divergence with the 30 stocks on the Dow. So, if we start to see impulsive waves to the downside now, there’s good chance that Wave 3 down is starting.

My Trades:  Because of the first set of five waves down, I’m starting to buy trial positions in SQQQ, TZA, SDOW and SARK in that order.  I still believe the NASDAQ and RUT are the weakest indexes and should lead the market lower. 

Even though the Dow is down 450 points, it’ still early. This market will not go straight down.  There will be retracement rallies during the decline.  I will become more aggressive once I see the indicators and Lists turn negative.  I’m also stating to hold a few inverse positions in my IRA,

That’s what I’m doing,

h

Remember: Always check the Bias on BOTH the short-term AND longer term (Daily) bars before you place a trade. That way you will know if the trade is with or against the major trend. Then once you know the trend, just trade the Arrows. Enter on a Green and exit on a Red. If the Trend Indicator moves above the 50 level, I add shares to my initial position. The Trend Indicator is a very important money management tool. It’s faster than the Bias and helps identify the start of a trend

Market Signals for

11-29-2022

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
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