Professor’s Comments November 4, 2015

Posted by OMS  at November 4th, 2015

The Dow rose to a new rally high yesterday before pulling back to close up 89 points at 17,918.  Volume was moderate, coming in at 105 percent of its 10-day average.  There were 112 new highs and 23 new lows.

Not much changed from yesterday’s comments.  It still appears that the market is very close to a top.  Yesterday’s early rally and late pullback was the kind of trading action I said we’d likely as the final sub-waves of wave ‘c’ of Major Wave 2 up complete.

All of the sub-waves of the Ending Diagonal Pattern that started on 29 September appear to be in place. 

I continue to see large negative divergences in many of my indicators, so once the upside momentum is checked, these indicators should start to turn negative.

The thing to watch will be for a break of the lower trend line of the Ending Diagonal Pattern on the Dow (DIA). Right now, that lower trend line is located just under the 178 level on the DIA.  Because the target for an Ending Diagonal Pattern is always where the pattern began, a break of 178 should send the DIA back down to the 160 level which is where the pattern began on 29 September.

There was another small change in the AD oscillator last night, so we need to be on the lookout for a Big Move within the next 1-2 days.

BTW, as the equity market have been rallying, gold stocks have been pulling back to form their wave 2 ‘Blades’.  You might want to start watching the shorter term bars now for potential entry points.

That’s what I’m doing,

h

Market Signals for

11-04-2015

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