Professor’s Comments October 14, 2015

Posted by OMS  at October 14th, 2015

The Dow chopped around during the early part of yesterday’s session, but ended down 50 points at the close.  NYSE volume increased during the decline, which is not something you want to see if you’re Bullish.  There were 48 new highs and 17 new lows.

Yesterday’s choppy trading appeared to be associated with the completion of Major Wave 2 up.  There is no way to tell yet, but if the Dow starts to drop impulsively during the next few days AND breaks below 16,800, it would be the first indication that the next down wave is starting.  The 16,800 level is where the 50-day moving average is currently located so this level represents important support.  If the 16,800 level is broken, I will then start to watch for a break of 16,502 to confirm the start of Major Wave 3 down.

After four consecutive days of A-D oscillator readings above 200, the oscillator finally fell to 142.34.  A reading like this indicates that the market is still at overbought levels, which should continue to pressure equity prices.

Gold continued to push higher, with GLD rising 0.55 cents to 11.86.  GLD is now less than half a point from moving above its 200-day moving average.  If this ‘Rope Jump’ occurs in the next few days, it would be a good indication that gold has completed its 2 year corrective process and is starting Major Wave 5 up.  The fact that the Money Flow indicator on GLD turned positive yesterday is another positive sign.

GDX also rose 0.09 cents yesterday, closing at 15.87.  The ETF appears to be forming a small ‘Blade’ to support its next move up which should be a ‘Rope Jump’ above 17.32. 

Gold is starting to look very interesting.

That’s what I’m doing,

h

Market Signals for

10-14-2015

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The Hockey Stick Pattern
The Creation of Waves and Trends
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