Professor’s Comments October 25, 2016

Posted by OMS  at October 25th, 2016

The Dow rose about 129 points early, then spent the rest of the day giving back all but 77 of those points to close at 18,223.   Volume was moderate, coming in at 104 percent of its 10-day average.  There were 130 new highs and 26 new lows.

Stocks continue to trade in a narrow range between 18,050 and 18,600.  However, despite the boring pattern, it still appears that the best fit wave count is a five-wave down pattern that will complete near the 17,700 level to complete wave ‘D’ down.  This should happen IF the Dow breaks the 18,050 level in the days ahead. Then once wave ‘D’ down completes, the market will likely have a post-election rally for wave ‘E’ up to complete the larger Ending Diagonal Pattern.  This post-election relief rally will likely take the market to new highs into January, before the first down legs of the next Bear Market start to take effect.

Both the post-election rally and the down waves of the next Bear Market should present students with many out-sized trading opportunities.  But right now, the best fit for the overall pattern is a decline to 17,700 before the election, then a post-election relief rally into early next year followed by the initial waves of a Major Bear Market.

Gold slightly fell as the Dollar remained flat.  GLD fell 0.27 cents to close at 120.56.  If you look at a Daily chart of GLD, it appears that the ETF is consolidating near the 200-day moving average.  This move to the moving average has occurred after a TLB move to a bottom on 7 October at the 118.42 level.  So, IF GLD is going to move higher in the months ahead, the first challenge is a move up to the 200, then a consolidation along the 200.  This is what appears to be happening now.

The next move for GLD should be a test of the 50-day moving average near the 123.6 level.

After three days of consolidating along the 200, GLD has now formed a tiny Hockey Stick Pattern.  Once the ‘Blade’ of this small pattern completes, the ETF should have enough strength to test the 50-day moving average.  If this happens, and GLD ‘Jumps the Ropes’ while testing the 50, it would be very positive for gold.

Watching GLD.

That’s what I’m doing,

h

Market Signals for

10-25-2016

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

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.