Professor’s Comments October 27, 2016

Posted by OMS  at October 27th, 2016

The Dow fell over 100 points early, then rallied to close up 30 points at 18,199.   Volume was heavy, coming in at 113 percent of its 10-day average.  There were 45 new highs and 46 new lows.

Not much changed after yesterday’s trading.  The Dow continues to trade in a narrow range, bouncing from overbought to oversold conditions between 18,050 and 18,600.

At some point, stocks will start to break out of their narrow trading range.  Right now, the pattern continues to suggest a decline to the 17,700 level prior to the election, and then a rally to new highs once the election is decided.

The Tide and the Dean’s List are both negative.  However, the Money Flow indicators on the Dow and NASDAQ remain positive.  If the Money Flow indicators remain strong, the decline suggested by the current pattern will likely remain tame.  It’s why I believe it will be wave ‘D’ down within a larger Ending Diagonal Pattern.

Students should continue to watch for a downside break of the 18,050 level.  A break of 18,050 should cause the Dow to fall to 17,700 to complete wave ‘D’ down.  I continue to hold a few inverse index ETFs, which I plan to sell if the Dow moves closer to my target for wave ‘D’ down (17,700) or just prior to Election Day. 

Gold and the dollar both lost a little ground yesterday.  GLD fell 0.68 cents to 120.79.  It still appears that the metals are forming the ‘Bade’ of a small Hockey Stick pattern that will enable them to test resistance at slightly higher levels.  The near-term target for GLD is the 50-day moving average now at the 123.42 level.  A move above this level would constitute a ‘Rope Jump’ and be very positive for gold and mining stocks.

Watching.

That’s what I’m doing,

h

Market Signals for

10-27-2016

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.