Professor’s Comments September 20, 2018

Posted by OMS  at September 20th, 2018

The markets were mixed yesterday.  The Dow had another good day finishing up 159 points at 25,406.  The large cap index got as high as 26,464.  The technology laden NASDAQ was down 6 points while the broader SPX was only up 4 points.  Volume on the NYSE was moderate, coming in at 107 percent of its 10-day moving average.  New lows continued to outpace the new highs by a 100-74 margin.  Students should pay particular attention to this negative divergence as it usually means a top of major significance is approaching.

Yesterday’s mixed session produced two changes to my market timing indicators. The VTI-volume indicator on the NASDAQ turned negative. The same indicator on the Dow remains positive. BTW, the Dow is now up 434 points since the VTI-volume indicator turned positive. The market timing indicator for gold and the Dollar remains neutral, but negative for Bonds.  The indicator for Crude Oil changed from neutral to positive.

The QQQ got as low as 181.51 yesterday, still above the critical 180.54 level.  After looking at yesterday’s action, it’s possible that the NASDAQ-100 topped on 30 August at the 187.52 level and that the last few days of trading have been part of a retracement ‘Blade’ for minor wave 2 up.  If this is the case, a break of the 180.54 level would mean that the next wave down would be minor wave 3 down of Major Wave 1 down.  The reason this is important is because it would mean that the next Bear Market for large cap technology stocks has started.  Students holding large cap technology stocks should watch the 180.54 level on the Q’s.  It’s a very important level.

The Sector Ratio increased to 16-8 after yesterday’s session.  However all the sectors added to the Strong List have Relative Strengths of 0, so I wouldn’t get too excited about the slight increase. 

The Strong Sector List continues to be dominated by the ‘defensive’ sectors like Household Products, Transportation, Telecoms, FoodDrugs, and PharmaBio.  Technology continues to be noticeably missing.  

The Weak Sector List continues to be led by Semiconductors, Energy, Computers, Media, and Banks.  

Students should continue to hold stocks in the strongest sectors and avoid those in the weak sectors.

Gold (GLD) rose 0.44 cents yesterday to 113.88, but the increase was NOT enough to generate a new Buy Signal on gold. The signals remains neutral.  However, the gold miners did generate a new Buy Signal as the momentum potion of the VTI-volume indicator turned positive.

My recent purchase of NUGT was up 0.77 cents to 13.49.  The pop caused the 2-period RSI on NUGT to become EXTREMELY overbought.  So, with NO Trend in place yet, the ETF could pullback today.  If this pullback happened, I will look to add a few more shares to my ‘trial’ holdings.  I’m still being cautious about my gold purchases now, mostly because the Materials Sector is still near the bottom of the Weak Sector List and the basic metal is still on a Neutral Signal.  IF GLD can move above its 50-day moving average, currently located at 114.03, I’ll become more aggressive with my gold purchases.

That’s what I’m doing,

h

BTW, even though the Dow rose another 159 points yesterday, the A-D oscillator remained negative for the 12^th consecutive day.  This negative divergence between price and breadth is getting CRAZY!!!  I looked back at the A-D oscillator readings that preceded the crashes of 2001 and 2007-2008.  None of the readings were anywhere close to the readings I’m seeing now.  Be careful!

Market Signals for

09-20-2018

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

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The Hockey Stick Pattern
The Creation of Waves and Trends
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