Professor’s Comments September 22, 2017
Posted by OMS at September 22nd, 2017
The markets were down yesterday. The Dow was off 56 points at 22,359. The NASDAQ and SPX were down 33 and 8 points, respectively. Volume on the NYSE was moderate, coming in at 100 percent of its 10-day average. There were 133 new highs and 12 new lows.
Yesterday’s decline on the NASDAQ (QQQ) caused my VTI-volume indicator to generate a Sell Signal on the Q’s. So now both the DMI and the VTI-volume indicator are on Sell Signals.
As I’ve mentioned before, the NASDAQ and SPX are NOT in the same pattern as the Dow. They have already completed the five waves necessary for a Wave 5 up. The current pattern appears to be morphing into a rounding top. If this is the case, prices should start to stair-step lower during the next few weeks. I would be extremely careful with any high-priced technology stocks now.
For example, all three PT indicators on a technology stock like Apple (AAPL) are negative. AAPL has shed 12 points since the beginning of September, even though the Dow has risen over 400 points. The stock is now trading below its 50-day moving average with a negative VTI-volume indicator. The next target for AAPL appears to be near the 200-day moving average currently near 143+.
Right now, the cockpit indicators are still mostly positive, except for the DMI on the NASDAQ (QQQ). So, it’s still early in the turning process. The thing to watch for the next few days is The Tide. Market breadth usually provides a timely signal for trading tops, and The Tide is the best breadth indicator I know. I would be EXTREMELY careful about trying to call a top as long as this indicator is positive.
Like I said yesterday, once The Tide starts turning negative, that’s when I’ll start becoming aggressive on the short side. We’re not there yet.
There were no changes to Thursday’s Sector Report. The Sector Ratio remained at 15-9 positive. The Strong Sector List continues to be led by the Semis, Energy, Material, PharmaBio, and Computers. The Weak Sectors are led by Consumer Products, Telecoms, Media, Household Goods, and Service.
Gold continued to fall yesterday. GLD finished down 0.94 cents to 122.68. I’m still on a Sell Signal for GLD as my VTI-volume indicator remains negative. Yesterday GLD broke through its 50-day moving average and appears to be headed for the 200 near 120. GLD MUST hold the 120 level on this move down, otherwise the wave structure suggests its headed for 105 or below.
Remember, now that the Fed has announced its new ‘balance sheet normalization program’, it will likely be a positive for the Dollar and a negative for gold. With negative indicators, I am avoiding the metal for now.
That’s what I’m doing,
h
Market Signals for
09-22-2017
DMI (DIA) | POS |
DMI (QQQ) | NEG |
COACH (DIA) | POS |
COACH (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
SUM IND | POS |
VTI | POS |
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