Professor’s Comments September 25, 2019

Posted by OMS  at September 25th, 2019

The markets fell hard yesterday.  The decline was the Big Move predicted by Monday’s small change signal in the A-D oscillator. The Dow finished with a loss of 142 points, at 26,808. The technology laden NASDAQ was hit especially hard, dropping 119 points.  The SPX was down 25. Volume on the NYSE was moderate, coming in at 102 percent of its 10-day moving average. There were 112 new highs and 28 new lows.

Yesterday’s decline caused the market timing indicators for the Dow, NASDAQ, and SPX to turn Negative.  This increases the odds that the market indexes will begin a significant decline during the next few weeks.  The Dow also closed below key support at the 26,830 level which also increases the odds for a decline.  The market timing indicator for the Russell 2K remains on a Neutral Signal.

Given the change in timing signals and the current wave structure, it’s likely that Wave 2 up has completed, and Wave 3 down is now underway. If this is the case, Wave 3 down should drop the Dow down to the 3 September low near 26,000 which is the next major support level.  Once this level is tested, the next series of waves should see the Dow decline to near or below the 24,000 level to complete Major Wave ‘D’ Down.

The market remains in a very fragile condition.

The DMIs on the Dow and NASDAQ are Negative.

The Dean’s List and Tide remain Neutral.

The Sector Ratio fell to 12-12 Neutral after yesterday’s session.  A Neutral Ratio means that the number sectors moving up vs. those moving down is now even.  By moving from 19-5 positive to 12-12 Neutral, the Ratio is telling us that the market is beginning to change direction from up to down. The Strong Sector List was led by Service, Food Drugs, Healthcare, Semiconductors and Telecoms. The Weak Sectors were Real Estate, Leisure, Transportation, Computers and Autos

Gold (GLD) rose 0.76 to 144.51. The rise still appears to be associated with a wave ‘b’ within an a-b-c wave corrective structure.  The 2-period RSI on GLD had a reading of 96.1 with a CCI showing No Trend, so gold should begin to pullback. I still expect that once Wave ‘b’ completes; wave ‘c’ down will take GLD back down to the 137-138 level.

Bonds continued to rally yesterday on weak Money Flow indicators.  I’m still waiting for a change in signals before adding a few shares of TBT, the inverse ETF for Bonds, to the Model.

There were no changes to the Model after Monday’s session. The Model continues to hold a ‘trial’ position of 600 shares of SQQQ. The Model is currently up 27.5 percent with $107,169 in available cash.  Now that the Sector Ratio has turned Neutral, the Model will begin to look for opportunities to add to its shares of inverse index ETFs.

The Model Portfolio is being shown for educational purposed only.  The Buy/Sell actions in the Model Portfolio are made based on technical indicators that can and do change frequently and should NOT be considered as recommendations for trading an actual portfolio.  Any gain or loss in the Model Portfolio should not be used to predict future performance of the Model.

That’s what I’m doing,

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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.