Professor’s Comments September 26, 2014

Posted by OMS  at September 26th, 2014

The Dow plunged 264 points, closing at 19,946.  Volume was moderate on the decline, coming in at 98 percent of its 10 day average. New lows swamped the number of new highs 194 to 18.

The Dean’s List has turned negative.  So now, all of my key indicators are negative, with the Tide still going out.

Yesterday’s decline was broad based.  Nothing was spared.

It was the type of day that I remember from back in 2007, when market was starting to crash.

If the market is crashing now, there could be a small pause for a day or two, before the next major down wave begins.

With the Dean’s List having turned negative, I am now looking to add to my inverse ETFs on any small rally.

A decline below 1950 on the SPX would suggest that the market topped on 19 September, and the final legs of the Ending Diagonal Pattern have been completed.

At this point, with everything negative, the odds are overwhelmingly in favor of additional declines.  However, IF the SPX does rally back above the 2000 level, it would raise the possibility that the market could need one more leg higher before the Ending Diagonal Pattern completes.  I don’t see this as a real possibility now, but you never know.  I’ve seen stranger things happen. 

I’m still holding my shares of TWM, DUG and VXX.  I am now looking to looking to add to these positions and /or buy additional inverse ETFs from the Dean’s List.

That’s what I’m doing,

h

BTW, thanks to Laurie at AIQ Systems, I now have a full internet capability on board Silhouette.  Because of this, I will now be able to update all of my Lists every night.  However, I still plan to limit my Comments to two per week plus the Weekend Strategy Review.  Marcia keeps reminding me that I’m supposed to be on vacation :>)

Not sure of the terminology we use? Check out these articles

The Hockey Stick Pattern
The Creation of Waves and Trends
FAQ

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