Professor’s Comments September 6, 2018

Posted by OMS  at September 6th, 2018

The markets were mixed yesterday with technology stocks getting hit the hardest.  The Dow finished up 23 points, at 25,975. The NASDAQ and SPX lost 96 and 8 points, respectively.  Volume on the NYSE was heavy, coming in at 113 percent of its 10-day moving average.  There were 88 new highs and 94 new lows.

The important thing to note about yesterday’s trading was that the number of new lows is now starting to exceed the new highs.  This is not a good sign for the market going forward. If this continues, it could lead to a significant correction during the next few weeks.  The BLS will be releasing the August Jobs Report numbers at 8:30 tomorrow morning.  If the market doesn’t like the numbers in the report, it could trigger the sell off.

Right now, the market is in a very vulnerable position.  The patterns on the Dow, NASDAQ and SPX suggest that Wave 3 up has either ended or is nearing completion.  This is also occurring at a time when the European markets, emerging markets, and now Canada are in decline.  Yesterday I mentioned that Canada joined most of the European markets on long term Weekly Sell Signals from the VTI-volume indicator.  Students should understand that not only are Europe and the Emerging Markets on a long term Sell Signal, but their indicators are trending down.  It will be extremely difficult for the U.S. markets to continue higher in this environment.

Students should continue to watch the 2,850 level on the SPX.. A break of 2,850 would project significantly lower prices for the SPX, possibly down to the 2,580 level.

Yesterday’s decline in technology caused the VTI-volume indicator on the NASDAQ to move to a Neutral Signal.  The same indicator on the Dow remains positive and trending.  The signal for Crude Oil remains Positive, with Bonds, Gold, and the Dollar on Neutral signals.  These signals could all change after tomorrow’s Jobs Report.

The Sector Ratio increased to 21-3 positive after yesterday’s session.  However, the Ratio is somewhat misleading because the Relative Strength of most sectors on the Strong List is extremely low, mostly 1s and zeros.  Once you get past the top 5 sectors, the RS values drop off quickly.  It won’t take much to turn the Strong List negative.

The Strong Sector List continues to be led by Household Products, PharmaBio, FoodDrugs, Telecoms, Transportation, and Cap Goods.  The major change I noted yesterday was that the Materials Sector, which includes gold, moved back to the Strong List.  BTW, I also noted the UUP the ETF for the Dollar dropped off the Dean’s List, and was replaced by UDN, the inverse ETF for the Dollar. These are positive developments for gold.

The Weak List was led by Media, Computers and Healthcare.  

Gold rose slightly yesterday, but most mining stocks finished down.  GLD rose 0.39 cents to 113.32.  I’m still watching the small Hockey Stick Pattern on GLD that has developed since its 16 August low.  The ‘Blade’ of this pattern could provide the springboard for the next rally leg in gold.  With the Materials Sector back on the Strong Sector List, all I need now is a buy Signal from the VTI-volume indicator.  If this happens, I’ll load the truck.

Students should remember that during the 2007-2008 market crash, gold was a nice place to be.  So with Europe and the Emerging markets showing signs of trouble, (the Weekly Sell signals on these markets from the VTI-volume indicators are MAJOR signs of trouble), I’m looking to add to my ‘trial’ positions in gold and mining shares.  These have the potential to be long term positions, as the pattern on gold suggests that Wave 3 up could be close to starting.

That’s what I’m doing,

h 

Market Signals for

09-06-2018

Professors Major Market

Timing Signals for

09-06-2018

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

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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