Weekend Strategy Review November 27, 2022
Posted by OMS at November 27th, 2022
Stocks were mixed yesterday, on light volume. The Dow rallied above its 16 August high satisfying the minimum requirements for an a-b-c flat pattern. The large cap index finished with a gain of 153 points at 34,347. The NASDAQ and S&P were down 57 and one point, respectively. Volume on the NYSE came in at 3.9 billion shares which was the lightest since December 2019. There were 63 new highs and 30 new lows.
There were no changes to the patterns or indicators after yesterday’s session. It still appears that the Dow is nearing completion of an a-b-c flat pattern for its Wave 2. The NASDAQ, S&P and RUT may have completed 3-3-5 Double Zig-Zag Patterns for their Wave 2s. All of three of these major indexes are still below their 15 November highs, which creates an intermarket divergence with the 30 stocks on the Dow. Once these patterns complete, the next set of down waves should begin. The sell off should be a dramatic Wave 3 down.
The Market Timing Indicators for the Dow remain positive. The same timing indicators on the NASDAQ are also positive. I need to see these indicators turn negative before I start shorting.
The Dean’s List and The Tide remain positive.
The Sector Ratio stayed at 0-24 positive after yesterday’s session. The top five strong sectors were CapGoods (8), Real Estate (5), PharmaBio (5), Material (5), and Semiconductors (5). There were no weak sectors.
My Trades: With a positive early Bias on both the DIA and IWM, I took trades in both UDOW and TZA. Each was good for about 60 cents. After that I closed shop and started watching some of the World Cup soccer. I wasn’t a big fan of soccer before these matches began, and from what I’ve seen during the past week, the lack of action and scoring will probably keep me from watching more. The once thing I did notice is that you have to be an actor to play the game. Seems like every time two players come together chasing the ball, one takes a dive and pretends to be injured. The real pain is in watching these dreadful performances.
With China shutting down due to Covid, and Amazon starting a world wide strike, I bought a few Puts on Best Buy (BBY) just before the close. I used the 17 February 2023 contract with a 75 strike price.
I’m off to Germany today for the Christmas Markets. With the positive Thanksgiving Holiday bias just about over, next week should be telling. I believe the indexes are very close to topping and are within days of starting a major down trend. Be patient and let the Bias on the Daily bars tell you when the top is in.
Remember: Always check the Bias on BOTH the short-term AND longer term (Daily) bars before you place a trade. That way you will know if the trade is with or against the major trend. Then once you know the trend, just trade the Arrows. Enter on a Green and exit on a Red. If the Trend Indicator moves above the 50 level, I add shares to my initial position. The Trend Indicator is a very important money management tool. It’s faster than the Bias and helps identify the start of a trend.
Have a great weekend.
That’s what I’m doing,
h
Market Signals for
11-28-2022
DMI (DIA) | POS |
DMI (QQQ) | POS |
A/D OSC | |
DEANs LIST | POS |
THE TIDE | POS |
Index | Signal | Signal Date |
---|---|---|
DOW | POS | 04 Nov 2022 |
NASDAQ | POS | 22 Nov 2022 |
GOLD | POS | 22 Nov 2022 |
U.S. DOLLAR | NEG | 14 Nov 2022 |
BONDS | POS | 16 Nov 2022 |
CRUDE OIL | NEG | 23 Nov 2022 |
CRYPTO | NEG | 10 Nov 2022 |
DISCLAIMER
As always, the Professor never makes recommendations. The information is provided on an educational basis so you can have informed discussions with your financial advisors and/or accountants about your individual investment decisions.
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.
Category: Professor's Comments, Weekend Strategy Review