I’ve mentioned several times recently about the importance of protecting your gains, and this has been particularly important as the market wobbles in the run up to this earnings season.
I don’t pay much attention to what’s happening in the news, I can see what I need to see in the OVI charts. So, while I’m aware of the Portugal banking crisis, I was suggesting that you protect your gains well before that particular news event arose.
At the same time I was also saying the OVI is behaving resiliently for now. This seems to have been borne out by yesterday’s action where the market gapped down at the open in the light of the Portugal news, but came back pretty strongly by the end of the day.
Remember, all I look at is the chart and the OVI, nothing else. This is what gives me the ability to make good calls over and over again. With time, looking at the charts the same way I do, many traders pick up on this intuition.
Apart from the fact that we’re so often on top of things, it’s a wonderfully simple way of interpreting the market because we really only have two things to consider. This enables us to avoid confusion or analysis paralysis.
Right now, we’re just about into earnings season which is a naturally cautious time in any case.
So again, the advice for now is slight caution at this time.