That’s what I just told an old school friend, who is also a fairly new fellow WiseTraders member!
Ok, so there was some context to my outburst …
My friend was going on about the markets being all over the place, and he was looking at different options strategies, etc.
I then asked him what was wrong with SLB last week, a stock I suggested was ideal for our style … pulling back and consolidating into its 50-dma with a persistent bullish OVI, in a bullish sector where other stocks had become overbought.
And even though he tunes in every week, he said he missed SLB.
So I told him “Ok, that’s enough … You’re banned! You’re banned from considering anything other than tight consolidations near Key Levels, where the OVI is corroborating. That’s all you’re allowed to look at from now!”
Now, all this was in good nature, but the lesson is important.
Stop OVERTHINKING!
If you stick with my principles, you’ll find this is a much easier, more enjoyable, more lucrative game … and then you can use smart sensible safe leverage with options at the opportune times.
So … nice consolidations near Key Levels, with a corroborating OVI, and using my trade plan.
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Once again, I had to record this review in the early hours. Family life with youngsters involves quite a lot of time where the big achievement is keeping kids out of harm’s way!
A snooze on the sofa after dinner, followed by the hour to emerge out of the post-snooze fog, then it’s time to do the recording!
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As per last week, the Ukraine tragedy meant another week of volatile behavior in the markets, and we still remain comfortably below the 200-dma on all the main indices.
Individual stocks and sectors that are bullish include Energy and metals, but again, please beware of overbought scenarios. It rarely pays to chase. It nearly always pays to be patient and wait for setups that are forming near Key Levels.
Another friend just wrote into me yesterday to say she had chased oil stocks and gotten burned as a result. It’s so unnecessary … especially as I have been warning against exactly that over the past couple of weeks!
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By the way, there are just a couple more National Hotel rooms remaining at the 50% discounted rate for our Miami Bootcamp, so if you want to be live in the room with us, please use the special booking link asap. If you don’t have that link, get in touch with Support Here. There are other hotels in the vicinity too, but we have secured great rates here.
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Current Market Behavior:
As with last week, my take is that the main indices are still bearish. We remain in a highly sensitive environment, where any improvement (from the West’s perspective) in Ukraine, could see a dramatic upward surge.
But otherwise, the markets still have plenty of room to the downside.
The longer term timing indicator, the OVI Sentiment Indicator (OVIsi) is still negative right now.
As I suggested last week, the overbought energy stocks did retrace and will likely rebuild high bases. The key is supply from other countries like Saudi and the USA.
My SPY Swing Timer is marginally negative but not oversold. With SPY’s OVI being negative I’m medium term bearish still.
Again I repeat, do not use the Market Timers as blind signals. There is a certain discretion to be deployed with these. When it comes to an SPY trade I want complete clarity, and I will produce a video soon for you.
Market Outlook:
This time last week I said energy stocks were looking somewhat overbought. That was another good call.
We’ll now look for them to flirt with their 50-dma’s, so just be patient and we’ll see how they look nearer that time.
Stock Selection:
A few nuggets today and plenty of learning examples.
Application:
As always I like to focus on consolidations forming near Key Levels, but I head to run a number of Fast Filters to find them this week. As per last week, while there are quite a few Implied Volatility Bullish Divergent stocks showing, I still think it’s a high risk play right now, and prefer to see some sort of basing action first.
Software Upgrades
Big strides on upgrades and some serious game-changers coming your way as I’ve been mentioning recently.
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Remember, you can play the video at 1.25x or 1.5x speed if you want to save time! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.
