Hi Everyone
Over the last few days I’ve had some personal correspondence with some of you and I just did a webinar last night where we discussed the OVI in some more detail.
Just to update you, we’re just implementing the automatic data feed to the OVI and we’ll then be ready to deploy.
Here’s what’s been going on in the meantime:
Last week the OVI turned down sharply and drifted into negative territory while the market was drifting sideways.
This was a clear signal.
This typically means the buyers are out of town and that a break to the downside is likely.
It’s a way by which the OVI can be used to evaluated Reversal breakout trades.
In this market, I’d still urge you to be conservative with your first profit target, but let’s see how you can trade with it.
See the chart below with the numbers on it.
- Steep retracement in mid August is prewarned as the OVI peak was lower tahn the two in July/August, and was turning down even as the S&P was trying to drift higher.A steep retracement follows at the end of August, which results in a very quick about-turn in the OVI, and a nice breakout from the previous highs in late August
- Extended bull flag doomed to failure. The OVI was going into negative territory and there was no encouragement to the upside until early October.
- Same again in mid October where the OVI turned sharply down again before the markets followed suit on Monday.
Hope this helps.
More to follow soon – thanks for your patience!
All the best
Guy