Strong OVI stocks are still behaving robustly, while mediocre to weaker OVI stocks are stalling before a potential second leg down.
Many of those weaker stocks have already retraced down to their 50-day moving averages, and this is a “pie” that we’ll soon add to the OVI Dashboard counts, that will provide important information for us.
Generally I would categorize this market as a sort of “No Man’s Land”. There are opportunities in both directions, but it’s clearly not a “Triple A” market.
What that means is that you should be scaling down in terms of the number of trades you make and the how much you put at risk per trade. If you want to sit it out that’s fine too. Many of our top OVI traders only trade in optimal market conditions and will go weeks without even making a trade.
I like that approach because it shows real confidence in the method. In the right market conditions you can rack up profits very quickly without undue risk. I personally tripled my invested capital this summer without going crazy with the number of trades made, and I took very modest risk.
It’s always interesting to review what we talked about the previous week, and once again last week’s words look interesting when viewed a week later.
- I mentioned that aside from tech and SAAS stocks, those stocks exhibiting the “Four Big Money Keys” had held up pretty robustly. That still applies this week.
- I mentioned oil stocks looking weak with probably further downside to follow … and that’s exactly what has happened.
So again, as per last week’s closing comment … follow the plan, stick to the rules, and TWYS!