A couple of decent days in the markets for the main indices, but on not-so-impressive volume, and the OVI is still negative on both the SPY and QQQ.
To trade “our kind” of patterns we need to see the patterns setting up nicely again together with narrower trading ranges. Currently some of the trading ranges (distances of consolidations) are so wide they make it awkward for us to implement our stops in a reasonably tight area.
SPY
In today’s SPY chart I’m including volume so you can see that it’s not overly impressive, given the scope of the move it’s made. My only comment right now is this index is not yet ready for us to trade.
QQQ
The QQQ scaled some impressive intraday heights yesterday before pulling back. Some of that may be on the back of the AAPL news, which had AAPL gapping down after hours.
AAPL
A continuing negative OVI perhaps suggests insiders were aware of the news about to be released yesterday. Any long trade on AAPL would now need to be accompanied by a wider market rally, and a stop that hugs the trendline. For now it’s a risky trade, but the future of AAPL seems reasonably stable.
GLD
Gold has taken a hammering with massive volume the last two days. The OVI has come hurtling down too. But look at the correlation of the positive OVI and the big run-up … it really is quite uncanny. And then look at how many opportunities you had to get into GLD along the way up. Forgive the pun, but the OVI is serious Gold Dust!
More tomorrow!
All the best
Guy