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Shorts Covering Gives Short Term Bullish Bias

Another good take on these fast moving markets in my OVI Review from last week.  

The “breather” that I referred to happened not just “any time soon” but  immediately!  

The important thing is that we were prepared for it, and the vast majority of stocks highlighted for a bounce did indeed bounce, and many quite strongly.  

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By the way, 2023’s Miami Bootcamp is set for 22-23 April at the National Hotel.  I’ll have our group discount link for you soon, and if you’re interested, you should reserve your hotel room asap as I’m partnering with a large group of traders from Latin America … and they love travelling to Miami!  

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Current Market Behavior:

So, we’re in the “breather” zone where the markets are bouncing strongly off that “low wire” I talked about last week … for now.  

Remember last week I said: 

“First, in the Dashboard we can see simply too much red in the pies for trends, OVI, Key Levels, momentum, earnings, you name it … That alerts me that we are likely oversold for now … 

Either way, a pause of sorts is likely very soon, and could easily result in many stocks bouncing sharply as shorts cover.” 

The big moment will come when the larger entities get near their 50- and 200-day Key Levels.  There’s still room to the upside until then.  

The Dashboard is all over the place, which is simply a reflection of so many turnarounds over the last few days.  

Consolidations are mainly showing up as bear flags, but in these circumstances – particularly the oversold ones – could be the beginnings of a short term upward breakout.  

My Longer Term Market Timer, the OVIsi is still firmly in its red zone, which means that any bounce should be considered in a short-term context if the OVIsi stays red.  There is every chance that a short term bounce could end up being a bear trap.  But we won’t know if that’s the case for a while … at least until the larger entities get closer to their big Key Levels.  

In terms of our other Market Timers, the Medium Term Swing Timer is emerging from being oversold, while the Short Term Timer is blank. The OVI is pretty much neutral for the SPY which is hardly a vote of confidence given the steep bounce so far.

All indices remain below their Key Levels. 

Market Outlook:

I expect the respite to continue at least until the big Key Levels are tested, starting with the 50-day moving average.  

Stock Selection:

Last week I mentioned the glut of oversold bearish consolidations.  Remember, I don’t chase, and most of those consolidations will have evaporated or even bounced up.  Again, please read what I said … 

“There are a decent number of consolidations, but most are at oversold levels for a continuation to occur without the clear risk of a whipsaw.” 

Application:

As per last week I’ve focused on filters including consolidations, Railroad Tracks and short squeeze potentials, as well as Big Money Footprints and my static watch lists.

Software Upgrades

Same as last week.  

Many more important upgrades to follow in late summer / early fall. I am in active discussions with a broker for an API directly from our charts, and how we can get at least 15-minute delayed data (live if you have a broker account with them) as soon as possible.

Combined with our imminent News Feed and other charting goodies, we’ll get to a position where everything you could need is on our platform, while still focusing on what we’re best at.

Next year’s Miami is confirmed for April 22-23, and as mentioned above, due to a partnership with a Latin American based outfit, the live tickets will be snapped up quickly, so we will give first dibs to our regulars! 

This year’s Stocks Summit is confirmed for 3rd December at the London Courtyart Marriott Heathrow, as per last year. More details will follow shortly.

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.

PS. If you’re interested in any of our OVI trading services for stocks or options such as a fast-track mentorship or workshop event, book yourself an appointment here to speak with us. Many of our members aren’t aware of all the services we offer to help you become a more ‘informed’ and confident trader with the OVI. Remember, everyone is an individual, and we ensure that we can cater to you and your particular needs.

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