I know I don’t email and blog that much, and that’s because I only want to contact you when there’s something important to say.
If you read my email from 26 April you would have prepared yourself for the volatility that came the very next day.
Now, we can’t always be right about these things, but if you follow my methods, observations and disciplines you too can start to cultivate that “intangible” market intuition that I’ve managed to acquire over the years.
If you didn’t read my email or blog from 26 April, please take a look at it now so you can see exactly why I was concerned. Here’s the link:
By they way, the VIX (the CBOE Market Volatility Index) spiked up hugely the very next day (on the 27th April), as a reflection of the down move in the markets.
As you’d expect by now, the OVI has turned negative on many issues, though the Dow is still just about holding out.
Here’s the S&P:
GS and the financial sector had a bounce yesterday but as I mentioned last time, wider economic concerns haven’t gone away. The Euro-Zone is pretty vulnerable right now and while that might push FX traders toward the Dollar, it’s not good news for such a large trading block (ie Europe) to have so many weak links.
So, I repeat, long positions should be carefully managed with tight stops. This year-long bull market is having a test right now and we’ll just have to sit tight and see how it plays out. The clues will reveal themselves as new tradeable patterns (flags and breakouts) emerge.
If you don’t have the OVI, you’re beginning to see how powerful it can be to your overall trading. For more information about it go to http://ptc.flagtrader.com where I can help tutor you on a regular basis.
All the best
Guy
Get the OVI charts for all optionable stocks, plus coaching and much more at: http://ptc.flagtrader.com