When Things Are Hot, Get In The Market – Enter TVO HG

SPY TVO HG 5-6-15

When I developed TVO, there was a suspicion that the time frame might turn out to be a bit too slow for some of the more active traders out there. So… Enter the Total Volume Oscillator Heat Gauge (TVO HG). I’ve been in the woodshed so to speak working on this for some time and the results, which are nothing short of incredible, will be posted soon. For now here are 3 options trades showing how the Heat Gauge (using only volume data) called the major swings over the past 2 months.

1. On 3/10 things are heating up and the HG was at +82 (pretty hot for March), so on 3/11 we buy SPY 206 calls at the open for 2.47. By 3/18 things have cooled down a bit (-7 on the HG) and we sell our calls at the close for 5.59 (126% profit).

2. 3/25 we’re back up to our unseasonable warmth at +74. On the next day once again TVO HG catches the very bottom of the swing (with only volume data from the night before), and we buy SPY 205 calls at 3.63. On 4/2 HG is -3 and we sell at 4.28 for a 17% gain.

3. The day of 4/17 (when talk of Armageddon was near) is a pretty warm one at +77. On 4/20 we buy SPY 210 calls and sell near the top of the swing a few days later for a 6% gain.

Things are heating up again today (as you may have guessed) to +77. Where do we go from here? Stay tuned… -MD

For more on market volume, The TVO System, or how to trade options follow me on Twitter (@TradingLicks) and StockTwits!


Performance results on this website dated prior to September 2014 for TVO (prior to May 2015 for HG), including backtesting and trade history, are simulated. Please read our full disclaimer.

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