TVO Market Barometer 6/29/15

TVO MB 6-29-15b

The Heat Gauge at +94 is about as high as it goes (in 15 years of data its never gone above +98), but our long signal is not valid without a significant amount of overall volume, so at a decrease of -22% we sit on our hands for the time being. Volume needs to be completely exhausted, otherwise the bounce we’ll likely end up getting won’t have enough spring for our short-term swing to realize sizable gains. So depending how the dead cat behaves over the next few days, there could be another leg lower… How much lower? Well, if patterns are your thing, the SPY head and shoulders has broken the neckline and is approaching it’s target, which is around 202. If you follow volume or this blog, you might realize by now that patterns can deceptively fail and support levels that are supposed to hold “or else” can often break down… so all in all the numbers only really matter if you’re ready and waiting (sort of like a cat) to catch that inevitable next move. -MD

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