TVO Market Barometer 7/24/15

TVO MB 7-24-15b

For the past week the market has been logging days of distribution (the HG has been in the red since 7/17), but the ball has been passed around a bit among the indices. Last Friday, however, the forces that be have started to see eye to eye, and the resulting selloff kicked our Heat Gauge up to a rather warm +72 putting us firmly into buy territory for a short-term swing (about a one week time frame). Call options are the preferred vehicle for this trade, but rather than use stops we limit our risk (total cost of options) to no more than 10% of our total capital. We also rely on an exit signal rather than a target price to get us out of the trade. Market on open (MOO) orders have the best track record over a (15 year testing period), so see you at the opening bell. -MD

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