TVO Market Barometer 1/13/16

TVO MB 1-13-16

Overall volume kicked up +10% on Wednesday as capitulation-like selling took hold for most of the day. The needle on our Heat Gauge got pushed to about as hot as it can go. Is today’s drop just a result of Monday and Tuesday’s failed dead cat bounce (albeit a small one), or are we staring into the jaws of the start of a new rally to take us back to the 200 DMA (or at least the H&S neckline at SPY 198)? In any case, market bottoms are usually complex and take time to develop. TVO and HG are not known to wait around too long, so at tomorrow’s open we’ll be buying SPY calls for a short-term swing. How does TVO handle downturns? Often the best defense is a good offense… so let’s get going. -MD

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