Investopedia defines a breakout as a “price that moves outside a defined support or resistance level with increased volume,” which is what happened today… except for the volume part. As SPY convincingly broke through the 195 barrier, overall volume took a plunge of -10%.
Another way you could look at it (from a bulls perspective that is) is that this has been building up from before and after we first tested the level back on 2/22. Problem with that reasoning is, volume was light then and most of the days in between. You could be of the camp that always says don’t worry, volume will come… which will likely turn out to be true eventually, but being the leading indicator that it is, the bulls need it now and tides will start to turn if there’s not enough to fuel the vessel.
Despite all that, due to our own diligent analysis of volume, our members were able to participate in a sizable gain today from our options swing trade entry on Wednesday (more details coming up in the weekly blog). Although volume pulledThe indicator descriptions in the above graphic represent general market sentiment and are not the actual TVO System signals. To view today's active signals and options trades, please Login. Not a Member? Join us.