When the market “Fear Gauge” the VIX makes a move, it’s usually a jump higher that makes the news, but on Monday records were made by a falling VIX… seemingly indicating that investors are now in “relief” over the French election. Well, with North Korea and a government shutdown looming, it’s hard to see how real relief can be very close at hand. And being a stone’s throw from Nasdaq 6000 (which hardly anyone seems to be talking about) has become one more thing to worry about, as the magic number is beckoning the top callers out of the woodwork once again.
As far as volume, TVO has just reversed direction towards positive values (when it gets higher than +3.0 then we can start talking about calling a top), so we’re on watch for our General Investment Strategy (GI) to shift to “buy” mode soon. IO is heading into overbought territory in the short-term, so the road to SPY 240 may be a bit bumpy and not a straight path like some think.
In the meantime, our “Heat Gauge” (based purely on volume and no direct relation to the VIX in function or sentiment) signaled an exit for our members on Monday from last week’s short-term swing trade. The “calculated risk” outside of our GI resulted in a +36% gain on our call options, lifting our overall account return to +15% so far this year. -MD
To view past positions check out our Trade History.
To find out what the indicators mean, here's our TVO System Dashboard Terms Explained.Login. Not a Member? Join us.