After Tuesday’s “Trump Jr shakeout”, markets gapped up on Wednesday and logged the first across-the-board accumulation day since 5/15 (which was back in May right before another famous shakeout… maybe we should officially give all of them names. you know, like hurricanes so we never forget). It seems that no matter how many shakeouts there are (followed by subsequent rallies), the bears always seem to forget that if you can’t beat ’em, join ’em. When it comes right down to it, though, there really isn’t anyone to beat because no matter what side you take, your biggest adversary will always be the one in the mirror.
The bulls do seem to have control at this point as Thursday’s follow through came in on sinking volume. But wait, isn’t a low volume rise a bearish warning, you know, like the kind that gets folks saying, “get out, it’s a trap”? Well, HG was CHILLY which means up/down volume is close to being at equilibrium, which means consolidation… which on low volume statistically has a bullish outcome (Next Day Move: SIDEWAYS/UP). We’re still holding our SPY calls from 7/7 (yes along with the smart money, we also bought at the 50 dma) and so far, if the rally continues on Friday, our gain is looking to be up over +40%. -MD
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