Last Friday’s mix of quadruple witching and SPY ex-dividend seemed like a recipe for a sell-off if there ever was one. Instead, however, the S&P mustered up all its might and managed to close above 2500 for the first time. But the bulls must have certainly had plenty of volume behind the move, right? Well, +51% overall volume increase is quite impressive (even for op-ex), but while the Nasdaq did come in on the accumulation side, the big board fell a bit short due to lack of advancing volume.
We did take advantage of the 2500 euphoria, though, and sold our SPY calls from July for a +22% gain, bringing our overall account YTD return to +15%. TVO has now reversed back to EAGER which means that the long-awaited pullback may finally be in motion (IO has already been OVERBOUGHT since August). The bulls would need to get a serious bout of across-the-board accumulation to keep this afloat in the near term and sustain their current “market only goes up” argument. Until then, the big institutions are just not buying it. -MD
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