After last week’s pullback, big institutions rushed in and gave the market the volume fuel it needed to snap back and indeed form the “V” pattern that so many bulls crave. Well, the V is all well and good, but does the market have what it takes to break all-time highs on the S&P 500 and continue? TVO, our volume oscillator, is now HUNGRY (not yet INSATIABLE) which means that in this season where “the more the merrier,” we’re entering a phase in the longer term where markets may have bitten off more than they can chew.
We’re still holding SPY calls on various time frames (that are all in the money), but as TVO continues to rise, we’ll likely be looking to lighten our load soon. But isn’t Santa just starting to load up his sleigh? There may be bumps along the way (Fed on Wednesday, perhaps?), but more low volume consolidation, rather than big spikes of accumulation, may be the bulls best chance for a Santa Claus rally to last into year end. -MD
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