TVO Market Barometer 2-12: Have we gotten to the bottom of it all?

Markets surged on Monday as the bulls made a valiant move to reclaim some of last week’s drop. There’s still quite a bit of ground before the 50 day MA (and to the level that some would call a “return to normal”), and right now volume, and institutional support, is not on the bull’s side.

Overall volume dropped almost -30%, and our Heat Gauge is at a level where the Next Day Move is likely SIDEWAYS DOWN. But yet, there are certain Wall Street experts out there saying this sure looks like a bottom. Nothing against those folks, but when many eyes think they see something with that much confidence, well, that is often a clear warning that the opposite is more likely to be true.

There are opinions and then there are statistics.

Out of the last 7 market corrections (of -10% or more), TVO correctly identified the bottom in 6 of them. In most of those cases, the signal was early, but we still managed to capture most of the ride back to all-time highs. Where is TVO now? At -4.2 and sinking, the oscillator still has room to decline before making some kind of reversal, so we still have a bit more time before TVO makes the call on this one. -MD

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