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How much higher can we go? – TVO MB 2-12

On Tuesday markets gave us not only the gap up, but also quite a bit of the go. The amount of “go” was about the same distance as the gap price-wise, but as far as volume, the Heat Gauge already hit 3-DOG NIGHT shortly after the open and it was clear by midday that accumulation was well in progress.

Technicians will argue that the 200 day MA was not “properly” broken to the upside in the session. Today’s overall volume, however, is more than enough to fuel a continued rise.

But it doesn’t have to happen right away. Big institutions are buying for the long haul and they can wait a lot longer than you for their investments to pan out. A little “back and fill” turbulence at the 200 day is no big deal for them, but for retail traders it seems like every step on either side of that line is a clear bear/bull declaration of the state of the market.

Does this mean SPY is going straight to 280? Not without a shake-out. It’s just a question of when. -MD

Sentiment: INSATIABLE – Big institutions are buying like there’s no tomorrow.

Volume: 13% – Today’s volume was higher than the previous session.

Real Feel: FRIGID – Bulls were in control of the session with a fair amount of selling under the surface.

Cycle: OVERBOUGHT I – Retail investors are confident and slightly overweight in their holdings.

Portfolio: HEDGE – The market is over saturated and long-term investments warrant some protection.

Next Day Move: SIDEWAYS DOWN - The probability that SPY will close positive in the next session is 53%.

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