TVO Knows The Right Place And Right Time To Be In The Market Pt 2
In the first quarter of 2017, to the dismay of many folks out there, the MAGA rally continued onward and upward. With all the shakeouts and fakeouts the market had in store, it wasn’t an easy ride, but the TVO System came out ahead, growing our total account capital +12%. How did we manage to gain so much in just 3 months (5 trades)? By tuning out the noise and being in the right place at just the right time.
Here’s Part 2 of all the signals and setups from TVO, our “Total Volume” Oscillator system that we used (are still using) to trade the MAGA rally (Part 1 focused on Q4 of 2016). Details of each trade can be found in our Trade History.
1. On 12/28 after bouncing around in a 3 point range, SPY suddenly broke to the downside. Talk of another January dive (like Jan ’16 when SPY dropped 20+ points to kick off the year) flooded the stream. HG, our Heat Gauge, fortunately is only tuned into volume, so we went long on 12/29. The market dropped further the next day, but before the “told ya so” bears even had a chance to get their doomsday tweets together, things shot right back up in the new year. A few days later on 1/6 we sold our SPY calls at the top of the swing for a +23% gain.
2. SPY once again resumed a tight trading range. Meanwhile TVO, our volume oscillator, reversed direction towards positive values. We knew that TVO knew something was brewing, so on 1/10 we went long again SPY calls. Sure enough, after a quick breakout fakeout, the market then decisively broke the range to the upside like a rocket. Breakout traders scrambled to get back in, many missing a big part of the move, but since we were already in the breakout before the breakout, our members were able to sit back, relax and enjoy the ride.
3. During the month of February all the pundits and top callers were out in full force. All the while TVO stayed close to LIMBO, telling us the market had more room to run. Just as SPY was making a triumphant leap to 240, volume told us that enough is enough, so we sold our SPY calls on 3/3 for a +114% gain… right in the nick of time before the ride back down.
4. The bulls finally got the pullback they wanted and IO, our Issues Oscillator, agreed that it was once again time to go long. We bought SPY calls on 3/8, but soon after a brief bounce the market ran out steam and we exited on 3/20 for a -7% loss… which once again was just in the nick of time, avoiding a 3 point drop in SPY the very next day.
5. As we know by now, a good drop is often a good buying opportunity (according to HG), so we bought the dip on 3/22 and added more calls on 3/24. And just when you think that buying the dip is easy, the stop hunters show up (this time to neatly fill the gap just below SPY 232) and shake you out of the trade. The TVO System does not use stops (never has and never will) so we stayed in the trade, selling our calls on 3/29 for a +16% gain.
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To view past positions check out our Trade History.
To find out what the indicators mean, visit our Market Volume Volume Barometer.