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TVO Market Barometer 10-23: Is the bottom finally in?

Markets opened down sharply on Tuesday, and while some folks are saying the worst is yet to come, the S&P 500 still remains positive for the year. Is this the beginning of a new bear market or just another buy-able dip in this age-old bull? Well, that’s for you to decide.

We mentioned in last week’s post that a sudden flush after a gap down could fuel a new rally. The bulls did get the flush and the long green candle (with plenty of volume) that they were hoping for. What they didn’t get, though, was anything close to accumulation. In fact, on the big board, Tuesday’s pop logged more in the way of volume distribution, with the Nasdaq not too far behind.

A run-up from here is certainly a possibility, however, with our oscillators TVO and IO now both heading lower into the negative, any follow through will likely be short-lived. If that’s the case, a good ol’ “W” bottom on SPY and the Dow would likely be the next best case bullish scenario. -MD

Sentiment: ANXIOUS – Markets are in a distribution phase where big institutions are selling to reduce their exposure.

Volume: 25% – Today’s volume was higher than the previous session.

Real Feel: TORRID – Bears were in control of the session with moderate buying under the surface.

Cycle: OVERSOLD I – Retail investors are uncertain and very light in their holdings.

Portfolio: HOLD – The market is in a period of indecisiveness and the best place is on the sidelines.

Next Day Move: UP - The probability that SPY will close positive in the next session is 59%.

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