My Trading Licks

On Wednesday, markets were closed as our nation honored an American President. But in the financial realm, the “tariff man” was still front and center, as the latest round of fear mongering seems to have markets firmly at bay. Currently, overnight futures have seen better days… but has anything really changed? What’s going on?

Back in October, my friend “RK” (whose well-known fund is still sailing strong while other hedge fund boats have long been taken in by the storm) said to me that, despite the sharp decline, “there’s just no real fear in the market.”

And that’s exactly the problem.

As the S&P 500 bounces up and down like a mad man on a trampoline, that real fear, like the kind that ushered in past bear markets in ’87 and ’08, is suspiciously absent. For most folks, it’s clearly no longer looking like a bull market, but with last week’s shot right back to previous highs, it’s not quite looking like a bear one either.

There are many reasons for fear on Wall Street, but perhaps one of the big ones is navigating a market without a clear trend. As a trader, whether you’re a bear or bull, without a trend, you have no friend.

The “real fear”, though, that will eventually bring on the next bear market will come not from Wall Street, but from Main Street. When everyone BUT the traders start to panic (like my concerned family members who thought I was crazy when I bought my house in ’08), then we’ll know something scary is going on.

TVO, our long-term volume oscillator, now at LIMBO is clearly reflecting the “no fear” hypothesis. We are currently, however, making our way back to positive values, so volume is still favoring an overall market uptrend at this point. Whether the market will listen and “stay the course”, well, we’ll just have to wait and see. -MD

Sentiment: LIMBO – Markets are neutral and sentiment can go either way from here.

Volume: 4% – Today’s volume was higher than the previous session.

Real Feel: SCALDING – Bears dominated the session and buying was practically non-existent.

Cycle: OVERBOUGHT I – Retail investors are confident and slightly overweight 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 56%.

Want to read more? Join our list. It's free.

For the full rundown on today's active signals and options trades, please log in. Not a Member? Join us today.

To view past positions check out our Trade History.

To find out what the indicators mean, visit our Market Volume Volume Barometer.

To learn more about market volume and how we trade, find us on Twitter (@TradingLicks) and StockTwits!

The indicator descriptions in the above graphic represent general market sentiment. The actual TVO System signals and trades are listed below in the Members Area. To view, please Login. Not a Member? Join us.