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TVO Market Barometer 8-27: Do we really buy up here?

Watching a trade go against you is never an easy pill to swallow. What stirs up your anxiety, however, often to the point of indigestion, is watching a trade go higher and higher… without you in it.

Such is the feeling surrounding the current run-up on SPY to 290 and beyond. Widespread denial of the breakout is also running high, yet the classic ingredients are there as far as volume is concerned… Heavy volume accumulation occurred on 8/21 (the “break-out” day), and again on Monday 8/27 (the “follow-thru”).

Does this mean that it’s really time to chase this thing into the stratosphere? TVO, our volume oscillator is still negative, but slowly turning positive, so big institutions do have their feet firmly in the door. The really big participation, though, may not fully kick in for another week or two.

In the meantime, the only cure for the missing out blues (other than not looking at the screen), is to stay tuned for the “shake-out”, coming this summer to a gap-filling theater near you. -MD

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

Volume: 17% – 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 III – Retail investors have bitten off way more than they can chew.

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

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

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