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TVO Market Barometer 9-6: Wait for it.

Knowing when to buy is arguably the most important and elusive trait of any successful trader. Equally important (if not more so) is the ability to know when to sit things out.

Since a week ago last Wednesday, our Heat Gauge helped us do just that. While many bulls were convinced that every day since then was THE dip to be bought, Next Day Move (NDM) said either SIDEWAYS or SIDEWAYS DOWN, and effectively kept us in cash as SPY went south, slowly filling the 288 gap and then some.

Waiting or “sitting on hands” can be quite a challenge, especially when most of the crowd at large seems to doing otherwise. It’s times like these, however, when you can appreciate the benefits of having a proven system, and realizing that you don’t need to guess or rely on your gut (basically your autonomic nervous system) to tell you which way the market is headed.

So how exactly do we know if it’s really a reversal and not just another so-called reversal candle? Well, we just wait for NDM to say “UP.” And this method, which is based purely on volume data and probability, has shown to be at least 61% effective over the past 15 years (67% in the past 2 years).

This may seem to pale in comparison to the success rates of some others out there, but when it comes right down to it, a slow and steady rate of return is far less prone to burnout over time. So as the latest crypto and penny stock gurus start losing their mojo, TVO will ultimately outlast all of them for years to come.

Thursday was SWELTERING, but still not quite the right temperature to go long. The jobs report starts off the session on Friday, but try not to let your autonomic nervous system get the best of you. Your gut may come in handy in in other life situations (stress, relationships, survival, etc.), but in the mechanical world of trading, it can only take you so far. -MD

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

Volume: -6% – Today’s volume was lower than the previous session.

Real Feel: SWELTERING – Bears were in control of the session with a slight trace of buying under the surface.

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

Portfolio: BUY – The market is healthy and it’s a good time to contribute to long-term investments.

Next Day Move: SIDEWAYS DOWN - The probability that SPY will close positive in the next session is 52%.

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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 . Not a Member? Join us.