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When volume spikes, you better listen – TVO MB 2-05

Tuesday was another CHILLY day on the Heat Gauge, but this time overall volume got a bit of a boost.

It’s easy to see exactly when it happened by looking at the huge spikes on the intraday HG chart. These spikes have been showing up in the last two sessions and they generally represent extremely high volume sell orders.

Similar patterns occurred on 12/11 and 12/18, which sparked the final leg down of the great bear market of December ’18.

Now, before some of you “prior lows must be tested” bears start foaming at the mouth, the spikes also reared their ugly head on 12/31 which was right before what turned out to be an extremely buyable pullback. Whether you call them short covering, institutional dumps, dark pools or whatever, they are something to look out for.

As far as the outcome, you can be the judge. I am just the messenger… who also just happens to be in cash at the moment. -MD

Sentiment: INSATIABLE – Big institutions are buying like there’s no tomorrow.

Volume: 8% – Today’s volume was higher than the previous session.

Real Feel: CHILLY – Bulls were in control of the session with substantial selling under the surface.

Cycle: OVERBOUGHT III – Retail investors have bitten off way more than they can chew.

Portfolio: HEDGE – The market is over saturated and long-term investments warrant some protection.

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

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