As I’ve said in the past few months, it’s the Nasdaq OVI that is proving to be the most insightful, and therefore the index that I’m paying most attention to.
But imagine for one moment if the readings you’re currently seeing on the OVI, were in fact published 12 hours before? Speed is of the essence in trading, and combined with “hidden” information, it’s what gives us a serious edge.
Well, this is something we’re working on … it’s not an easy task by any means, but I’ve discovered it’s possible to speed things up a bit and I’m committed to doing it. As good as the OVI is, and for me it is an awesome indicator when you understand how to use it alongside chart patterns, just imagine if we could see it 12+ hours earlier.
Back to the QQQQs, the OVI was already negative from near the end of July, and then slammed down hard on Wednesday. The warning signs were there and without wanting to sound like the prophet of doom I’ve been saying for some time that a move to the downside is more likely. So that was the easy part. Was there an easy way to trade the QQQQs down this time?
Well, in this case I’d say not. There wasn’t an obvious pattern forming to go short apart from the double top forming just under $48, however, knowing that any bullish move was potentially risky because the OVI was signalling it, is a huge advantage that only you have. Again, that’s a serious edge in the markets. Furthermore, with the QQQQs representing the Nasdaq, all you’d have to do is note that symbols with 4 letters are Nasdaq stocks that will be contributing to the Nasdaq Index, and therefore the QQQQ. So, in your filters you can pay close attention to those stocks if the QQQQ OVI is shouting something loud and clear.
Earnings season is all but finished now. My bet is that by the next one we’ll be seeing spike in volatility.
Guy
To learn more and have access to the OVI visit my Private Traders Club area.
