Not for the first time the OVI Sentiment Indicator has enabled us to avert the worst effects of a nasty market move and keep us safe. As I mentioned the other day, for months I’ve been advocating caution, and for weeks the OVIsi has been red.
Of course there have been decent bullish (and excellent bearish) setups along the way, but there are key safety measures I’ve repeated many times:
1. Play with fewer chips (or even no chips) during challenging market conditions
2. Use my dynamic trailing stops to protect what you have
3. Pay attention to my market commentaries and OVIsi
These two measures alone would have you safe from the bloodbath of last week. My commentaries and the OVIsi would have you on your toes too.
So, while this past week was nasty for many investors, by following my methods you should be pretty much unscathed.
What’s next?
Well, the main surprise about this move was the timing, that being during the summer holiday season. Clearly the market is vulnerable and nervous, and there are likely to be after-shocks for a while.
During this time, take the time to master my simple methods because at the very least they will keep you safe. And soon enough the great setups will reveal themselves in the context of a more technical market.
