OVI Market Commentary

OVI Market Round Up 

This is another email with lots of charts, which I hope will be helpful.   

We’re pretty much past what has been a very positive earnings season. Now we need to see how the market responds to a news vacuum.  

First, the indices.  Starting with the SPY (S&P ETF), it’s simply grinding upwards with an OVI that is mainly positive.  Certainly not the best OVI you’ll see in this email, but it is correlating with the steady uptrend of the S&P … for now.  

spy 2013.02.11.jpg

The DIA (DOW ETF) has a bumpier but more positive OVI.  The index itself is now consolidating, but with a fraction more volatility than its last consolidation in early January.    

dia 2013.02.11.jpg

One stock I’d like to mention on its own is VZ.  The price is forming a triple top, cup and handle, a very constructive OVI.  The company has been upgraded, the green volume bars are consistently bigger than the red volume bars.  A break above $45+ would be very constructive for this wireless stock.  

vz 2013.02.11.jpg

The banking stocks continue you to be bullish.  Starting with GS.  As I said last time, a consistently positive OVI and then it’s a matter of picking a breakout.  

gs 2013.02.11.jpg

MS is consolidating right now and needs to break out from its recent highs.  

ms 2013.02.11.jpg

Same again for JPM.  As I said last time, you simply have to pick your moment by way of an easy-to-see consolidation pattern.  

jpm 2013.02.11.jpg

BAC seems to be getting over its jitters and is forming a shallow cup and handle, combined with a positive OVI for the last few days.  If the financial sector continues to rise, BAC looks like it’ll be part of it.  

bac 2013.02.11.jpg

Now just going through stocks in alpabetical order.  

BBY looks like a potential cup and handle, but notice that the positive OVI is forming its own head and shoulders!  Don’t read too much into it – I’ve seen this happen before and the stock has gone either way – but it just caught my eye as the cup and handle price pattern seems to be drifting a bit.  

bby 2013.02.11.jpg

I was liking BIDU as it was forming a lengthy handle on a multi-month cup, right before earnings.  But it gapped down at earnings and so that opportunity becomes a dud.  Remember, we do NOT trade a new opportunity immediately before earnings.  If you do, you risk what has just happened to BIDU and that wouldn’t be fun at all.  

bidu 2013.02.11.jpg

CHK is an oil stock forming a cup and handle with positive OVI after a gap-up due to earnings.  Needs to get past its recent highs.  
chk 2013.02.11.jpg

CVX is also forming a cup and handle, has a good consistent positive OVI.  

cvx 2013.02.11.jpg

Just breaking the alphabetical chain for another oil stock, SLB is a bit choppier and has had a false breakout last Tuesday, but is nevertheless also forming a multi-month cup and handle.  

slb 2013.02.11.jpg

EBAY is a class company with good earnings and often in the CAN SLIM LITE filter, but slightly messy to trade right now.  OVI is consistently positive albeit not spectacular.  

ebay 2013.02.11.jpg

F has a fantastically positive OVI and is finding its feet again after downgrades.  Stabilizing at $13, the question is whether this is a bear flag.  Avoid for now.  

f 2013.02.11.jpg

FB is also forming a bear flag coming off a recent double top and has the beginnings of a negative OVI.  A break below $28 could confirm that.  

fb 2013.02.11.jpg

GLD is coiling … just a question which way it explodes.  If the market’s bull run comes to a halt, then this should pop to the upside.  No clues from the OVI on this one this time, yet.  

gld 2013.02.11.jpg

GOOG has just broken out again and reaching for new recent highs with a positive OVI.  You need to wait for a new consolidation.  
goog 2013.02.11.jpg

MCD is on a good run, and see how the OVI has correlated sice December.  Consolidating now, hopefully this has the legs to reach new highs and hit $100. 

mcd 2013.02.11.jpg

PSX has been fantastic since the demerger from COP, at which time we swapped horses in terms of our OVI Express40 stocks.  Look at the mini cup and handle from January and it’s broken out again just last week. OVI consisently positive, so wait for the next consolidation.  

psx 2013.02.11.jpg

Recognising the chart patterns is an essential skill, but alone it doesn’t make a great trader.  You have to have the trader mindset to get in and out of positions as prices bob and weave around.  In our case you also have to stick to the most obvious opportunities.  

In the next few months we are working on our new concept of “OVI Studies” where we rigorously review the best filtering combinations, the statistics that arise from them, and the best way to trade them.  This is an exciting time.  You’ve probably seen for yourelf how consistent you can become when you stick to my favoured OVI behaviour of been solidly positive with bullish stocks and solidly negative with bearish stocks.  Now we’re looking to formalize these observations.  

Of course, the trading plan is all important.  If you don’t know the rules, then watch the videos in the OVI Traders Club which detail our trading plan, how we enter, stop and take profits.  It’s key to your success.  

All the best

Guy  

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