No real surprises with today’s action given that the OVI has been more negative in recent weeks. My forecast throughout the summer and autumn for increasing volatility looks sound.
SPY
Down through support now … will continue to be volatile for some time. I said a while back that within a year I fully expected the S&P to drop below 1000. I think there’s every reason to believe that by mid 2012 that will have happened.
GS also inched down today but finished nearer its high of the day, so it may just stem the down tide for now. Other stocks falling with negative OVIs included AMZN and AAPL, both of which have fallen through support levels recently. There are more, as you’ll see inside the Private Traders Club in the OVI Charts section.
In terms of how to trade this market just stick to the very obvious opportunities where the OVI is supporting the direction of your breakout trade. Also, take your first profits early according to the basis premises of our trading plan. It’s better to take a nibble of profit and ringfence your trade than hold out and then make a pig’s ear of it.