Our money flow indicators have turned bullish; they all confirmed on Monday. Tuesday was very profitable as a result. Volatility is still elevated, so a larger range is anticipated,
Summary
Use these four indicators for signals and confirmation going into the holidays.
Fear and Volatility
Left (VIX:VXV Ratio) Right (Put/Call Ratio)
Institutions were busy buying the dip. Both value and growth stocks moved higher on Monday and Tuesday. In addition, the ARCA Instituional Index on the right shows the most commonly held stocks in their core portfolios.
Click to enlarge charts.
Growth and Value stocks rallied on Tuesday (left) while the ARCA Institutional Index (XII) on the right showed institutions were buying the dip. More than 70% of stocks were trading below the 50d moving average.
Click to enlarge charts.
These indicators will assist in providing necessary intelligence on institutional buying and selling. Trading without them is ill-advised.
Indicators are not a guarantee, rather a signal to confirm by observation.
Institutions are Buying
When the number of stocks trading above the 50d and 200d moving averages reach an extreme, like they did last week, its time to take notice.
Last week, 71% of stocks were below the 50d moving average. When the two indicators in the lower panels turn higher it is a buy signal. Confirm in the days that follow. When the indicators move lower or form a bearish divergence look for the markets to pull back. Confirm in the days that follow.
Join us today in the trading room for our LIVE broadcast during market hours, as we navigate the current environment and discuss the changes in the indicators that most affect your trading. Watch, listen, and trade from 9:20 AM to 4:15 PM Monday through Friday.
Happy Trading,
Vinny
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