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August 22, 2016 | How to Spot an Oversold Stock Market

Chris Vermeulen

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and author of the book: 7 Steps to Win With Logic

VES is a special indicator I have been developing to help identify intraday oversold levels and overbought levels. The level which big money steps back into, or out of the market when these extreme levels are reached.

Notice in the chart below the lime green areas which price reversed from for quick and steady returns.

Intraday-bottoms-recent

 

Last Week’s VES Extreme Levels Signaled Including Overbought

Here you will see the both extreme overbought and oversold levels on the chart. I didn’t highlight it on the chart but take a look at Aug 11th. You will notice the red NYSE indicator at the top moved above the blue threshold line indicating everyone was buying. This happened again on the 15th. The general rule is, when everyone is doing the same thing, you best take the other side of the trade.

VES-1

 

 

Monday, Aug 22nd – This Weeks VES Signal

What you want to look at on this chart is Monday, Aug 22nd. This is something I can see unfolding before it happens based on other market characteristics and I notified subscribers of my ETF trading newsletter about this during pre-market trading and for them to expect an extreme pivot low today in the morning.

VES-Reversal

 

Concluding Thoughts:

In short, these trade may look little at first glance only being a fraction of a percent move each signal. But keep in mind, the shorter the time frame you trade, and the more accurate a trade setup is, the more capital you can put at risk.

My focus on these trade setups are 3x ETFs or better yet ES mini futures contracts. With one futures contract these 5 – 20 point moves allow you to pocket $250 – $1000 within a few hours in most cases.

Trade with me at: www.TheGoldAndOilGuy.com

Chris Vermeulen

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August 22nd, 2016

Posted In: Gold and Oil Guy

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