 Over to our man Mr. Basil Chapman as we do each and every Tuesday at 20 past the hour and don't forget folks Basil does an outstanding show here every trading day 10 to 11 Eastern standard time also has a great newsletter Master op the opening call now It's very easy to get the opening call folks come over to our website at TFN Going to newsletters see the opening call right on the left-hand side. You just hit that subscribe button You can get one month for a hundred and forty nine dollars Six months for 695 which is the savings of 22% or 199 dollars and you get it for one full year for 1195 Which is a savings of 593 dollars or 33 percent now They all come with a 30-day money-back guarantee Once you get Basil's newsletter He has about 10 to 12 archives out there really gets you to understand how he looks at the market and how you ride that wave Basil Chapman, what's going on? Hi Tom. Well, what's going on is what's going up? It's the first time in a few weeks that I've spoken to you in this interview and said market is higher Yes, the couple of things that we were looking for and what I was discussing all of last week and certainly the subscribers to my opening call is that The intensity of the sell-off in the Dow and the S&P and the QQQ and the IWM the main main Indus indices My on balance volume that is It's an old Joe Granville Yeah, a very interesting man anyway, he developed the system way back I think was a 50s and 60s where you just it's a running total of volume And if the bar that you're looking at closes up You just merely added to the running total and it closes down your subtract All right It used to be so cumbersome because you'd have a calculator and you have to type in there with 33 million 400 whatever it is plus today now, of course, you've just got a blue line and this one and it's blue for me But it's a straight line And what I was saying is that I I don't use the MACD or the stochastic for oversold readings Okay, but I do use the on balance It's the one indicator the technical tool that I use and I said it is really close to a rally and if Three things occur one is if the volatility index That's the VIX index Stars to and I showed this actually all of last week before a couple of weeks. I've been showing I use a certain I use trend lines And if the trend lines can make a little channel I use that as what I call a chat wave Inside track repellent or propellent line here at the bottom. You can see this is the weekly chart of the VIX It was a propellent line And it was so interesting that the high that was made back in January that was with the Fed with Russia Ukraine with everything happening oil the works The the volatility index went up to 30 38.94. That was in January The week of the 28th and then to pull back very sharply to the 20s and then it spiked back in February And then it kept making and I always talk about these things. I've discussed this so many times I don't know the mathematical rule But if you look at this chart Look out this trend line Reverse the price of the volatility each time. How does the chart know to make that much of a difference? I know outside to draw an actual perfect trend line to the exact tops or the exact bottoms I I I've got a measurement and this is it's an emotional measurement And that is measured by the sentiment so that if it's a rising tide you'll get higher prices And if it's a lowering tide you get lower prices and the same amount of emotion Stops the price. That's the only way but that's not a mathy. That's just that's an Imperic way of looking at it So but isn't it fascinating? Look what happened last Friday? We were going above the The trend line Thursday and Friday and then it stored to 34.88. That was the week of the 30th of September It closed with a long-legged doji Right in the middle of this tiny little mini channel And look what's happened this week. So I said to my subscribers that we got to be ready for some cause because if the volatility index pulls back if the bonds can just Have a little bit of a rally so that yields can come down And if the overbought level that i'm looking at the oversold level in the on balance volume works We could have a really sharp Rowdy, so we were very fortunate yesterday We just got got there in time to buy the diamonds yet again Because we've tried a few times I had a real tight 1% loss, but we got it almost at the low of about 29 1,300 and the load was actually 28,715 So, uh, we're right here 30,172 But you were talking about this a little while ago You were saying what happens next is really important because it's going to give us a lot of clues So I agree with you because In this v-shaped type recovery and it's fabulous that in so we've taken out eight sessions on the left side In two days. That's really important number one number two is the low so far is september Even though the futures went to lower lows yesterday So it'll be really important if all of september We're able to not go below 28 7 28,715 or the low in in the s and p or the cues because that'll suggest That september which is usually if it's a bad month you usually follow through into october It means that maybe this time october is not so bad So I agree we've got to be looking at what happens next and I did have What I call the chapter we've chained gauge and gave a very low reading Uh today and that suggests immediately that the very following day the dow Should have a slight to negative before it tries to rally I personally would like that right because if you get that pullback and then it starts to rally It says that for for today and tomorrow Every pullback has been bought And that's going to be very important So the most important thing is by friday if we take out today's low on the dow which is 29,826 That's not going to be a good sign at all But if if we do get a pullback and if the futures are very high, maybe we won't get it tomorrow It's failed a couple of times this year not many but it's got a fabulous percentage Record this chapter we've chained gauge on the low when it's very low But if if it doesn't fail that's going to show that the The buying pressure is so intense, especially if it gaps up tomorrow That would give you the potential for a v-shaped pattern And then I've drawn in right here. This is the next level where the chamber wave I'll draw it and show you what I normally do I double it up and I make it very tiny This becomes red and it just gives you a very good sense of where the next chamber wave inside track Repel and zone is and it's right in here. And if we're going into the next few days, it's in the 30,700 That's another 500 points from you. That's that's that's you know, that that would be really impressive If we could even get there, but that's the level we're looking at But most importantly on the short term the mag D the moving average convergence divergence Is still negative even with this nice two-day balance So I want to see the mag D cross nicely positive That's this histogram school the zero percent line going to positive And that little green line will cross over the red And the stochastic is still down at 15 percent. That is not very good All balance volume has got the v-shaped recovery. The relative strength is actually quite nice So not everything is in sync. So it was a very emotional Buying pressure with shorts trying to cover maybe new buys coming in same thing today But it's really important. So the levels to watch if the dial can close in the next two days or three days above I call it 32,270 That would be really important. And if it starts to slide, you've got to hold the 30,000 support on the short term 2,000 points in two days, man. That's pretty good dazzle Yeah, it is You're a great one safe one. Look for the show tomorrow, man. Thank you. Thank you. Stay right there folks. Come right back