The recent volatility has brought the major indices In Play, this broad market movement tends to have the “lift all boats (stocks)” effect, making the ETF’s like $SPY $IWM $TNA $TZA great trading vehicles.

However they aren’t always going to be the best option at every point in the day, especially since the market has started to base (albeit a 500 point base). When the indices are less In Play, they can be much more difficult to read and trade off of momentum, yesterday was a great example of that. The $SPY had a very strong day; however it was much more of a grind, thus making it harder to trade the “ticks”. Notice how the IPR (In Play Ranking) was 2.1 for $SPY and even less for $DIA and $IWM. While these readings aren’t extremely low, they have definitely come off since the last few trading days.

While the broad market is extremely important to be watching, a lot of individual names are starting to find their own. Yesterday we saw $SODA on the top of the Weak Today and In Play columns (on earnings), $AOL on top In Play, along with a number of others that traded on their own or with limited correlation to the market.

With the VIX still hovering around 40, the broad indices and ETF’s are offering great opportunity even for those who usually stick to the individual names. But like any other trade, you need to know when to ease off and wait for the proper time to floor it (we’re looking for an IPR above 3.00, complemented with a good technical set up / levels).

@tarhini_smb