Online Stock Trading | Day 5 rally party only one thing missing, volume

Day 5 rally party only one thing missing, volume


Filed Under Market Commentary |

  • Markets soared on an oversold bounce from the prior week. Russell 2k rocketed 2.8%, IBD 100 finished up more than 3% on the day. Nasdaq wasn’t too far behind, up 2.1%. Volume lagged across the board, we like to see on a day like this volume to surge. A warning sign, I am seeing railroad track type action in stocks and down here at the bottom it doesn’t look good. Downside volume is dominating any upside volume, very troubling.
  • In tomorrow’s market pulse in IBD, only 3 stocks made it as market leaders on big volume. This is a terrible warning sign as well. On days like these, you would like to see 10 or more stocks on this list.
  • Downside is still the path of least resistance. I do not see this changing in the near future. AAIIBEAR index indicated heavey bearishiness last week, today was only a bear market rally (I use the term Bear Market loosely as I don’t think we’ll hit the 20% mark). The path of least resistance will remain down until we find our next big down day on considerably lower volume the day before. At that time, path of least resistance will be flat.
  • Cash is our best friend at the moment, keep it that way.

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