Online Stock Trading | Volume slides significantly, NASDAQ down slightly as the Dow leads stocks down

Volume slides significantly, NASDAQ down slightly as the Dow leads stocks down


Filed Under Market Commentary |

Relatively boring day in the market today. Price action was a bit unchanged until the day started to wane. Volume was down across the board showing traders were a bit anxious for the pending economic data coming later this week.

What is more interesting is the Shanghai Index moving to ANOTHER all time high but on lighter volume than its last distribution day. We must also note that the last distribution day was the largest volume day on the exchange!

Shanghai 4/23/07

As you can see, we are nearing a top and the carpet will be ripped from underneath traders. I would be looking to add to a short position in CAF. That exhaustion gap is telling that demand is waning a bit and will have a hard time reaching new highs!

Why am I harping on Shanghai? China is seen as the next “Michael Jordan” of economies. At this point, most investors there see this market as not being able to do anything wrong. This is “GREED” at work. Pure greed! Last quarter growth of China was 11%, although some have pointed to slower growth ahead but not a collapse. If the China market crashes like it did in Feb. it will send ripple effects throughout each and every single stock market. We saw an extreme change of trend on 2/27.

Shanghai is itching for a collapse on scale larger than our crash in ‘00-’02. What it’ll do is send FEAR throughout every stock market…and our old saying “Sell in May and go away” will hold true.

Our markets right now are more concerned with Earnings and Economic numbers. If all stays quiet in China over night we’ll be focused on the release of home data.

EDU continues to play horribly in the sand box. However, today’s action wasn’t on terribly large volume which leads me to believe we can still go higher. I would just be real careful with this one, make sure the reigns are tight.

Aloha and happy trading!
MS

marketspeculator@gmail.com

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