Online Stock Trading | Stocks Extend Monday’s Gains, Volume Higher but not Imressive

Stocks Extend Monday’s Gains, Volume Higher but not Imressive


Filed Under Market Commentary |

Two pieces of negative news:  UBS $19 Billion dollar write-down and the hot reading from the ISM Prices Paid index should have crushed the market’s confidence.  However, the opposite occurred.  Traders seemingly took it as good news as ISM Manufacturing contracted, but not as much as expected.  In the end, the Dow was a few points short of another 400 point rally and volume picked up from the prior day.  Although volume picked up, it was still below average volume signaling institutional support for this rally isn’t there yet.

I quickly cut out my two small short plays:  TWM and EEV yesterday.  This market has legs, now whether or not it has strong or weak legs that remains to be seen.  We need the market to continue to build on the past two days worth of gains and have volume behind it.  Volume must grow with the upside.  At least two more days of gains with higher and higher volume, preferably above the 50dma would increase my confidence in this rally.

I need my accumulation!  Keep Cash heavy and wait for high volume breakouts from sound chart patterns!

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