Online Stock Trading | Stocks Bounce From Intra-Day Lows on Higher Volume but Still Below Average

Stocks Bounce From Intra-Day Lows on Higher Volume but Still Below Average


Filed Under Market Commentary |

Stocks opened positive on Wednesday as crude oil prices remained lower.  However, since the market has a laser focus on the Crude Oil market as Crude traded higher the market went lower.  The disconnect between the two markets didn’t occur until Crude’s open-cry session was complete at 2:30pmEST.  Stocks began to work towards the upside and closed near its highs of the day.  Quite a bit of support from traders, but volume continued to remain below average.  Again, the big institutional players did not step into the market giving this rally little support.

Never short a dull tape!  I understand many are trying to catch turns but the real big money is made by staying patient and cutting your losses.  Even if you are a day trader letting losses get out of hand will only severely handicap your success.

I would be keeping a healthy level of cash on hand not only to put to work but also to protect you to the downside.  Low volume markets can get whipsawed around.  As evidence last week they can get hit pretty hard too.  Its best to be nimble and adjust as the market moves.

Short interest on the NYSE continues to hit all-time highs as it stans now would take 14 days to unwind all short positions on average volume.  This is simply amazing because this stat measures actual activity and does not record market participants’ “OPINIONS!!!”  Right now, we are seeing a first in the markets regarding short interest levels.  The amount of shorts continue to have me lean towards the bullish side of the camp.  I can see a massive short squeeze occur on the NYSE if oil decides to breakdown.  However, it may take some before we see this occur.  As the summer months approach we have hurricane season that will affect how energy prices trade over the summer.  Do we see $200 a barrel oil?

At this very moment we do not have the answers, but we are armed with price and volume action.  Right now, we are bouncing off oversold conditions and volume has increased as we’ve moved higher.  Keep new positions smaller and be quick to take profits but make sure you leave a sizeable position to catch a move of a Monster Stock!

Market Speculator

Last 5 posts in Market Commentary

Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Netvouz
  • DZone
  • ThisNext
  • MisterWong
  • Wists
  • Bumpzee
  • StumbleUpon

Comments

One Response to “Stocks Bounce From Intra-Day Lows on Higher Volume but Still Below Average”

  1. Stocks Bounce From Intra-Day Lows on Higher Volume but Still Below Average | Investors Paradise on May 29th, 2008 12:08 pm

    […] Stocks opened positive on Wednesday as crude oil prices remained lower.  However, since the market has a laser focus on the Crude Oil market as Crude traded higher the market went lower.  The disconnect between the two markets didn’t occur until Crude’s open-cry session was complete at 2:30pmEST.  Stocks began to work towards the upside and closed near its highs of the day.  Quite a bit of support from traders, but volume continued to remain below average.  Again, the big institutional … [visit site to read more] […]

Leave a Reply