Low Volume Rally as NASDAQ Retakes a Key Moving Average

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I am not impressed with the most recent attempted by the NASDAQ to regain its 200dma. The low volume retake of this key moving average is leaving me with a sour taste in my mouth. With hefty price gains and so little volume it can only mean disaster for the index. Although the NASDAQ itself does not have any recent days of distribution the NYSE indexes have 3. We aren’t at the sound the alarm levels but distribution days can add up and fast. New Highs continue to lag behind New Lows, not something new but it is something to look out for because in a new bull market New Highs should be stomping New Lows. This market is teetering on the edge and looks like it wants to roll over.

I am seeing too many traders feeling like they are going to “miss out” on gains. This is a terrible mindset and it also is signaling to me this rally will have a short lifespan. The current Follow-Through Day has so many flaws that it will ultimately not lead us to the next bull market. We need more stocks showing strong price action and we simply have very few. The new bull market could be months but most likely years away and it is best you follow the # rule of trading: Do No Harm! Cut your losses silly.

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