The Morning Cup of Jo
Volume - What volume?
Following the reaction low set last Wednesday, the volume has been nothing short of anemic. The markets have put in two of the lowest volume days all year. Actually, another very important point is since the SPX broke its IT Trend, the NYSE has only had 4-days in which the volume has exceeded its 50-DMA and ALL of those have been distribution. Now the SPX is retesting the bottom side of the 50-DMA and the IT trend (Floors & Ceilings). Take a look.
The Nasdaq isn't giving such a pretty picture either. It's also retesting the bottom side of the 50-DMA and its ST Downtrend. Looking at the volume, since its break of the IT Trend, you'll notice 5-days in which the volume has exceeded the 50-DMA. All of those have been distribution as well.
So where does that leave us?
Yesterday, I swear I heard one of the teletubbies do an Internet poll asking people if they believe Wednesday of last week was the bottom of this correction. However, I didn't stay tuned to see the results - too bad. (Anything to sell advertisement.)
Last week I wrote a 'Jo' that talked about "The 4 B's and a D," when looking for a healthy bottom. Currently we have seen B1 & B2. (Break and Bounce) The present volume, on the upside, is giving reason to believe the probabilities favor, at minimum, a retest of last week's lows. Furthermore, there has been no evidence of momentum divergence.
However, the markets are at another key inflection point. If the probabilities are wrong and the markets do decide to breakout from here, the first key to a changing trend would be the Nasdaq breaking upwards of its ST downtrend and the 50-DMA. (2025)
I hope this helps!
Until next time...
The information on this website solely=
reflects the analysis of or opinion about the performance of securities an=
d financial markets by the writers whose articles appear on the site. The v=
iews expressed by the writers are not necessarily the views of Minyanville =
Media, Inc. or members of its management. Nothing contained on the website =
is intended to constitute a recommendation or advice addressed to an indivi=
dual investor or category of investors to purchase, sell or hold any securi=
ty, or to take any action with respect to the prospective movement of the s=
ecurities markets or to solicit the purchase or sale of any security. Any i=
nvestment decisions must be made by the reader either individually or in co=
nsultation with his or her investment professional. Minyanville writers and=
staff may trade or hold positions in securities that are discussed in arti=
cles appearing on the website. Writers of articles are required to disclose=
whether they have a position in any stock or fund discussed in an article,=
but are not permitted to disclose the size or direction of the position. N=
othing on this website is intended to solicit business of any kind for a wr=
iter's business or fund. Minyanville management and staff as well as co=
ntributing writers will not respond to emails or other communications reque=
sting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.= span>
Daily Recap Newsletter