Wednesday, July 13, 2011
What a Reversal!
This is something you do not see often, especially 2 days in a row. We've got back to back nasty reversals, with hopes being pumped both times by Banana Ben and the QE3 bazooka. The market refuses to give a lasting rally here, and traders have been quick to sell any pumps. The volume analysis I've been doing confirms that this is no ordinary selloff, you are getting more volume on pops than drops. Contrary to paper napkin volume analysis, that is bearish, not bullish.
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4 comments:
Thanks for great analysis. However, please explain further -- why is it bearish if volume on the pops is higher and but less on drops? Wouldn't it be the other way around, showing there are more buyers waiting to take it higher?
We are in a volatile consolidation. That's all.
Throughout this rally from 2009, all the rallies have been on much less volume than the selloffs.
It is bearish to have a lot of volume on rallies because it tells you that a lot of buying is needed to move the market higher. In other words, there are a lot of sellers waiting to sell at higher prices.
The market refuses to give a lasting rally here, and traders have been quick to sell any pumps.
I certainly am.
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