It’s pretty easy to sum up today’s action in the major indices — it was a good day pricewise but the volume was weak. The volume was especially low on the Nasdaq, which just happened to close a hair under its 200-day moving average (imagine that!). I doubt that the Nasdaq can just drift like this through the 2000 level but I guess stranger things have happened. It’ll be interesting to see if the bears come out swinging once we tag 2000.
Somehow this just seems too easy to call. Perhaps we have a bear trap being set up…
Mike,
Thanks again from all of us (even those not writing) for your insight and sharing of knowledge. Lord knows we all need it! You are clear on your volume comments; can you explain whether the other graphs on your page are useful for an interpretation of where we are: “STO” and “OVB”?
Thanks, a Fan!
Douglas
You’re welcome Douglas. Earlier this month I mentioned that On Balance Volume (OBV) was showing a positive divergence. It’s viewed as a leading indicator show it should lead price. It looks like price has pretty much caught up with OBV but OBV still looks good (it’s trending higher).
Stochastic is turning back towards overbought. That tells me that the sellers are losing their power since they couldn’t put that indicator down towards oversold levels.