Much of the talk these days has been about the incredibly low volume across the board. Well, “incredible” isn’t the right word at all – this is a perennially quiet time of year in the market. But what was kind of interesting was today’s meaty rally on such low volume: except for the Nasdaq, the major indexes were up more than 1.5%. So we wondered: Historically, would there be any edge in shorting large rallies that occur on very low volume? We…
Monday, August 25, 2008
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We saw the $TRIN (Arms Index) spike up above 2.20 today, and were wondering about the predictive value of a very high $TRIN reading over the very short term. Just to review, this is the Advance/Decline ratio divided by the Up Vol/Down Vol ratio on the NYSE. The idea is that you can check whether the volume under the hood matches the headline ratio of stocks advancing to those declining. When the relationship between volume and price action gets stretched,…
Tuesday, July 22, 2008
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The short-term bottom that formed on July 17 and the rally the following day were marked by incredible volume and by a convincing breadth reversal. Since then, volume has trailed off quite a bit (as you would expect). More importantly, even though the indexes have rallied up this morning off of their premarket lows, breadth has turned quiet negative, and the $TRIN, $TICK, and put/call readings are all flat-to-uninspiring. We suppose the key question here is whether the markets will work…
Tuesday, April 1, 2008
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In a viable, vibrant bull market working alongside a healthy economy, are 400 point rallies like this one really needed? Volume today? Shrug. Nothing to write home about. Volume in IWM and QQQQ was particularly average; the biggest volume was in the Dow, which, as you may recall, is still composed of just 30 stocks. The biggest Dow gainers today, unsurprisingly, were AIG (+8%) AXP (+7%) C (+11%) and JPM (+9%). As nice as this rally was, only QQQQ is above…
Friday, August 29, 2008
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