If you’ve been reading these blog comments over the past year, you’ll remember that we discuss trading volume and what it indicates for future market direction. Heavy volume trading in an advancing market is often stopped cold in its tracks with a heavy volume reversal. However, what we need to watch is how many of those days are strung together on both ends. Heavy volume selling days are considered distribution days, and if you string four together, historically, it has been a sign that the market may be turning the trend in the other direction.
We are watching today’s market closely. It is trading lower on high volume. If the market continues its weakness, we will look to see if it’s a trend in the days ahead and raise cash if it is. However, it’s not unusual for one-day reversals to be usurped by high ... |
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