Thursday, January 21, 2010

Volume, Volatility and Advance Decline

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I usually do not make posts during the week. However, I could be nice to say a few words. I think may traders are wondering if they should panic. I would like to drag your attention to several factors:

1. Today's daily volume very high and may push tomorrow indexes up. If this does not happened tomorrow and we will have flat trading or just shallow advance then I think we may see further slide.

2. Volatility is going up - this is a bearish sign. If we see tomorrow strong up move as reaction on today's bearish volume it only will add to the volatility and the next move down could be even stronger than we had over the last two days.

3. Even we saw today big selling volume, the advance decline data on the S&P 500 were not extremely Bearish (extremely low), which would mean it is not a panic selling yet and there is still a room to go down.

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