Tuesday, September 14, 2010

Increase in Volume

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As I mentioned two days ago "sharp drop in volatility (also known as "the Squeeze") could be nicely seen on Bollinger bandwidth on hourly chart. Such Squeezes to the volatility lowest levels are usually noted before strong and sharp moves." - we had yesterday strong and sharp up move.

Another point that is worth mentioning is an increase in daily trading volume (nicely seen in the Nasdaq 100 sector) over the last three trading session. While technical analysis continue to remain bullish it could be "too close" to the "to late" to open a long position. At the same time it would be too early to play short.

DJI, S&P 500 and Nasdaq indexes have hit their resistance levels seen in the middle of June and at the beginning of August 2010. The indexes bounced twice from the levels they are right now and there is a possibility we may see the third break down. Still, it could be nice to see a couple of sessions of side-way trading prior to that.

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