Stocks Gain Support But Lack Significant Volume

Certainly this market can get much more boring, but it has become so mundane that it will force some hands to fold and walk away. Like a bandaid the quicker you peel it off the less pain you receive, but the longer you stretch out the peeling the more pain you feel. This market is slowly peeling back the bandaid and it isn’t bound to pick up any time soon. Low volume markets tend to be boring and it will force a few hands from the market but it won’t flush out all the weak ones. Volume on Tuesday was certainly higher than Monday but it was considerably lower than its 50dma. Regardless of what was in the FOMC minutes or the FDIC report this market has serious flaws and should not be a market that is trusted.

The number one thing here is to do no harm. Jesse Livermore through his trading mistakes found that it is ok to do NOTHING and sit on the sidelines. There is absolutely no need to trade at this moment in time. Breakouts are being sold and there are so few growth stocks it isn’t worth plunging into a trade. Many traders, even some “professionals” will overtrade this market and severely handicap themselves for the next bull market. One prime example is all those CNBC market pundits in 2003 telling you NOT TO BUY and if you followed that advice you missed out on significant gains! Even worse, since you overtraded ‘01-’02 you lost your stake and couldn’t capitalize on really nice gains.

Take a vacation, take the rest of the week off and enjoy the last few days of summer. You’ll come back refreshed and won’t feel the need to rush into this terrible market.

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