Stocks Finish On The Highs Of The Day But Volume Is Lacking

There are two aspects of the market that I pay very close attention to:  Price and Volume.  Both tell a story and both are very important to this speculator.  Today’s market certainly saw a bullish move, finishing off the day on its highs.  However, a sign of misfortune for the market was the inability for institutional players to step up and support the move.  Volume finished lower by 30% or more across the board suggesting the buying was anemic.  This market is far from being the type of market I want to be in.  For the trader that needs repeatable action, this market is for you.  However,  the more patient trader (non-day trader) I am going to wait until the market provides a better opportunity to buy stocks.

The reason I do not day trade is because I am not personally built to trade the way a day trader operates.  I for one, do not need “action” every second of the day.  Understanding the way you operate is the number key to operate successfully in the market.  AAII proved that the CANSLIM method was highly effective and Gil Morales showed the method to be powerful after racking more than 10,000% returns from 1998-2005.  Many are out there trying to find the bottom here and the most successful strategies show that picking bottoms is not important.

The collapse of the VIX (^VIX) and Put/Call ratio today shows that there is relatively no fear in the market.  Preliminary data shows there were only 8 New Highs while there was 113 New Lows notched today.  This isn’t the type of readings you would want to see beginning a new bull market.  Even with the Follow-Through Day this market is very weak and is being avoided on my side as I sit and wait for the right opportunity to get long.

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