Volume Drying Up In US Stock Market

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Volume Drying Up In US Stock Market

By David Spurr on January 7, 2009 | More Posts By David Spurr | Author's Website

As the S&P 500 index (^GSPC) moved from 750 to 950 area, you can see that total volume has been drying up. The markets will need more volume to drive indices higher. If there are a lack of buyers on the upside, then this rally is DOA.

My sense is that if the markets reverse and we have a couple of big down days, then the sellers will be out in force again. There’s currently a lot of HOPE in this market. Hope that we’ll get back to 1200 or 1100. If that HOPE fails to materialize, then the hope will turn to panic and fear and the sellers will be faced with getting out at 900 or hoping that it doesn’t go to 600. I think smart money will sell.

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