Friday’s Stock Market Action: Weak Volume, Weak Rally

The volume on Friday was weak with 1.6bn shares traded. I went back and looked at the volume that was done back at the November lows (741.02-spx) on the 20th and 21st of November 2008. Price closed back above those prior lows.

I thought it would be interesting to look at how much volume we pushed, getting back inside the range and to compare that to the volume on the downside as we broke into the new lows. We came up about 700,000,000 shares short. We’re pushing into the lows with lower volume - usually considered a sign of a potential rally failure.

It is constructive that we got back within the range decisvely; however it was on lower volume. Ideally one would like to see price moving back into the range on higher volume. That would confirm the rally and suggest higher prices. The current volume configuration leaves it “unclear” at best.

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