Wanted: VOLUME

Monday, July 24, 2006 | 05:37 PM

As mentioned last week, the window is open for a confirmation day:

"Historically, that would be evidenced by a significant follow-through rally four to nine days after the first big move up after a longer downturn. Requirements include the major indices rallying 1% to 2%, and on greater-than-average volume, in that five-day window. It opens next Monday."

Lets have a look at today's action, with the Dow up 182, the Nasdaq up over 41 points (2%) on 3 to 1 volume and the S&P500 gaining almost 21.

Although the buyers showed up today, they unfortunately forgot to buy in size. The NYSE ran 1.58B shares, while the Nasdaq had 1.49B shares  Based on the weak volume, today does not count as a William O'Neil's confirmation day.

That doesn't mean that markets cannot build on this move, but so far, the burden of proof remains on buyers to prove this move up is the real deal.

They have not done that yet.


UPDATE:  July 25, 2006 6:54am

This update combines the ideas from a few recent posts:  On the one hand, we are still in the window ofr a confirmation day. On the other hand, the technicals are unimpressive  and my working assumption is there are more lows before the next rally.

This is still a Missouri market ("Show Me"), and its guity until proven otherwise.

Hence, our strong opinions, weakly held.

Monday, July 24, 2006 | 05:37 PM | Permalink | Comments (17) | TrackBack (0)
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Low volume but a pretty broad based rally from what I can see. Looks like the U.S. 'Miracle Market" is still intact...although I have some serious doubts about whether it will take out the May highs for this year. I think one real key for the Market will be the expectations of what the Bernanke Fed will do with interest rates going forward. After listening to him speak on several occasions I don't have a lot of faith in Bernanke as being 'Hawkish' enough on Inflation.

Posted by: john | Jul 24, 2006 6:14:06 PM

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