The only part missing from the market making new highs is the fact that we don’t seem to have real volume behind the volume. If you look at the SPY over the course of the last few months, you can see that the markets have gone down on higher volume (a usual sign of distribution) vs. day that the markets are up (for instance the SPY traded 142mm shares, vs. the avg volume in the last few months of almost 200mm shares). Granted the fact that only the Dow Jones has made a 52 week high today may be the reason for the lower volume in the SPY and NASDAQ; tomorrow we need to see all three markets take out the 52 week highs, ideally on higher volume, other wise we may start to see the classic set up for a sell divergence in the markets.


SPY daily 11.09.09


The one sector that lead the way higher in September, the financials, they need to start performing better for this rally to stick. Earning seasons is coming to an end, so plenty of number crunching has taken place with the analysts; the only sector left to report is the retail sector. For the most part analysts have not lowered their expectations going forward… so the only variable still missing from this rally is the volume… I’ll be looking for that tomorrow and the rest of the week.

Tagged: charts, day trading, equities, equity, intra day trading, spy, volume