Volume ends mixed, but price action is strong
For the second day in a row stocks jump, but today’s session came with a big jump in volume. A positive ISM Manufacturing figure helped push stocks higher. Even with a big jump in ISM Prices Paid index the market was able to push higher. Volume continued to push higher throughout the day, but NYSE volume dipped at the close while NASDAQ volume ended up 19%. The price jump in the NASDAQ coupled with the volume would classify today as a follow-through day. Today was a step in the right direction, but we’ll need to see this market avoid any further distribution to avoid a major break of this market.
The past three weeks we have seen our fair share of ups and downs with this market. For now, the last three weeks appear to be churning on weekly charts. Even with the S&P 500 at new highs it came on lighter volume than yesterday’s level. While this isn’t a major red flag, it is something to keep on your radar as we continue to push forward. On the other hand the NASDAQ sits just under its new high area, but unlike the S&P 500 the NASDAQ saw its volume swell. Over the next few trading sessions we’ll need to see the NASDAQ build upon today’s action.
Another big story of the day going unnoticed was the move in the US Dollar index. The index continues to succumb to selling pressure as investors escape the dollar. As the Federal Reserve continues to push its Permanent Open Market Operations (POMO) the dollar continues its devaluation. It is quite simple, as supply increases the less value the “unit” is worth. In this case, as the Federal Reserve artificially creates dollars out of thin air the dollar loses its value. It appears the dollar index is looking for new lows below 75.00. The decline in the dollar certainly helps out the stock market.
With plenty of selling over the past few weeks it is important we build upon today’s positive action. Keep your eye on your stocks and pay attention their price and volume action. CNBC will most certainly pound on the Crisis in Egypt, but we’ll keep focused on the price and volume action.
Here is the best out of all the stock market tips…Keep those loses short!
