News of a Greece bailout helped stocks early on as the market gapped higher at the open. Volume was the big story of the day, behind the wonderful price advance on the day. Institutions were not out in full force putting cash to work as the first month hits. Price action was strong with steady action throughout the day was nice to see. Leadership joined the party even with a few showing volume support. Overall, not a bad start to the week, but without the conviction from the institutional players this isn’t something to get terribly excited about, yet.
We could be very well in the midst of a thinning market leadership as this uptrend moves along. There were a few leaders that were near 50 day support saw a bounce with volume. Others bounced without volume, but at this point nothing really jumps out screaming we are going to go higher. If anything, further sideways action would go a long way for us to continue this uptrend.
What is interesting is the need to call a market top and say a correction is coming. I for one, on Tuesday saw a change in the market like January twenty-first. But, this time we did not see the market continue to the downside like last time. Perhaps this is a sign there is underlying support heading into May. The key is to stick with the leaders and try not to over trade. Over trading will only lead you to churn your account and will destroy your confidence to trade.
The lack of upside volume is somewhat concerning as it is a measure of institutional support. This market has seen a delay in volume where it does come in either a day or two later. We’ll see if the volume comes in on the upside or downside, but regardless pay attention to how your stocks are acting rather than use the market as a guide to dump a stock. Use your stocks to determine if it signals any sell signals, laggards should always be cut and let your winners run.
Stay disciplined in this market as it can be tempting to hop in and out of the market with the wild swings. Cut your losses and stay patient.
